The dip was one to be bought this morning and to hold into Philly Fed. The mortgage guys (Countrywide) were active buyers of calls right out of the gates, on the order of about 10,000 of the May 110 calls. The setup for longs was looking good until Jobless claims, which brought in some renewed selling probably from the dealers. Once again though, mortgages buying a shitload more calls at the lows (rolling about 20,000 March 111 into the April 111) and we found our bid briefly into Philly Fed then futures locals able to push into stops immediately after (compounded by one huge local bidding for 8000 on the screen starting around 21 up to 23, so his offers would get hit, then pulling shortly after for a rollercoaster back down to where we started). Even though longs still seem okay here I would be suspect, dealer commentary puts them as still wanting to get short long end through steepeners and there were a boatload of puts bought by CSFB (20,000 May 107) in the last hour or so today. Have noticed that we have been moving in tandem with Spooz especially today, while earlier in the week it was opposites, not sure what is going on there.
Can you be more specific about exactly WHAT I should be focussing on to trade the bond market? That would be very helpful. Thanks
First of all, there's some good advice in this thread from traders telling you specifically what you should be paying attention to when trading the Treasury Futures. Thus, no need for me to repeat the same info. Secondly, here's that quote I responded to earlier that contained specific recommendation that I strongly agree with (bingo)... Simply, you shouldn't be using the stock market to make trade decisions for trading Treasury Futures (T-Bonds or T-Notes)...at least not as a newbie treasury day trader. First advice...I'm assuming the reason why you started trading 6 contracts is because that's the size you were testing while you were testing your trading plan prior to any real money trades... Correct ??? Here's my rule of thumb for newbie traders no matter what type of futures trading instrument they are trading... For each contract you trade...you must have 10k in your trading account. Thus, you should be trading no more than 2 contracts because you have 20k in your trading account. What I'm hinting at is that money management and position size management are keys to your risk control. You get the above under control and you will have a fighting chance. I also noticed a bad habit you have via putting emphasis on big trades you've made that cleaned away losses. The quote below saids you have what I call reaction lag... If your missing trade signals while watching your charts closely... You either don't have a trading plan or your too new to your trading plan. If the latter above...one more reason why you shouldn't be trading 6 contracts. Now...how do you get rid of reaction lag??? Use EliteTrader.com search menu and look it up because I've talked about a solution for it a few times. http://www.elitetrader.com/vb/search.php?s= Here's another specific advice... On your monitors you should be able to see ZN, ZF, ZB and their respected Yields (Index) all at the same time. Your bullish pattern signal (whatever that may be) in the Yields is a Short signal in ZN, ZF, ZB and vice versa. What I'm saying is that you should be getting trade signals in ZN, ZF or ZB by themselves or in inverse reaction to pattern signals in their Yields (see chart attachment). To understand the above or to make sense of the chart I posted...read the Trading Hammers (revisited) thread. http://www.elitetrader.com/vb/showthread.php?s=&threadid=52880 However, the most important thing on your plate right now is the money management and position size management problem. Next would be your trading plan...a trading plan you've only given generalize info about in this thread as if its very subjective. Therefore, the other thing on your plate is to remove the subjectivity from your trading plan because your not at a level of trading where your experience can compensate for any subjective errors. You wanted someone to tell you its gonna be ok ? It's not unless you make some changes fast or slow things down to a snail pace and allow some experience to get under your skin because Treasury Futures for newbies is one of the toughest game in town and your going up against some seasoned veteran traders (professonally and retail). Mark (a.k.a. NihabaAshi) Japanese Candlestick term
You can tell a true mega bear day if the bonds are down too. Means all money is fleeing and converting to cash or whatever. John
Wow you guys are unbelievable. I have gotten so much useful information. Thank you SO much. If I'm ever in a position to help somebody less knowledgeable than myself (is that possible?...lol), I'll offer it more than willingly partly because of how kind and open you all have been in helping me (well, I am also the type of person who will help people without expecting anything in return). Thanks again
Whoever that guy was mcurto, he is an idiot for doing that and really took a gamble considering the numberS were still coming out when he put the bid in. He was < seconds away from getting hit on all of it.
odds of an 8000 clip going through are very low, and the software he uses removes the bid on any partial fill, it's a tried and tested strategy begun in the german bonds, over the long run it makes far more than it loses. Here's some things to consider today... "The 10yr note is sitting smack dab in the middle of the one point trading range we have been stuck in for nearly the past month. We are clearly on the way down, and we would continue to look for short term opportunities to sell into strength. We would hesitate to try and push these positions for the long term however, as we see no good reason for the note to suddenly decide to break below 109-00 this time. The curve is likely to continue to flirt with 0.0bp until the Fed forces things by tightening the Funds rateâmaybe then things will get interesting. PERSPECTIVE It should be a relatively quiet Friday. Markets may trade briefly off of the Michigan Consumer Sentiment today, which is the only macro number out. But given the lack of attention to the previous macro data this week, we do not expect to see much movement on this relatively unimportant data point. There is an off chance that the speaker circuit will be more interesting, where we have another speech by Richmond Fed President Lacker, a voting member for the first time in 2006. If he believes his hawkish commentary on Wednesday was misinterpreted by the markets, he may make an attempt to correct it today, but otherwise his speech is likely to be a repeat of the material presented earlier in the week. He speaks at 7:00 CST in Richmond, VA and will have a Q&A session after his presentation."
What you are doing is Intermarket Analysis. With all due respect to Mr. Ruggerio, I think IMA is voodoo... or only good for writing up academic, and thesis papers. ....concentrate and focus on one market. Not another market with how it correlates to another market.