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Bob
Very interested to read your tome about today. It is my experience that if
First Friday produces a really decent move, then the following Monday often
starts (and sometimes goes on all day) in a tight range. But I wouldn't
predict it!
As you know Friday was a lovely mover - shooting straight up after the
Report and then coming off for the rest of the day, with nice measured,
bearish retracements. Today, opened with a gap that ought to be filled but
has yet to reach a resistance level upon which it might reverse, to do so!
On the other hand it doesn't seem to want to breach the pivot either, let
alone go down to the support - so unless you are a scalper in the pits, if
this goes on all day, the best we can hope is a decent Inside Day upon
which to capitalize tomorrow...
Anyway, I reckon you are a brave guy even to attempt to predict what the
day may be, coz all ye can do - in reality - is watch the market do wot it
do do.... i.e. exactly as you say in your last paragraph.
The bonds is an excellent market in which to read the tape, as it unfolds,
but like all markets, in my experience, a lousy one to try and predict.
Furthermore, once you have predicted something, then a part of your mind is
hoping to prove the prediction and that can upset, or at any rate bias,
your thinking.
The beauty of the T-Bonds is that you do not need to predict what it might
do, it will show you, with a measured tread, what it is going to do and
then, because it is so liquid you have the opportunity of taking the
position you want - having made allowance of the risk/reward ratio against
a sensible target, beforehand.
I think it is great that your computer reminds you to look for various
setups that you have programmed into it and I know that what you are trying
to do here is to help people see what might or might not be in store for
the day. As I have said, the danger of doing so is getting yourself
conditioned and this can sometimes make you want to react in a certain way,
which may be the wrong way.
All that can be said of the Today, so far, is that it is in a sideways
congestion and that there are, indeed, ways of determining what has to be
done IF... And that, basically, is a matter of price action at the
leading edge, rather than anything else. On a personal basis, I don't
want to know what anyone thinks the market is going to do - all I want to
know are the facts that surround the market and what has to be done when
the market reacts to them.
After that, everything else seems to be prediction. Having just come back
from a trip to the USA which included a visit to Vegas, I know I am not a
gambler... Still, my wife made a profit when she cashed in her bucket of
quarters on the one arm bandits, but I hope that is another story - and a
one off a that!!
Bill Eykyn
www.dbceuro.com/bille.htm
From: Bob Hunt <RHunt.066@xxxxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Monday, March 08, 1999 1:30 pm
Subject: T-Bond Day Trading for Monday, March 8
>T-BOND DAY TRADING FOR MONDAY, MARCH 8
>released 6:30AM CT, 3/8/99
>
>---------------------------------------------------
>
>Support, Resistance, and System Signals
>
> USM9
>R3 123 23/32
>R2 122 18/32
>R1 121 14/32
>DP 120 15/32
>S1 119 11/32
>S2 118 12/32
>S3 117 8/32
>
>MONITOR FOR HOLY GRAIL SETUPS! If the 5/15/30/60 or 120 min ADX>30
>then look to trade the bounce against that period's 20EMA with the
>last intraday swing pivot extreme as the target.
>
>Watch for OOPS! Trade - If O < YL then buy YL on a stop.
>-------------------------------------------------------------
>
>Commentary
>
>Well. . . THAT was interesting! We certainly got the volatility that
>was hinted might happen in last Friday’s commentary. Pretty
>breathtaking stuff!!! That’s why I recommend you stay away from that
>kind of market during the initial impulse phase. You just DON’T want
>to get caught up in the insanity. If you attempt to initiate or close
>a position under those kind of fast market conditions your fills are
>going to be absolutely terrible. And worse yet, due to order backups,
>you won’t know it for several agonizing minutes, which makes it even
>more difficult to devise appropriate exit strategies. It just isn’t
>worth the ulcers!
>
>Early on in the day, a potential double top formed at the highs, but,
>at that point, so soon after a large upward impulse move, I would have
>considered a trend to have been established, and any short position
>would have had to been considered as low potential. The "Street
>Smarts" Spike & Ledge pattern, mentioned last Friday, would have
>worked, but, again, the stop would have had to been placed further
>than I normally like. As price gradually drifted lower, it eventually
>came in contact with the 5 min. 20 EMA near a support line created by
>a 2/26 intraday pivot high, but there was no price reversal pattern or
>oscillator divergence to buy on, so that set-up should have been
>passed-up. There was a bit of a bounce off the 50% Fib retracement
>level near 120-19, but by this point, the market just seemed to lack
>any sort of bullish enthusiasm.
>
>All in all, market action after the initial thrust was just very, very
>sloppy. Which makes me believe that we might just have more of the
>same for today. We have absolutely no system setups for today, so we
>won’t get any clues for determining a bias from there. The one thing
>that we have going for us is the fact that our cycle indicators have
>registered a bottom. Both the 200 min. Double Stoch and 7 period %K
>(attached chart) have turned up from oversold zones, indicating a
>bullish stance is appropriate. But, I’m just not convinced yet. Not
>until price action can dance a fancier step for us!
>
>And that’s exactly what I’ll be looking for very early on. We have
>several layers of support directly underneath current price. There’s a
>late day intraday pivot low at 119-31, a 3/4 daily high at 119-27, and
>a 3/4 intraday pivot high directly under that at 119-25. This is a
>pretty good band of support. One might consider taking a long position
>on any sort of price reversal pattern or oscillator divergence off
>this zone, but you would have to be prepared for the possibility of
>price drifting as low as last Thursday’s low of 119-09. That’s a
>little too far for me to keep a comfortable stop.
>
>Our DP level for tomorrow is 120-15. The nature of tomorrow’s price
>action near that level will ultimately determine whether I can
>maintain a bullish bias or not. Because the market has been so sloppy,
>its probably going to take it a while to get its bearings. It will
>take some time for it to "change its dynamic structure in order to
>cope", as Tony Plummer would say. It might be best just to sit back
>and wait to see if the market can, indeed, get its bearings and forge
>onward and upward.
>
>Ideal scenario would be some choppy market action in the morning that
>eventually establishes some sort of base to work higher from. If the
>market can then muster enough energy to thrust through the DP, I can
>begin reestablishing my faith in a bullish bias. If the market then
>returns to the DP and gives us a price reversal pattern or oscillator
>divergence to buy on, I will thank the bond gods once again and get
>long.
>
>As I ready the commentary for its 6:30 CT release this morning, I
>notice that in the overnight market we have price dancing around the
>120-15 DP. We just might have cause to turn bullish very early on!
>
>As always, identify support and resistance zones and watch price
>action closely near those zones.
>
>Bob Hunt
>
>----------------------------------------------------
>By learning to make more distinctions, we increase the depth of our
>level of understanding of the cause-and-effect relationship between
>everything that exists. - Mark Douglas in The Disciplined Trader
>
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