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THE T-BOND DAY TRADING REPORT
Spotting Opportunity in the Treasury Bond Futures Market
Report for Monday, March 15, released 6:30AM CT
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Support, Resistance, and System Signals
USM9
R3 122 4/32
R2 121 27/32
R1 121 19/32
DP 121 8/32
S1 121
S2 120 21/32
S3 120 13/32
TODAY IS AN NR4 DAY!
If during the day tomorrow YH of 121-17 is exceeded then either buy
the breakout (agr) or buy the retracement to the breakout (cons).
If during the day tomorrow YL of 120-30 is exceeded then either sell
the breakout (agr) or sell the retracement to the breakout (cons).
*** If no other direction is specified by other indicators favor ***
** that of the 100 min. 5 Double Stoch 2 period slope. **_UP/OBGHT_
Today is a 2 Day ROC SELL day - Look for intraday signals to go short
Today is an NR4 & 2 Day ROC SELL Day. DEFINITELY TRY TO GET SHORT!
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.
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Commentary
Friday's activity started off with an impressive bounce off the DP.
The bounce was not as clean a reversal pattern as I normally care to
see, but an aggressive trader would have had every reason to go long
at that point. A logical first level profit objective would have been
Wednesday's 121-11 high. But, the thrust move off the DP looked of the
impulse variety, which typically implies higher levels to come. So it
was not out of line to think that the market might reach Thursday's
high of 121-14. And, indeed, the market met that expectation and then
some.
The subsequent pullback towards the DP was held in check by the 5 min.
20EMA, but no oscillator divergence existed and a price reversal
pattern wasn't established on 5 min. charts until it was already on
its way towards the last pivot extreme. With that profit objective in
mind, and with no firm reason to expect that level to be exceeded,
there wasn't enough potential left to balance the existent risk.
The market spent the rest of the day drifting in listless fashion.
All in all, pretty uneventful stuff. That's about to change.
For today, we have a combination of System Signals and Cycle
Indicators that are painting a very bearish picture. And when you add
even lower Connor's volatility readings into the mix, we have the
makings of some very powerful forces at work.
For System Signals today, we have an NR4 and a 2 Day ROC Sell. The
NR4 is telling us that today is most likely going to be a trend day.
The 2 Day ROC Sell is telling us that today falls into the "sell day"
part of the swing trading pattern.
I've attached two charts today. The first is the 200 minute chart with
the Double Stoch and 7 period %K indicators. Both have become very
extended in their own overbought zones.
The second attached chart is a daily of the June contract with two
slightly different ways of measuring Connor's volatility. The colored
dashes on either side of the bars on the topmost part of the chart
identify either NR4 or NR7 days. Notice what consistently happens when
a Narrow Range day is combined with trigger levels on the volatility
indicators . . . I think we have some fireworks in store!
Needless to say, I'm going to enter the day with a bearish bias. For
starters, I will be watching price action very closely around the DP,
but the potential resistance levels all the way from the DP to the 3/5
high of 121-20 could become equally important. If we get a sharp move
above the DP, don't automatically assume that the market has taken on
a bullish trend. Sometimes, this is just the market's way of shaking
out the weak hands. However, mounting strength between the 121-20 and
122-00 levels will make me think bullish thoughts.
There are no reports of significance being released today. In
overnight activity we have a high of 121-18 and a low of 121-10 (as of
6:30 AM CT). It looks like the market is already testing the waters
between the DP and R1, so things could get interesting!
What I DO know for sure is that conditions are setting themselves up
for some extreme volatility, with the result being the start of a new
trend. These are the kinds of periods that every bond day trader
should be awaiting with great anticipation. After spending weeks on
trades with 5 to 15 tick profits, we are about to enter some activity
that has much greater potential.
But . . . and this is a big BUT . . . that volatility is a two-edged
sword. If you're going to trade during periods such as this, you CAN'T
fall asleep at the wheel. These are the times that discipline,
patience, and flexibility really count! And, as I've said before, and
you'll hear me say again and again . . . price behavior should be the
ultimate determining factor in All your trading decisions. If the
market tells me that it wants to be bullish. I will NOT argue with it.
I will change my allegiance immediately.
I know I just mentioned the following in the last commentary, but it
REALLY means something now:
Stay focused . . . make your trades when they set-up properly . . .
always use a stop . . . and enjoy the ride when the big one moves in
your favor.
And especially . . . stay focused!
Bob Hunt
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