The 3-2-1 Approach: A Simplified Method for Trading Any Market

bthomas · May 13, 2009

Wednesday 5/13 Opening Remarks

(06:08)_The market did find buyers close to our recommended buying levels OVN and is pointed higher this morning w/some help from the Retail Sales news. This has been revised upwards to RS called Unch. And ex-auto +.2%.

Some selling in the ES in front of the news, probably long liquidation. Probably light short covering in the financials. News stories OVN bearish in tone for the economy. So Retail Sales could have a larger than normal impact this month.

The ESâs reaction to this news is likely to tell the tale of todayâs tape. If equities roll over in the next week or so and the rally is relegated to a bear market rally, seasonals for the financials are bullish. They tend to rally from spring into the early fall. If the news is as expected, I think the financials will retest ovn resistance, then to the ESâs reaction to the news.

bthomas · May 14, 2009

Wednesday's Wrap-Up

F2 Comments: The market was pointed higher from Tuesday's close. Wednesdayâs news was supportive. The ES sold. The financials rallied. Pretty simple when you think about it.

The Bond rallied to 123-00 resistance and is set to trade higher Thursday. If we get through 123-00, not much to stop the rally until we get to 125-00.

Some news: PPI is expected at .1%; core PPI at .1%; Jobless Claims at -630. Think the focus will be Jobless Claims. If <600K or > than 650-K, I think the marketâs volatility will increase.

Want to buy early weakness and see if 123-00/12 can be taken out. If not, will exit and begin to look to the short side of the market. First buy zone is 122-21/25. Back up buy is 122-17OB. Exit the trade, if 123-00/12 is rejected.

bthomas · May 18, 2009

Charles Cochran's Comments for Monday 5/18

F2 Comments: The market hit our back up sell zone and sold. Fridayâs weakness brought more today and the selling was still present after the day sessionâs close.

The market is pointed lower Tuesday too w/some help from the news. Tuesdayâs news: Permits is expected at 30K; Starts at 527K. These numbers could come in higher than forecast given the current interest rates.

Want to sell early strength and see if 120-12/16 can be taken out. If not, will begin to look at the other side of the market.

bthomas · May 19, 2009

Pre Market Comments for Tuesday 5/19

(06:01)_The financials sold OVN off of new selling (a short hedge) and strength in the indexes. The analysis was a sale from yesterdayâs analysis and heavy selling. Looks like the markets are playing for better than forecast housing data, continued improvement in the financial sector and commodity prices are rising from Asian demand (expected to lead world's economic recovery).

So some news to navigate today. Down to the ESâs reaction to the housing news. Many timing forecasters are looking for a top this week/month in equities. We will see. As long as the indexes are higher, it will be easier for the financials to sell.

First Note sell zone is 120-15/19. Back up sell is 120-23 OB. Cover, if 120-00/04 holds. If 120-00/04 does hold, OK to paly form the long side in anticipation of a consolidation/pause

bthomas · May 20, 2009

Market Pauses on Tuesday

F2 Comments: The heavy selling from Monday paused, as one would expect. The likelihood of two trend days in a row without a major new piece of news is slim. The market moves and pauses, then moves again. Todayâs action consolidated Mondayâs big move. The early Housing news was supportive and we were looking at a âPâ by the day sessionâs close.

The analysis is mixed for Wednesday. This usually leads to a trading range day. The OVN session pulled stops below yesterdayâs lows. Would imagine that stops will be pulled above 120-20 tonight or tomorrow.

Little in the way of news tomorrow: crude inventories w/a small draw expected in crude and last monthâs FOMC minutes. Can buy early weakness for 120-09/13 or sell failure at 120-31/03.

bthomas · May 20, 2009

FOMC Minutes Positive for Financials

F2 Comments: The NOB spreading early in the session made the ZB look stronger than the ZN. Volume was slowly moving higher in the distribution before the FOMC news hit the market. The news was positive---more repos, if needed(already have approved 1.25T); economy soft, but showing some signs of bottoming; inflation not a problem.

The Bonds rallied and the ES sold. The close was strong. The market is pointed higher w/some help from the ES and news. First buy zone is 122.09/13. Back-up buy is 122.01/05. Want to buy into early weakness and see if 123-00/08 can be taken out. If not, will begin to look to the short side of the market.

bthomas · May 21, 2009

Heavy Selling Thursday on Treasury Announcement

F2 Comments: The analysis favored higher prices or a retest of 123-10/12, resistance. The market hit 123-10. Resistance held.

The Treasury announced an auction of 101B next week and a lower repo amount and the market broke. Options expiration speeded up the selling as market makers dumped their outrights needing to cover the calls sold. The market hit 120-00 before the shorts covered. The close was weak. The market analysis favors lower prices or a retest of 119-315 tomorrow.

If support does hold, then EOW/pre-holiday short covering could take over and rally the market back for a positive close. Want to sell into early strength and see if 120-00 can be broken. Aggressive sale is 120-15/19. Back up sell is 120-23/27. Cover, if 119-24/28 then holds.

Globex is open for the entire session, but the pit closes at Noon central time. Would expect a very quiet afternoon.

bthomas · May 22, 2009

Note Whacked Again on Friday

F2 Comments: The Note has been whacked two days in a row and finished weak. The market is pointed lower for Tuesday too. The Dealerâs manipulation should bring in buying by Wednesday afternoon or Thursday morning.

Some news on Tuesday: Case-Shiller Index is expected at -18.5/6 and consumer confidence at 42.0.

Want to sell early strength and see if 118-20 can be taken out. If not, will cover and consider a long. The first sell zone is 119-11/15. The back up sell is 119-19/23. Cover, if 118-20/24 holds.

bthomas · May 26, 2009

Another Day of Selling in the Bonds/Notes

F2 Comments: The market got whacked again on Tuesday. It did rally a bit, almost reaching R#2, 119-20/215. The day session high was 119-185.

The selling started off the Consumer Confidence number, which was much higher than expected. The Auction was better than expected and the Note did rally 6/32nds after the auction before reversing to make new intraday lows. The close was weak.

The market is pointed lower tomorrow. Want to sell early strength and see if 118-00 can be taken out. If not, will cover. First sell band is 118-15/19. Back up sell is 118-23/27.

bthomas · May 27, 2009

Opening Comments for Wednesday 5/27

(06:35)_Market paused OVN. Think there is one sale in the financials this morning. If the OVN low holds, will cover. OVN news slant favorable for stock market rally. Will have to see if it develops.

Retail chains stores sales, mortgage applications and Existing Home Sales out this morning. Market will be looking for signs of consumer spending and stabilization in the housing sector.

Todayâs focus should be the Existing Home Sales number, then onto the 5Y auction. Sell band for the Note remains 118-15/19 w/a cover, if 118-08/10 holds.

Auction manipulation could go either way this morning. If dealers continue selling this morning, it sets up a buy back after todayâs auction of tomorrow morning. Industry is already heavily short into this auction.