Lower profit stops... no reason to give too much back. I'm still holding....nothing but air here.....
OK, we've had a rather remarkable day. You should be up an additional 120 USD from this trade on 1 contract. I count three profitable trades for me (and of course the chop from earlier). Even though it is only 0938, I'm carefully considering calling it a day on bonds....the market is wild.....up and down... Kissing 112 11 is close enough to my call of a 112 07 low support. In case you're wondering I'm trading real money, and I'm an adult out of college and graduate school.....
If you are thinking about going short again here at 112 21 or better, only do it this once. Look back at the support and resistance for today, and you'll see that you've been able to bank on trading off of it every time today. That is bound to change at some point. It is still early in the day so odds are that there is still movement left, but remember yesterday had a 2 hour window from roughly 1100 to 1300 CST where we traded in a 4 tick range. Talk about a time waster! I'm still with calling it a day. I just thought I'd offer that advice as we hit 112 21 again.
Also, remember, even if you went short, that a failure to test lows is indicative of a need to take quick profits and get out of your trade. Personally, I'd still be looking for one more re-test of 112 15 or lower. It is just that 3 profitable trades in a row today, plus an unbelieveable 3 straight days of spot on bond market calls is making me nervous. Better to end the week on a positive note and disappear forever as I alluded to in an earlier post.
As I promised above, here is the Recap of 26 January 2006 I wrote prior to the market open. ATTENTION: The below post was written on 27 January 2006, several hours before the market opened. The below is a recap of bond market activity on Thursday 26 January 2006. Any references to "yesterday" are meant to refer to Thursday 26 January 2006. I hope everyone enjoyed the ride yesterday. So far I'm two for two on commentary. Let's see what I can do today. First, a brief re-cap of yesterday. If you recall, before the market open and before the report, I provided you with the following: price levels of support and resistance, bias to the downside for the first 2 hours, stressed the importance of 113 01 as a key number, stressed the importance of 113 22 as a key target on a down move In addition, after the market open, I called the 0930 time cycle low (ahem ahem) at 0900, and I suggested that traders might bounce off of 113 22, so 113 23 might be a good place to take half profits. Although I'm not going to do this on a regular basis, let me go over the three no brainer trades that should have been taken yesterday, assuming you were fast enough. The first trade occured immediately after the report. After the report came out at 0730, prices spiked down to 112 22 and came back up to 112 31. You would have gone short at 112 28 - 112 31. Knowing that you are still within the dangerous window of 1 - 5 minutes after a report, you would look to get out quickly during a retest of 112 22. The second trade occured after we re-tested 112 22, and over the course of 30 minutes, came back up to 112 31. You would have gone short this time anywhere from 112 26 - 112 30. You may have gotten stopped out. Once you saw that 112 31 held for resistance you would have gotten back in again short, if you had been stopped out. This trade would have targeted prices below 112 22. I had my outlier at 112 09, so I knew that we had a good chance of stopping somewhere between 112 22 and 112 09. As it turns out we stopped at 112 15. Your safest course of action would have been to take 1/3 off at 112 22, 1/3 off at 112 16, and finally, 1/3 off at 112 20 when it became obvious that 112 15 would hold. The third and final trade occured when prices retested 112 22 and came back down again to 112 14. You would have gone short at 112 20 or so, and looked to get out at 112 16, 1 tick off of the previous low. One thing that you absolutely did not want to do. You absolutely did not want to hold on to this third trade if you didn't get out at 112 16. Let's pretend that you didn't get out. Why wouldn't you have? If you saw prices play with 112 15, you may have been thinking to yourself that we could go lower. You may even have been thinking that we would have another full point plus move, just like Wednesday, 25 January 2006. Assuming the above, you would have watched with some dismay as prices started going back up to 112 18, then 112 19, then 112 20. You would be thinking that maybe you should just hold on as after all 112 22 is a solid point of resistance and we probably won't go above that. Guess what? You would have been right! However, you would also have wasted 2 hours of your life, as you had to wait that amount of time to watch prices trade back down to 112 16. Prices stopped there and finished the day higher at 112 25. What did you get for your two hours of trouble? 3 ticks instead of 4, and a lot more stress, not to mention the risk of being in the market for two hours instead of 15 minutes. Hopefully, you did not let the above hypothetical situation happen to you, however, as I was going over my trades yesterday, I saw that situation as a possibility that I should write about. Another thing to take away from yesterday regarding that two hour rectangular window of 112 19 <=> 112 22 is that the range established will bear watching over the next few days. A significant break above will lead to a retest of highs, and vice versa. For today, 27 January 2005, I am neutral. I am neutral because we had a point plus move on Wednesday, and a decent down move on Thursday. While it is certainly possible that we will continue lower, I think the low risk conclusion is to remain neutral and let prices and your chart indicators dictate your action. It is simple common sense. How many points from the high of a few days ago can we continue to go before having a reversal, no matter how short lived? That is a rhetorical question. For reports we have GDP at 0730 CST and New Home Sales at 0900 CST. Of the two, GDP is more important. Leaving the fundamental reasons aside, it is important because it is a 0730 report! It may set the tone for the day. If the GDP continues to reinforce bearish news for bonds, and your 15, 30 and 60 minutes are bearish, you may want to consider short trades off of tests of resistance. Finally, a word of caution concerning the double 00's on the 30 year. Anytime prices approach the double 00's, you must be very careful. There will be a lot of activity, both a few ticks above as well as a few ticks below, before you are able to establish the "real" direction of the market. ATTENTION: The above was a recap of 26 January 2006. I was unable to post it pre-market 27 January 2006.
Good morning! As we all know now, the reports on Friday showed strength in the housing market and a slowing of economic growth. Today we have Personal Income and Outlays at 0730 CST. This report will be important because of the markets desire to see if there is any support for the strange GDP report on Friday, as well as the fact that it is a 0730 report and that it is the first economic report out this week that might very well set the tone for the rest of the week. On the technical side, due to Friday's activity and Friday's close, I really don't have much to add regarding my areas of price projection. Here are all numbers. Price activity from 26 Jan 2006: 113 01 - a line in the sand for an upside move 112 22 - important bounce number 112 15 - low 112 11 low Don't forget that really strange 2 hour trading range mentioned in my 26 Jan 2006 recap. Price projection numbers: 113 10 113 01 112 21 112 07 For the outliers, I must go with two numbers for the extreme high and two numbers for the extreme low as the rate of occurence in my calculations for all four numbers is significant. Outlier high: 113 22 113 16 Outlier low: 111 30 111 24 I have a slight bias to the downside, so I might be taking shorts off the high numbers listed above. It all depends on this report.