The 3-2-1 Approach: A Simplified Method for Trading Any Market
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Opening Comments for Thursday 8/20
Charles Cochran: (07:03)_ES was up OVN and financials are lower. The inverse relationship continues. Some news this morning, but not usually the market moving kind. Focus should be Jobless Claims followed by Philly Fed. The ESâs reaction to this news should tell the tale of todayâs tape. Reasons given for OVN strength in stock markets was Chinese buying. No one mentioned yesterdayâs recovery and positive close in the US markets. The news flip flops almost daily now as players search for a consistent trend in the economic news.
Sell zone has moved lower for financials to 117-29/118-01 and first buy zone is now 117-21/25 followed by 117-13/17. Expect another trading range day unless the ES moves with some authority. Tomorrow is options expiration day for Notes and Bonds.
Charles Cochran: (07:03)_ES was up OVN and financials are lower. The inverse relationship continues. Some news this morning, but not usually the market moving kind. Focus should be Jobless Claims followed by Philly Fed. The ESâs reaction to this news should tell the tale of todayâs tape. Reasons given for OVN strength in stock markets was Chinese buying. No one mentioned yesterdayâs recovery and positive close in the US markets. The news flip flops almost daily now as players search for a consistent trend in the economic news.
Sell zone has moved lower for financials to 117-29/118-01 and first buy zone is now 117-21/25 followed by 117-13/17. Expect another trading range day unless the ES moves with some authority. Tomorrow is options expiration day for Notes and Bonds.
Closing Comments for Friday 8/21
F2 Comments: Options expiration always complicates the trading. 3 out of 4 times the market will close in that range that makes the market makers the most money. That 1 out of 4 times it usually breaks out and runs for 2-3 points as players have to pay up to exit their losing positions.
Thursdayâs buying bias was satisfied by the OVN session and the market was set to trade lower on Friday. Strength in the ES followed by a higher than expected Existing Home Sales number, broke the Note and the selling didnât stop into the close. The close was weak favoring lower prices on Monday. Next weekâs Treasury auctions could have been a factor in the selling too.
Want to sell into early strength and see if 116-28 can be taken out. If not, will cover and begin to think long again.
F2 Comments: Options expiration always complicates the trading. 3 out of 4 times the market will close in that range that makes the market makers the most money. That 1 out of 4 times it usually breaks out and runs for 2-3 points as players have to pay up to exit their losing positions.
Thursdayâs buying bias was satisfied by the OVN session and the market was set to trade lower on Friday. Strength in the ES followed by a higher than expected Existing Home Sales number, broke the Note and the selling didnât stop into the close. The close was weak favoring lower prices on Monday. Next weekâs Treasury auctions could have been a factor in the selling too.
Want to sell into early strength and see if 116-28 can be taken out. If not, will cover and begin to think long again.
Fed Repo Moves Financials
F2 Comments: The market opened and did try to break. Support held and the market began to recover. When the Fed announced a 6.1 B repo of Bonds and Notes, the market rallied to new intraday highs. The close was strong. The market is pointed higher tomorrow with some help from the ES and early news.
Consumer Confidence is expected at 48.0 and Case Shiller at -16.40.
Want to buy early weakness and see if 117-28/00 can be taken out. If not, will begin to think short again. Want to buy 117-13/17 with an exit if 117-225/118-00 is then rejected.
F2 Comments: The market opened and did try to break. Support held and the market began to recover. When the Fed announced a 6.1 B repo of Bonds and Notes, the market rallied to new intraday highs. The close was strong. The market is pointed higher tomorrow with some help from the ES and early news.
Consumer Confidence is expected at 48.0 and Case Shiller at -16.40.
Want to buy early weakness and see if 117-28/00 can be taken out. If not, will begin to think short again. Want to buy 117-13/17 with an exit if 117-225/118-00 is then rejected.
Closing Comments for Tuesday 8/26
F2 Comments: the market did trade higher today after testing support at 117-12± after slightly negative early news. Some economic news does come in higher than forecast and this brings in quick selling to the financials.
After support held the market stabilized and hit the 1300 ET 2 Y auction at 1217-16. The auction was a good one, as usual, and the market rallied to 117-30 before its close at 117-275.
The analysis favors higher prices tomorrow too. The news could impact the trading again with Durable Orders expected at +3.2; ex-Auto at +1.0; and New Home Sales at 390K. Then the focus should turn to the 5Y auction.
The intermediate term auction of late has brought in selling on the auction or after 1400 ET to set up the longest term auction. Want to buy early weakness and see if 118-08/12 can be taken out. If not, will look to the short side of the market. Buy zone is 117-21/25 followed by 117-17 OB. Exit and/or reverse, if 118-08/12 was then rejected.
F2 Comments: the market did trade higher today after testing support at 117-12± after slightly negative early news. Some economic news does come in higher than forecast and this brings in quick selling to the financials.
After support held the market stabilized and hit the 1300 ET 2 Y auction at 1217-16. The auction was a good one, as usual, and the market rallied to 117-30 before its close at 117-275.
The analysis favors higher prices tomorrow too. The news could impact the trading again with Durable Orders expected at +3.2; ex-Auto at +1.0; and New Home Sales at 390K. Then the focus should turn to the 5Y auction.
The intermediate term auction of late has brought in selling on the auction or after 1400 ET to set up the longest term auction. Want to buy early weakness and see if 118-08/12 can be taken out. If not, will look to the short side of the market. Buy zone is 117-21/25 followed by 117-17 OB. Exit and/or reverse, if 118-08/12 was then rejected.
7 Year Auction Today
F2 Comments: The market died today as players were hesitant to take either side. Both sides were well represented by the dayâs end, if the volume is to be believed.
Looking for a new move to develop out of the 117-30/118-00 area. Tomorrow brings the 7Y auction. I think the Dealers will have to take the market lower first to move this issue.
Some news to navigate early tomorrow: Jobless Claims is expected at -550K; Q2 GDP at -1.4%; Deflator at .2%; and Core PCE at 2.0%.
Can trade from either side Thursday. Can buy the 117-21/25 area or sell failure to take out the OVN sessionâs high. And will be looking for a new move to emerge from the 117-30/118-00 level.
F2 Comments: The market died today as players were hesitant to take either side. Both sides were well represented by the dayâs end, if the volume is to be believed.
Looking for a new move to develop out of the 117-30/118-00 area. Tomorrow brings the 7Y auction. I think the Dealers will have to take the market lower first to move this issue.
Some news to navigate early tomorrow: Jobless Claims is expected at -550K; Q2 GDP at -1.4%; Deflator at .2%; and Core PCE at 2.0%.
Can trade from either side Thursday. Can buy the 117-21/25 area or sell failure to take out the OVN sessionâs high. And will be looking for a new move to emerge from the 117-30/118-00 level.
F2 Comments: Thursdayâs market was a typical auction day with prices back and forth into the 7Y auction. It was another good auction, but when prices failed to hold the buying spike made on the results announcement long liquidation/profit taking ensued with 117-21 touched before the close at 117-28.
The market can trade either way Friday, but will need follow through activity to hold that side in their positions. Some news to navigate tomorrow: Personal Income at .1%; Personal Spending at .2%; PCE Core at .1%; Michigan Sentiment at 64.8.
Can buy early weakness at 117-21/25. Or sell failure to take out 118-05.
The market can trade either way Friday, but will need follow through activity to hold that side in their positions. Some news to navigate tomorrow: Personal Income at .1%; Personal Spending at .2%; PCE Core at .1%; Michigan Sentiment at 64.8.
Can buy early weakness at 117-21/25. Or sell failure to take out 118-05.
Good and Bad News for Financials on Friday
F2 Comments: The early news was split on Friday. Headlines were con and revisions were pro for the financials. The financials held up well until it was clear that the ES wasnât going to break. The selling accelerated into the Noteâs close.
The Note is pointed lower on Tuesday. No news to drive the markets on Tuesday. The best support I can see for the Note is the 3 Y auction. If 116-24 holds as support and the sellers canât break the market by 1100 EDT, then the 3 Y auction should support prices and we could see a rally back to 117-12±.
Want to sell early strength and see if 116-24 can be broken. If not, will cover and begin to look to the long side of the market.
F2 Comments: The early news was split on Friday. Headlines were con and revisions were pro for the financials. The financials held up well until it was clear that the ES wasnât going to break. The selling accelerated into the Noteâs close.
The Note is pointed lower on Tuesday. No news to drive the markets on Tuesday. The best support I can see for the Note is the 3 Y auction. If 116-24 holds as support and the sellers canât break the market by 1100 EDT, then the 3 Y auction should support prices and we could see a rally back to 117-12±.
Want to sell early strength and see if 116-24 can be broken. If not, will cover and begin to look to the long side of the market.
Opening Comments for Tuesday 9/8
(06:44)_Fridayâs analysis called for a sale into strength. 117-11âs were doable over the holiday. Showing support below the buck.
All the news out over the weekend is negative for the financialsâcommodity prices, dollar woes, another call for a basket of currencies to replace the dollar, more puts purchased by large institutions.
Todayâs 3Y auction will be interesting. Want to sell into early strength and see if 116-24/25 can be broken. If not, the Dealers could rally the market into todayâs auction.
Aggressive sell is 117-03/07, followed by 117-10 OB. Cover, if 116-24/28 then holds.
(06:44)_Fridayâs analysis called for a sale into strength. 117-11âs were doable over the holiday. Showing support below the buck.
All the news out over the weekend is negative for the financialsâcommodity prices, dollar woes, another call for a basket of currencies to replace the dollar, more puts purchased by large institutions.
Todayâs 3Y auction will be interesting. Want to sell into early strength and see if 116-24/25 can be broken. If not, the Dealers could rally the market into todayâs auction.
Aggressive sell is 117-03/07, followed by 117-10 OB. Cover, if 116-24/28 then holds.
3 Year Auction Supports Financials on Tuesday[/b]
F2 Comments: The market traded both ways, several times today, supported by the 3Y auction, and pressured by the never ending borrowing needs of the current administration. By the dayâs close the pattern was a âbâ, which favors lower prices tomorrow.
No news to drive the early trading. If support does hold, would look for another trading range day. Biggest factor tomorrow will be the 10Y auction. The Dealers are already hedged via options.
Want to sell early strength and see if 116-20/24 can be broken. If not, will begin to look to the long side of the market. Preferred sell zone is 117-03/07. Back up sell is 117-11/15. Cover, if 116-20/24 then holds.
F2 Comments: The market traded both ways, several times today, supported by the 3Y auction, and pressured by the never ending borrowing needs of the current administration. By the dayâs close the pattern was a âbâ, which favors lower prices tomorrow.
No news to drive the early trading. If support does hold, would look for another trading range day. Biggest factor tomorrow will be the 10Y auction. The Dealers are already hedged via options.
Want to sell early strength and see if 116-20/24 can be broken. If not, will begin to look to the long side of the market. Preferred sell zone is 117-03/07. Back up sell is 117-11/15. Cover, if 116-20/24 then holds.