Bond Trader 2007

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Today has been absolutely wonderful. If you look at the 1 or 5 minute chart you'll see that every "buy the dip" worked without fail. I would think that one would be done trading now at 0913 CST given the amount of range each dip provided as well as the fact that every trade worked.

I don't like that we are kissing 109 09 now given that we have been all the way up to the mid 109 20's so, yes, this may be the very best time to buy, but I would be cautious. Bring size down. This assumes you nailed the "buy the dips" trades, and have built up your account today.

My gut feel, is that we will test the highs one last time. I would forget about my upper range target of 109 28 and focus solely on 109 19 as a reasonable target for all remaining buys today.

Right now at 0918 CST we have been as low as 109 07. I really find that odd, given how far down the YM has been as well as how bad the news was for the YM and good for the ZB.

By the way, my SRS purchase in my 401 K from way back when is now 104.28. I don't plan on exiting that anytime soon. And yes, I'm still 100% invested in SRS.
 
Best Guess as of 0934

It looks like the WG put in a low here between 0915 and 0934.

I think price could fluctuate up and down now for an hour or two, but I would look to play the range now between the following levels:

109 07 to 109 12

109 12 to 109 18

Use your own stuff to make the calls. Those are the ranges as I see it as of this moment in time.

Update 0938 CST

Use the 1 min 0902 bar and the 1017 bar on the ZN to establish a range. Just a quick observation tells me that the ZN may be the better of the two to play the range trade today.

I am going to exercise for 30 min. Good trading!
 
Quote from johnpinochet:

Best Guess as of 0934

It looks like the WG put in a low here between 0915 and 0934.

I think price could fluctuate up and down now for an hour or two, but I would look to play the range now between the following levels:

109 07 to 109 12

109 12 to 109 18

Use your own stuff to make the calls. Those are the ranges as I see it as of this moment in time.

Update 0938 CST

Use the 1 min 0902 bar and the 1017 bar on the ZN to establish a range. Just a quick observation tells me that the ZN may be the better of the two to play the range trade today.

I am going to exercise for 30 min. Good trading!
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I think this is a good note to finish on. It doesn't get any better than the above. It doesn't get any better than today.

I've mentioned this before to help illustrate one of the key fundamentals of trading. You must get redemption days down pat. If you can't trade a redemption day, you can't build up a war chest. Money is handed to you on days like to today. Sorry to harp on this over and over but it really is a key point.
 
I'll try to track down the PDF that is part of any explanation.
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John,

thanks, I'm waiting in breathless anticipation. Hope you didn't miss YM pivot times today :) Good luck!
 
The lack of decisive follow through on rising bond prices when the YM is down 300 points is disturbing. I think we may be witnessing the beginning of a topping out in the ZB. This is just an observation. I've been glued to the monitor for quite a while this AM, watching what the ZB does each time the YM goes down 50 or more points. Maybe I'm spoiled with the incredible range we've been getting this month, but it just didn't seem like the bonds were getting the respect they deserved in particular when we were down 300 on the YM.

Of course now at 1200 we could consolidate and go up to 110 05, but I don't think so. I think the bonds are petering out.

No shorting for me today. I've only gone long all day.

I think tomorrow may be setting up for a nice short trade.
 
Quote from johnpinochet:



***SNIP***

My gut feel is that something is up for today. It is possible that other markets will allow for a better opportunity, i.e. the YM or ES.

More later....
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I posted the above at 0652 CST. If only I could document a gut feel. I didn't say it at the time as I didn't want egg on my face, but I envisioned some kind of a drop.
 
A brief amount of religion is discussed below as it relates to why I chose the word redemption to use in my phrase "redemption day." Read no further if you have no interest in such things.

redemption

noun
1. (theology) the act of delivering from sin or saving from evil
2. Deliverance upon payment of ransom; rescue.
3. (Christianity) Salvation from sin through Jesus's sacrifice.

I've received a PM asking me to explain further the idea behind a redemption day. We've been over this one many times, but for folks who are new or haven't had a chance to read both journals here is the explanation. On my next update of the glossary, I'll add this phrase.

I came up with the phrase when I began to think about a quick and easy way to refer to a day when you may have not had a good week or even a good month and then along comes a day like today and everything clicks. Every trade works. Your daily net profit is 2 to 5 times your normal average daily net profit.

Of course as a Christian it was easy to know and use the word. I mean no disrespect when I draw the parallels. Think of a redemption day as a day where you are able to cover over a multitude of your sins (bad trades).

In conclusion, on redemption days, when everything is easy and you are being handed money, you must take your bucket and put it under the faucet. You must stand, and remain ready with additional buckets.

Things to ask yourself today:

1) Were you able to identify that generally speaking you shouldn't short today?

2) Did you take most of the textbook, elementary school simple "buy the dip" trades that came up today?

3) Did you short all the way up, thinking that we couldn't go past 109 16 (an important number by the way)?

4) Did you end the day with a minimum of twice your normal daily net profit?

5) If you did short, did you tell yourself to be cautious and have a tight stop and reversal buy order in with the stop? (This one is very important for those who wish to play with fire.)

That is it for now. There are many more things to say and think about but the above should do the trick.
 
0805 CST Trade of the month occurred at 0800 CST.

The ZB was 109 25 or so and the ZN was making new lows. You had an automatic 2 - 4 ticks net profit right there.

These days are incredible. It is a shame that they will end and we will go back to narrow 4 - 6 tick ranges for hours at a time.
 
Important levels for today:

109 30

109 25

109 22

109 18

Important times:

0828 0900 0930

By the way, the above levels were established yesterday, and reinforced today.
 
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