[RT] Boos and Spoos

["t-bondtrader" <t-bondtrader@xxxxxxxxxxxx>]

It is obvious from the RT traffic today that there 
is a certain consternation as to which way things are going to develop with the 
Spoo or the OEX and I have to say that I allowed myself the luxury of guessing 
that the Boos might just for once follow the Spoos and head south, with the 
break out of the bear flag.
 
Truth is, one just ought to stick to the "current 
facts" that the Spoos leads the Boos and that in doing so, they go in opposite 
or divergent ways.   Now the actual angle may be different, on 
different days, but it is quite definite that on a 5 minute chart, when the 
S&P is taking a dive, then the Bonds are in the ascendant.   They 
very often differ, as I have said, in their angles, but almost on a tick for 
tick basis they go opposite each other.
 
I have put the two charts opposite each other and 
you can see this very clearly.   The point is that it is the same 
virtually every day.   It is just difficult sometimes accepting this, 
when one looks at other technical aspects.  A few years ago the bonds led 
and S&P followed, which must have been great for the player of the 
instrument that makes some quite solid trends, when it goes.   Today, 
it is the other way round, but it does give those who have lesser stomach for 
big volatility an opportunity of getting it right - according to the Spoos 
movements.   
 
Today has been more whipsaw than most, but the 
movement of the one has very definitely helped to trade the other.  Some 
days, depending on where the resistance and support is, it can be very helpful 
indeed.
 
Anyway, I point this all out for those who may 
think that the bonds moves like watching paint dry, whereas the Spoos makes lots 
of big points quickly....  Today might have been a good range day on the 
bonds, but it wasn't, but reading the chart while tracking the Spoo, provides 
good trading opportunities for good r/r/r trades.
 
All comments welcome, but I hope this helps some 
people put daily bread on the table...
 
Bill Eykyn






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