Bond Trader 2007

[johnpinochet]

Quote from johnpinochet:

Monday, 10 December 2007 0754 hrs CST

View remains the same as previous market observations post. 30 year yield on the Daily remains in a buy hence the ZB remains in a sell.

With that being said, let's not be foolish. This has been a good run and if you are in multiple contracts you should take some off.

I was asked via PM what my current thoughts are. The above post is it. Take some or all profits and wait for another shorting opportunity. In particular what would I do with important reports this week? The same: I would exercise caution and may exit all, waiting for another opportunity later. Capturing a 3 - 6 point move in the ZB is possible (I've never done it), but there certainly are a lot of 16 tick to 1 1/2 point moves within a 3 - 6 point move.

For those who may look at this much later in the future, the date of this post we hit a low for the week, then rallied a couple of points on 11 Dec 2007, followed by a couple of points down to close the week at 113 26 according to the CBOT ZBH8 quote.

The point? Per the quote, exit, wait and short again. Nothing spectacular, just a combination of using common sense, i.e. take profits at predetermined levels, be wary of important report days, and finally the assistance of my WGSR stuff.

Status remains the same: i.e. 30 year yield is a buy, thus ZBH8 is a short.

We are in the middle of a move, so if you aren't in already you should wait for an ideal entry. The only other consideration is that we've been in a multi-day/multi-week down trend on the ZBH8 daily so odds are that a multi-day buying (long ZBH8) opportunity is coming up soon.

 

[johnpinochet]

Just an FYI, with the holidays plus other commitments I won't be able to post much. Any shorts from last week should have stopped out for a profit on Monday or worst case Tuesday.

Based on my analysis, the following numbers are very important to watch:

115 24
115 08

Yesterday's activity (19 Dec 2007) on the 30 year yield tells me that something is going on in terms of a possible change in trend. The 30 year yield daily chart lows printed yesterday, started playing with the daily range established on 06 Dec 2007.

So, in conclusion, I was waiting for an ideal short entry, however based on the above 30 year yield activity, I'm simply going to bide my time. If I see a good setup on the hourly I may take it. Otherwise, I think now is a good time to take a break for a week or more.

My bias has changed from short the ZB, to cautious based on the daily 30 year yield chart.

The hourly on the other hand, using my same chart setup as the daily has been bullish since Tuesday.