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The fact that we couldn't decisively move up through 118^03 (excepting a few
Fed announcement earlybirds) seems pretty serious. My long term historical
work points at 6.10% and your 8/points per 1% works out to about 116+. Using
a weekly chart, I'm assuming w4 was completed on 4/9 and we are now in w5.
If the decline holds above 116 (w3 * 62% around 116^10) then we could be
completing a corrective ABC which should mean a resumption of the bull
trend. Anything much lower and I have to think we are in the initial stages
of a bear market which probably means 5.5-5.7% will be at the bottom of the
rate range. What makes this dicey to figure is the nagging intermarket
relationship that such a large increase in rates should be bad for equities
and a tanking equities market should be great for bonds. Fortunately, we
only have to trade it one day at a time.
Earl
----- Original Message -----
From: swp
To:
Cc: RealTraders Discussion Group
Sent: Monday, May 17, 1999 12:24 PM
Subject: Re: June T-Bonds
> A move toward 118-03 should be possible, if we cannot, we've got big
> problems s-t. This, to me, is dead cat bounce. Open interest FELL in
> June bonds on Friday (though rose in 5s, 10s and big time in Sep, but
> o.i. there is tiny - spread trades??). There are few shorts to cover in
> bonds. Seasonals not too good for second half of May either, though
> excellent in early June. Targets in the 116/115 range make sense. Not
> sure if that will represent end of wave-3 or wave-5. Too soon to tell.
> Fed should tighten bias, but that is expected. If we sell off on that,
> and there is no hike (unlikely), that says this market is super weak.
>
> If this next drop is end of five waves, rally back to upper-120s is even
> possible. If it is end of three, then a four or five point pop is due
> and then drop to Earl's target areas below 112. Long term trend line
> near 115-12 I think, is support for this week. Momentum divergence on
> daily chart (RSI, 14-day) a concern for bears. Need sharp drop to avoid
> reassessing this as wave-5 and not wave-3.
>
> Steve Poser
> --
> Steven W. Poser, President
> Poser Global Market Strategies Inc.
> http://www.poserglobal.com
>
>
>
> Earl Adamy wrote:
> >
> > Here's a classic progressive bullish triangle and wedge. The horizontal
line
> > and first upward sloping trendline defined the initial bounds of the
bullish
> > triangle. Note the deep penetration of the up sloping trendline with
close
> > above the trendline - this is a signal to get long as stops just under
the
> > sloping line are cleared. Next we touched the horizontal line again and
came
> > back to a higher low below the first trendline - an initial sign of
weakness
> > and opportunity to tighten the stop. The second (lower) upward sloping
> > trendline defines a new triangle and the down sloping line across the
pivot
> > highs defines a wedge - note how the down sloping line provided steady
> > resistance. The general indication here is of a relatively weak market
which
> > has difficulty overcoming even light resistance (the down sloping line).
> > This is not to say that we will not eventually get a breakout but is a
sign
> > one should be monitoring stops carefully.
> >
> > Edwards & McGee notes that triangles which progress into the point are
very
> > prone to failure.
> >
> > Earl
> >
> > ----- Original Message -----
> > From: Earl Adamy
> > To: RealTraders Discussion Group
> > Sent: Monday, May 17, 1999 7:49 AM
> > Subject: Re: June T-Bonds
> >
> > > I have the 38% retracement of Friday's decline at 118^00 and the 100%
> > > projection using the L/H/L pivots on the 15 minute chart at 118^03. A
> > rally
> > > failure short of the 100% projection would be extremely negative,
> > signaling
> > > a high likelihood that Friday's low will not hold. Such a failure
would be
> > > confirmed by taking out the 117^07 pivot low. As a guess, I would
suspect
> > > that we need to rally to the 62% retracement area at 118^23 to have a
> > decent
> > > chance of holding Friday's low. Keep in mind that all of this is off
> > > Friday's action only while ignoring all which came before - an
extremely
> > > limited view.
> >
>
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> > Name: USJUNE.gif
> > USJUNE.gif Type: GIF Image (image/gif)
> > Encoding: base64
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