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Just to have a few more gallons of gasoline ready to throw on any fire which
may occur, here's my weekly chart of the bonds. Should we take out the
119^09 low for week ending March 5 without first reaching the minimum .382
fib retracement at 123^17 we would have an inside week with no pivot high in
place indicating a continuation of the decline into the 114 area. Following
such a decline, we could then expect a rally and another decline with
minimum of nominal new lows. That would be the "normal" pattern, however a
panic in the stock market would negate normality.
Earl
-----Original Message-----
From: Bob Hunt <RHunt.066@xxxxxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Monday, March 15, 1999 7:06 AM
Subject: T-Bond Day Trading for Monday, March 15
>THE T-BOND DAY TRADING REPORT
>Spotting Opportunity in the Treasury Bond Futures Market
>Report for Monday, March 15, released 6:30AM CT
>
>-----------------------------------------------------------
>
>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.
>-----------------------------------------------------------
>
>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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