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

bthomas · Jan 27, 2009

Fed Announcement Today

F2 Comments: The market was set to trade higher today and did. The early news was supportive too. When 129-08/12 held on the retest of support, the market turned buyers and we saw higher lows as the bids moved up into the 2Y Note auction. It was a good one and it showed w/131-09 touched before the buying was over. The close was strong. The market activity analysis favors a retest of todayâs high and/or higher tomorrow. That said, if the buying doesnât get started off the day session opening, the market is likely to be on hold until the FOMC announcement from the Fed. If the OVN session is lower, want to buy early weakness and see if 131-09 is taken out. If 131-09 holds in the OVN session, the long becomes suspect. Buy zone is 130-17/25. The sell sets up with a failure to take out and hold 131-09.

bthomas · Jan 28, 2009

Early Morning Comments From Charles Cochran 1/28

(06:48)_Market played to our script OVN. Traded lower first allowing buys in our recommended range of 130-17/25. THE OVN low was 130-135. And resistance at 131-08/12 basically has held too w/the current high of 131-10. Not much is expected to be changed in FOMC announcement. Expect the Fed to reiterate that rates will be kept low for a long time and that they will do whatever Is necessary to support the economy through low rates and the buying of Treasuries and assets from troubled financial institutions. Think the market will trade in a range through the FOMC announcement. Want to sell failure to take out 131-08/12 and to buy the 130-17/25 area w/signs of selling deceleration.

bthomas · Jan 29, 2009

5 Year Note Auction Today

F2 Comments: Todayâs market was in a word a whipsaw. The market did rally as per the analysis hitting the 2nd projected resistance level. The #2 support/resistance levels quite often are the day session highs or lows. Did the FOMC news break the market? Or were the dealers setting up tomorrowâs 5Y Note auction. Will know the answer to this question tomorrow. Based on todayâs analysis and the Dealerâs propensity to run prices down prior to an auction I want to sell early strength once and see if 128-135/20 can be taken out. If not, will cover and look to the long side of the market. Aggressive sell zone is 128-31/129-03. Back up sell is 129-11/15. Cover and/or get long, if 128-135/20 holds.

bthomas · Feb 2, 2009

Opening Comments for Monday 2/2

The OVN market was up over a point from weakness in the indexes round the globe. Some articles out speculating about the extent of the soon to be second/third round of banking intervention by Central banks too. The focus was on US MBSâs and the Fedâs next steps to get lending restarted. The market will get this type of article until the next step is finally out. There is still a seller above 127-24. If that proves to be resistance after the day session opens, then light selling should enter the market. Think the issue wonât be resolved until the ES day session opens and the ES finds buyers or more selling ensues. First band off support is 127-04/08 followed by 126-28/127-00. OK to sell failure at 127-24/28. OK to buy first time lower in the 127-05/09 area.

bthomas · Feb 2, 2009

Market Recap for Monday 2/2

F2 Comments: Bonds were bought off the night session opening and the early buying took prices to near resistance at 127-28. The range was extended over lunch and did close strong. The market activity analysis favors higher prices/retest of resistance. If resistance does hold, then some retracement should be expected. Little in the way of news to drive tomorrowâs trading. The focus should be the ESâs direction. Pending Home Sales is expected to be Unchanged tomorrow. Want to buy early weakness and see if 129-00/04 can be taken out. If it holds, will start to look to the short side of the market.

bthomas · Feb 4, 2009

ADP Employment & ISM Services News This Morning

F2 Comments: The market sold today after yesterdayâs strong rally. The market may be trying to move into a bracket, if 126-00 holds up on a retest this week. The Fed has stated that it will hold interest rates low for a long time and that they will force the spreads to narrow between Treasuries and all other debt securities. Some news tomorrow: ADP Employment Index is expected at -515K and ISM Services at 39.0. If as expected, this news should help support Bond prices. Given todayâs market action, I want to sell early strength and see if 126-00/08 can be taken out. If not will look to the long side of the market.

bthomas · Feb 4, 2009

Trading Scenarios for 2/4

Posted in the TIE trading room early Wednesday morning.

Charles Cochran: (06:54)_OVN market found buyers inside yesterdayâs late sell -off. If the early activity retests support and it holds, the trading range scenario will gain credence. If the market doesnât break support , then day traders and short covering could take the market back into ovn resistance at 127-16/20. The single prints at 127-17/18 is key resistance, IMO.

See two trades this morning after the ADP news: a sale, if 127-00/04 does hold as resistance, or a buy if 126-20/24 holds on a retest. This morningâs direction and trade may take a bit to sort out. The refunding announcements will probably be the marketâs focus after the ADP and ISM numbers are out of the way.

bthomas · Feb 5, 2009

Market Waiting for Friday's News

F2 Comments: The market did try to sell today as per the analysis and market structure. The selling was over by C period. The market was whipped around by the news, refunding announcement and comments to of Washington . The size of this yearâs borrowings has the market on an edge, ready to move a point or two off of news and comments. After the low was established the market traded in a relatively tight range.

The market is ready to start a new move out of the 126-16 area. Some news to impact the trading tomorrow, but I think Fridayâs news will hold the market in a relatively tight range. If they canât break it early, look for a trading range market w/some light short covering. Want to sell early strength, especially above 126-28 and see if 125-25/126-00 can be taken out. If support holds, OK to trade from the long side.

bthomas · Feb 5, 2009

NFP/Unemployment - Biggest News of the Month

F2 Comments: The market was on hold today due tomorrowâs NFP news. The short covering was over by C period. The ES rallied. The ZB setback to close at the HV# at 127-00. The market remains in a downtrend. The uncertainty about upcoming debt issues from the Treasury has the bond in a downtrend even though the fundamental news remains supportive.

Tomorrowâs news is the biggest news of the month historically. Monthly highs and lows usually are established on Unemployment news. NFP is forecast at -550K and Unemployment at 7.5%. Either of these numbers can come in higher than forecast. Best way to handle news of this sort is to trade the first correction after the news release. Today is a news day trade.

bthomas · Feb 6, 2009

Market Sells in the Face of Supportive News

F2 Comments: This morningâs news was supportive for financials yet the market sold. This has been the case of late as the Treasury borrowing have grown w/no top in site. The cost of borrowing is going up and quickly too. Next weekâs quarterly refunding could be a factor too.

The Dealers like to run prices down into an auction and then cover to support the actual auctions. No news to drive Mondayâs trading. Want to sell early strength and see if 125-00/12 can be taken out. If it holds, will cover. First sell zone is 125-31/126-03. Back up sell is 126-11/15. Cover, if 125-00/12 holds.