Inverse Relationship Between ES and ZB Continues F2 Comments: The analysis called for higher prices today. Economic weakness spilling over into the ES was the basis of this projection. The early news was close to expectations except for Industrial Production, which was better than forecast, but then over looked. The expectations for a weak economy continue to grow. And the inverse relation between the two contracts continues. The ES got hit into its close and finished weak. The news tomorrow: PPI is expected at -1.8%. Core PPI at +.1%; and Net Foreign Purchases at 17.0B. Donât think that inflation will get as much play as Net Foreign Purchases. If the ES is sideways/lower, want to buy 118-21/25 or 118-17 OB and see if 119-04/08 holds. If it does hold, will look to the short side of the market.
>>Donât think that inflation will get as much play as Net Foreign Purchases.>> Do you think that today TICS will be more weighted than PPI?
Bernard, Charles is rebuilding his charts this morning. I'll get you an answer as soon as I can. This particular daily calendar usually provides a good market focus. http://www.nasdaq.com/asp/EconodayFrame.asp
Net foreign purchases should be the focus over PPI this morning. We also have the added issue of Paulson and Bernanke testifying in from of Barney Frank and Chris Dodd, et al. That should be interesting.
Bond Closes Higher Again F2 Comments: The market opened better and held its gains through lunch. The early news was again supportive. The market activity analysis also favored higher prices. When the ES rejected 865/67 the buying increased in the Bond and it traded higher to close strong. The market is pointed higher tomorrow too w/some help from the news. Tomorrowâs news: CPI is expected at -.8%; Core CPI at =.1%; Housing Starts at 780K and Permits at 772K. The focus should be the housing numbers. Want to buy early weakness and see if 120-14/16 can be taken out. Want to buy 119-29/120-01. Might take 120-05âs to get in. The close was strong in the Bond.
Declining Volume Can Signal The Market's Intention After a volume spike, you're left wondering if the market is going to breakout, consolidate, or revert to some prior important level. Watch the bars after the volume spike for your clue. If the bars are skinny and narrow, it indicates a lack of interest in retracing. The aggressive trader will enter when price trades out the top of the narrow bars (in an uptrend of course). This is a pattern that occurrs with regularity and should be one of the basic trades in your playbook.
The ES Will Determine The Bond's Trading Direction F2 Comments: After a trend day the next day is most likely to see some retracement, sideways movement as the market consolidates the previous dayâs news. This is what happened today. The OVN session found sellers above 128-00 and the day session caught selling above 127-00. Support was tested at 124-24, a HV#. And as per Rule#2, the HV# proved to be support. The market recovered to close at 126-025. The market activity analysis is split for Mondayâs market. The market can trade either way come Monday. Mondayâs news: Existing Home Sales is expected at 5.05 M. If the ES is higher, will trade form the short side. If the ES is lower, will trade from the long side. Sell zone is 126-11/15 OB. Buy zone is 125-09/13 OB.
Getting Ready for Thanksgiving F2 Comments: A day that certainly took most by surprise. The sharp selling on Monday reversed OVN and the market hit 128-04 before the buying was over. The market tried to break 126-24 three times and it held leading to a new intraday high before the post day session market closed. The market is pointed higher w/out news. Tomorrowâs news: Durable Orders is expected at -2.5%, Jobless Claims at -500K; Personal Income at +.1%; Personal Spending at -.7%; Chicago PMI at 38.5; Michigan Sentiment at 58.0; and New Home Sales at 450K. Want to buy early weakness and see if 128-12 can be taken out. If not, will look to the short side of the market. 1st buy is 127-09/13. Second buy is 127-01/05. Exit and or reverse, if 128-08/12 is rejected.