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THE T-BOND DAY TRADING REPORT
Spotting Opportunity in the Treasury Bond Futures Market
Report for Thursday, March 18, released 6:30AM CT
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Support, Resistance, and System Signals
USM9
R3 123 19/32
R2 122 31/32
R1 122 11/32
DP 122
S1 121 12/32
S2 121 1/32
S3 120 13/32
Today is a 2 Day ROC SELL day - Look for intraday signals to go short
C<=20% OF TODAY'S RANGE
80-85% chance that today's low will be less than yesterday's.
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
The feedback that I've received from readers seems to be largely in
favor of more of the explanatory types of charts as used yesterday. I
plan on incorporating more of that type of analysis in the future.
Part of the difficulty in creating a report such as this is in gauging
the reader's interests and experience level. I encourage more feedback
of this kind. Tell me what you like and what you don't like and areas
in which you think I can better focus.
For yesterday's action (attached 5 min. chart), we had no System
Signals fired, so we were going into the day with essentially no bias.
Our cycle indicators are way overextended, so we knew that if there
were going to be any surprises, they'd probably be bearish in nature.
The market's initial move off R1 at 122-11 might have had us thinking
bearish thoughts, but there just wasn't enough evidence yet. The
strong, one bar downmove through yesterday's high, with no hesitation,
changed all that. Previous day high and lows are typically good
support and resistance levels. When you see the market move that
cleanly through one, it's usually a pretty good bet that more will
follow. A short position established somewhere near 122-14 would have
been likely. A stop two ticks above the pivot high would have been
appropriate, at 122-22, but this one should have been as a last
recourse protection. Any break back above yesterday's high would have
been reason to consider exiting. A first logical target was the DP,
but here again, there was no hesitation at that level, and it went
right through. The large range, two bar reversal that soon followed
would have been enough to shake you out. But the return to the DP
along with the containment action provided by the 5 min. and 15 min.
20EMAs would have been enough to get you short again with a target of
S1 at 121-24.
This was one of those day where the 3EMA-10EMA didn't come into play.
You can expect that to happen. The idea in trading is to bring the
tools of your arsenal together when they are needed. The more evidence
you have at any one point in time, the more confident you can feel
about your entries and exits. None of these tools are to be used in
mechanical fashion. It is up to YOU to weigh the evidence. In the end,
it all boils down to a judgment call, and it is strictly YOURS.
For today, we have two System Signals that are once again painting a
bearish picture. We have a 2 Day ROC Sell and C<=20% Of Today's Range,
indicating a very good chance that today's close will be less than
yesterday's.
Recent action relieved the overbought status of the Double Stoch
(second attached chart), but the 7 period %K looks like it has some
more downside left to it. The 5, 15, 30, and 60 minute 20EMAs are all
above current price. This is also bearish. Connor's volatility levels
are still extremely low, but ticked up slightly with yesterday's
activity.
We have several report releases for today. The most important occur at
7:30 CT and include CPI, Initial Claims, and Trade Balance. A few
minor ones occur at 9:00 CT. I would avoid establishing a position
until after the 7:30 releases. Overnight numbers as of 6:30 AM CT have
a high 121-30 and a low 121-21
I'll be entering the day today looking for some good shorting
opportunities. Ideal scenario would be a move up towards the DP at
122-00 where we also have a late day pivot from yesterday acting as
resistance as well as several 20EMAs. Watch action carefully around
these levels for any reversal cues. If, on the other hand, there is a
strong move through the DP, remember that price often returns to this
level before advancing. But don't assume anything. Let the market tell
you where it wants to go.
>From there on, its a matter of identifying support and resistance
levels and watching price action closely around those levels.
Bob Hunt
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Statement of disclaimer: This information was compiled from sources
believed to be reliable, but its accuracy cannot be guaranteed. There
is substantial risk of loss in futures trading. There is no warranty,
express or implied, in regards to the fitness of this information for
any particular purpose. Past performance is not a guarantee of future
results.
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