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

bthomas · Apr 1, 2009

Possible Pause Before NFP on Friday

F2 Comments: Another day of buying with a strong close. The structure, news and price activity all support higher prices.

See two scenarios for tomorrow: the first, a pause day while the market awaits the outcome of the G-20 meeting and Fridayâs NFP numbers; the second, a continuation of the rally that takes prices higher in anticipation of bullish numbers on Friday.

Tomorrowâs news: Initial Jobless Claims is expected at -656K; Factory Orders at -.3%.

Want to buy early weakness and see if 131-08/12 can be taken out. Will begin to trade from the short side, if this area is rejected. First buy zone is 1230-09/13 followed by 130-01/05. Will exit, if resistance holds.

bthomas · Apr 2, 2009

News Day Trade on Friday

F2 Comments: The market found sellers in the OVN session when yesterdayâs closing strength failed to bring in new buying OVN. The previous dayâs strength did yield a couple of early buys. The G-20 announcement of another 1T in global stimulus broke the financials and the Bond sold hitting 128-255 before it recovered to close at 129-05.

Fridays news: Unemployment is expected at 8.5%; NFP at -656 K; ISM Services at 42.0.

Friday is a news day trade. We will let the NFP# get out of the way and enter with the news. Failure to extend the initial range will take us out of this trade. If the news doesnât break the market, would expect another range day trade w/sellers over 130-00.

bthomas · Apr 4, 2009

Long Term Bond Bear Reasserts Itself

F2 Comments: The longer term secular bear market reasserted itself today after an as expected Unemployment report. The market traded a one point range until the ES began to recover in D period. The move lower started in D period in the financials and wasnât over until 126-255 was retested. The close was weak.

The market is pointed lower for Monday. No scheduled news to drive the trading Monday. The focus should be todayâs selling and the direction of the ES.

If the ES is sideways to higher, want to sell early strength and see if 126-20 can be broken. If not, will cover and think about the long side of the market. The aggressive sell band is 127-11/15. The back up sell is 127-19/23. The market has to take out 126-20 to stay short.

bthomas · Apr 7, 2009

TIPS Auction on Tuesday

F2 Comments: The market did trade higher hitting 127-235 before the buying dried up. The selling started slowly and accelerated into the close. The close was weak.

No news to drive the trading on Tuesday. The marketâs focus should be the direction of the ES.

There is a TIPS auction Tuesday, which is almost always well supported. The 3Y Note should be well received too. This should set up the 10Y Note auction on Thursday. After the 10Y is out of the way, I think the selling will resume.

bthomas · Apr 7, 2009

3 Year Auction on Wednesday

F2 Comments: Todayâs market was a range trade, period. No news to drive the markets and it showed. By the close the structure supported higher prices tomorrow. No news to drive tomorrowâs trading either.

The focus should be the direction of the ES and the 3Y auction. The 3Y auction is usually a good one too. If the ES sells and the 3Y auction gets off as expected, the Bond should retest 127-08/12 and/or trade higher.

Want to buy early weakness and see if 127-08/12 can be taken out. If not, will trade form the short side. Buy zone is 126-17/21 followed by 126-05/09. Exit, if 127-08/12 is rejected.

bthomas · Apr 8, 2009

10 Year Auction on Thursday

F2 Comments: The market opened w/an upward bias and did hit the first recommended buy at 126-26, with a day session low of 126-26. The rally took the market to 127-295 before the buying was exhausted. The close at 127-16/20 sets up tomorrowâs 10Y auction.

Think the market can rally into or after this auction. Little in the way of news to drive tomorrowâs trading. The focus should be the direction of the ES and the 10Y auction.

Want to buy early weakness and see if 128-00 can be taken out. If it holds, will look to the short side of the market. See two buy zones: 127-05/09 and 127-01 OB. If 127-28/128-00 is rejected, will exit these trades.

bthomas · Apr 9, 2009

Auction Day Strategy

Auction day strategies. Normally one would expect a little selling early in the session, w/a low established in the first hour or two, followed by consolidation, then a rally into or shortly after the auction. Tease the when issued (wi) market and then make them chase the market higher by buying futures contracts. The futures markets remain short, but did take call protection yesterday in fornt of today's auction.

My guess is that this auction will be supported by the Dealers in thier normal fashion and that we shouldn't expect follow through selling this morning. Gunning stops below yesterday's lows would lead some to question today's strength/give them pause. This ploy would head fake some and set up the subsequent rally I envision. Will see if I am right. In any event, will not be pressing the short side of the market.

Bernard111 · Apr 9, 2009

>>Normally one would expect a little selling early in the session, w/a low established in the first hour or two, followed by consolidation, then a rally into or shortly after the auction.>>

It's been right so...just the rally is missing until now.

bthomas · Apr 9, 2009

F2 Comments: The market began to sell in the OVN session and this selling was present throughout the day session except for that brief period post the 10Y auction. The close was weak. The market is pointed lower on Monday.

No news to drive Mondayâs trading. The EU and UK are on holiday so volumes and ability to take large positions will be limited and the OVN information will be limited.

Want to sell early strength and see if 125-00 can be taken out. If not, will cover.

MJUK · Apr 14, 2009

Quote from bthomas:

F2 Comments: The market began to sell in the OVN session and this selling was present throughout the day session except for that brief period post the 10Y auction. The close was weak. The market is pointed lower on Monday.

No news to drive Mondayâs trading. The EU and UK are on holiday so volumes and ability to take large positions will be limited and the OVN information will be limited.

Want to sell early strength and see if 125-00 can be taken out. If not, will cover.

Hi, I have been reading this thread and am in the process of learning market profile.

I note that you consider the b formation after a downmove to be indicative of lower prices and the p move following a up distribution again as indicative of higher prices to come.

Dalton suggests that both the P and b formations are infact the opposite, a direction move has found an opposite response and now the market is rotating and coming into balance. i.e. it may go lower but it may reverse as well.

Your call yesturday was a case in point. There was a buying extreme in F period and the b formation following the distribution down. the width of the bottom balance area showed trade being facilitated there. i.e. buyers were back in the market follwing the directional move.

I would appreciate your comments please.