What is your experience with the 2 year ZT? It seems to move slower then ZN and the liquidity is less but not that bad. Do you know how it behaves around the Volume profile levels?
F2 Comments: The market was pointed higher on Mondayâs close and did trade higher as per the analysis. By the close of todayâs action the market was still pointed higher for Wednesdayâs market. Some news to navigate tomorrow: Durable Orders is expected at -.9%; ex-transportation at -.5%; New Home Sales at 360K. After the news is out of the way the Noon Note auction should become the marketâs focus. The easiest way to sell Notes is to run prices lower. This will complicate the trading decisions tomorrow. The first indication that we will get that the market is having trouble trading higher will be the rejection of 115-20. The first buy zone is 115-07/11. The back-up buy is 115-01 OB. Exit and or reverse, if 115-20 is rejected.
Financials Reverse Off FOMC Announcement F2 Comments: The market did hold Tuesdayâs gains and managed to trade higher after the 5Y auction results were released. The early news was split, a little better for the ES than ZN. The auction dynamics prevailed and the 5Y rallied into the FOMC announcement. The market reversed off this announcement and closed at 115-06. It is set to trade lower Thursday given the right set of circumstances. Think the Dealers will take the market below todayâs lows to generate some interest in the cash market. Once the selling is exhausted, then the Dealers can push prices higher to move the 7Y paper. The key at auction time will be which side of 115-14 the market trades on. Can buy early weakness when the selling dries up. Or sell early strength if 115-12/20 is rejected. The sell zone is 115-15 OB. The buy zone is 114-25/29.
F2 Comments: Monday was a contained day with both support and resistance tested and holding. By the dayâs end the market activity analysis slightly favors higher prices Tuesday. This will require some help from the ES and tomorrowâs news. Tuesdayâs news: Consumer confidence is expected at 55.1; Case Shiller at -18.75%; and Chicago PMI at 38.6. If ES is sideways to lower, want to buy early weakness and see if 116-24/28 can be taken out. If not, will look to the short side of the market. To stay short the market needs to take out 116-08 and then stay below that level.
Support & Resistance Hold on Tuesday F2 Comments: Today was a sideways session. Both support and resistance held. By the close the distribution was a P. This favors a retest of resistance and/or higher prices Wednesday. If Wednesdayâs news is supportive, and it will be, if as forecast, the Note can trade higher. And if not, it can trade lower too, because resistance has been tested and held both times. Wednesdayâs news: ADP Employment is expected at -370K; Construction Spending at -.5%; ISM Index at 44.0; and Pending Home Sales at +1.1%. The ESâs reaction to this news should set up the dayâs direction in the Note. If ES is sideways to lower, want to buy early weakness and see if 116-24 can be taken out. If not, will turn seller. First buy zone is 116-01/05 followed by 115-25/29. Exit and/or reverse, if 116-20/24 is then rejected.
Unemployment on Thursday F2 Comments: Wednesday was basically a trading range as the market motored sideways into Thursdayâs number. The biggest news day of the month is the Unemployment news. Many times the high or low of the month is set on this news day. Thursdayâs direction will be tied to the Unemployment news. NFP is expected at -370K; Unemployment at 9.6%; Jobless Claims at -615K; and Factory Orders at +.2%. Will trade the news reaction directionally with the news. If the range isnât extended, will exit the trade. Bottom line is know the news and you have the trade.
Unemployment Causes Financials to Rise F2 Comments: The Unemployment news was much better than expected for financials and the Note and Bond rallied as one would expect. The close was strong. The market activity analysis favors higher prices on Monday. Want to buy early weakness and see if the market can close above 119-08/12. Some news on Monday: ISM Services is expected at 46.0. Buy zone is 118-18/21. Exit this trade, if 119-04/12 is then rejected.
Market Structure Favors Retest of Highs on Tuesday F2 Comments: The market held Thursdayâs gains in sideways trading. By the close the structure did favor a retest of todayâs highs and/or higher prices Tuesday. That said, its auction week and the Dealer network will have a couple of curve balls headed our way. No news tomorrow. The focus will be the ESâs direction then the 3Y auction. 3Y auctions are usually good ones. If ES is sideways to lower, want to buy early weakness and see if 119-08/12 can be taken out. If not, will look to work the short side of the market. First buy zone is 118-17/21. Back up buy is 118-13 OB. Exit and/or reverse, if 119-08/12 is rejected.
Short Term Fundamentals Positive for Financials F2 Comments: Another strong day of buying in the financials. The short term fundamentals remain positive. The weaker the perception of the economic recovery or delay of such, the more the financials can rally. The 3Y auction was a good one, but not as good as the recent 2Y. If we can rally tomorrow in the face of the 10Y auction, we will have another good week for debt. This sentiment can change quickly, if the economic news strengthens. Crude inventories on tap for tomorrow. The focus should be the 10Y auctionâs demand and the direction of the ES. Want to buy early weakness and see if 117-20/22 or the OVN high can be taken out. If not, will exit. Aggressive buy zone is 117-01/05. Back up buy is 116-29 OB.
ES Selling Supports Bonds and Notes F2 Comments: The market traded higher off of deteriorating economic sentiment and fundamentals, which led to selling in the ES, further supporting Bonds and Notes. The 10Y auction took the market even higher. The close was strong. The market activity analysis favors higher prices tomorrow w/out the news. Thursdayâs news is limited to Jobless Claims, expected at -600K, and Wholesale Inventories at -1.0. The focus should be the OVN news from the G-8, earnings estimates and the 30Y auction. If ES is sideways to lower, want to buy early weakness and see if 118-23 can be taken out. First buy zone is 118-09/13 followed by 118-01/05. Exit, if 118-24/28 is rejected.