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Waiting for Congress To Act F2 Comments: Market was range bound due to the pending CDO debt bailout legislation. Will probably be that way again tomorrow. See the market as a range trade until the Congress acts. Resistance was tested today above 118-00. Expect support to be retested OVN. Some...

Tough Call For Tuesday 9/23 F2 Comments: The market opened lower and did sell hitting 116-13 before the selling exhausted itself. The market did begin a slow recovery off of the selling in the ES. The financials ignored the spike in crude and gold and closed at 117-135 in the day session...

Preview For Monday 9/22 F2 Comments: The Central Bank intervention rallied the stock markets around the globe and brought heavy selling into the fixed income sector. The question for Monday’s market is whether this was new selling or just long liquidation. The OI in the 30 Y suggests more...

Volume Exhaustion Follow-Up The attached chart highlights 4 examples of the volume exhaustion trade the occurred in the first 3 hours of trading on Thursday, 9/18. 1. 8:30am: Spike up with the mode in the lower 3rd of the bar and a close below the mode. The trade is to go short below the...

Volume Exhaustion - Another Basic Trade Another high percentage trade to add to your arsenal is the volume exhaustion trade. The tip-off that a VE trade is setting up is the width of the volume histogram bar in the first panel below the 5 min F3 Chart. One would typically expect that when...

Monday Wrap-Up F2 Comments: The financial woes continue. Lehman Bros. and Merrill Lynch left the world of the independent and have been taken over by a bank and a bankruptcy court. The economic news was also negative and the financials showed it by rallying and holding their gains. The Bond...

Monday Levels ES Resistance 1210/12, 1215/17, 1220/22 Support 1200/02, 1190/92, 1185+/- ZB Resistance 121.12/16, 121.20/24, 121.28/122.00 Support 120.20/24, 120.12, 120.00 Be very cautious. Any news announcement about Lehman, B of A, Merrill can send the market off on a sudden move...

Preparing For Monday 9/15 F2 Comments: The market rejected 120-16/20 for the 3rd time and EOW (end of week) profit taking ensued. Hard to fight the desire to lock in profits and Bond traders didn’t. The lower the market went, the lower it went. The selling fueled more selling. Funny how...

Defining Your Edge by Keeping Records If your goal is to trade for a living, you have to develop an "edge" on the market. Many traders believe they have an edge but lack the evidence to quantify that edge. First you must define the parameters of the trade you are considering, eliminating...

News As Forecast Would Be Good For Bonds F2 Comments: A pause day w/both buyers and sellers active at times in the day. The market rejected 120-20 and 119-16/20 and closed at 120-00. It is pointed higher w/some help from the news. If tomorrow’s news is as forecast, it would be supportive...

Finishing Early - Setback Redux Ok, I'll admit this is getting a little boring, but I'm trying to make a point. The best time to trade the Bonds is early in the day and you can make your business plan early, then watch the rest of the day. Or do something else for enjoyment. And you don't...

The Setback Trade on Tuesday 9/9 Attached is an actual example of the setback trade's implementation on Tuesday 9/9. Point 1 was the initial setback trade of the day - a 6 1/2 tick pullback from the trend. This trade didn't produce the desired 4 ticks of profit I need to make my daily...

Sticking to the Basics The Bonds on Monday 9/8 provide a perfect example of the TIE Setback trade. The market had just rallied 30 ticks, then pulled back 10 ticks. If you'll remember, a pullback of 6 to 12 ticks is required for this very basic trade. The push to a new low occurred on...

Friday Recap and Idea for Monday F2 Comments: The unemployment news was supportive and the ZB hit 120-08 off this news. Failure to generate follow through buying brought in the inevitable EOW profit taking as longs liquidated and short term traders initiated new shorts. The Bond closed weak...

Bonds Higher and Holding F2 Comments: The market was higher again off of supportive early news and August Retail Sales reports. The ES was off due to this news and finished weak. Tomorrow’s news as forecast is supportive for financials: NFP is expected at -70K; Unemployment at 5.7%. If this...

Signs of a Failed Retest On Wednesday, September 3rd, the Bonds had been trading in a relatively narrow range of 118 to 118.12. At 10:01 118.04 was being retested. The attached chart is a 3 bar reversal. The number in the rectangles is the delta (contracts traded at the ask minus contracts...

Rally After Negative News F2 Comments: The market rallied after negative early news. That is significant. This brings in short covering and new buying. Will have to confirm w/the OI numbers tomorrow morning, but the Bond finished higher again today. Would have liked to have seen more volume...

Inverse Relationship I never, repeat never, trade the bonds off the direction of the ES. This comment by Charles is only a general observation. The trades I take are clearly described in my posts. They only utilize signals which I feel give me an edge.

Follow-up To The Big Move F2 Comments: Market sold as per the analysis. The inverse relationship w/the ES dominated the early trading. The news was supportive for Bonds as was the fall in commodity prices. When the ES couldn’t hold the 1300 level, the Bond began its recovery hitting 118-095...

Prep For Tuesday's Trading F2 Comments: The early news was bullish and the Bond failed to hold its initial gains. Failure to rally after bullish news started the selling and this selling was present into the close. The close was weak. The market is pointed lower w/out news on Tuesday...