Thursday, September 9, 2010
US 30YR T-BOND Futures - HOLD OR FOLD
Technically the MKT is at a NEUTRAL NEGATIVE EXTREME and is ready to either pop back into a firm neutral posture or break into a new down trend. The MKT has produced a technical sell signal into support and is in a "Hold or Fold" scenario. Volatility as well is on the fence and ready to rise with a new trend move and decline with some sideways "positioning".
130-12 is the base supporting the MKT from a negative shift. Don't fight weakness below here as emotions are expected to enter the equation. The 132-23 Inflection Pivot is the high point for any positive reaction today if the negative sentiment is going to weigh on the contract. Fade moves into this resistance until proven otherwise.
On the SELL side accept FADE and BREAKOUT strategies expecting an immediate follow through to the MKT's technical sell signal. BREAKOUT strategies should be worked with the expectation that any sustained trade and repeated tests of support will give way to negative follow through. This strategy is vulnerable to the MKT expanding its lower support band in a series of starts and stops. Keep profit targets extended to pay for any monies spent holding a position. FADE strategies should expect an immediate reaction as any held trade or violation of major resistance foreshadows a potential turning point. These are good opportunities to "roll" into a long position when stopped out.
On the BUY side FADE and REVERSAL strategies off major support base are qualified however the FADE is a lower probability and should use tight risk criteria. REVERSALs can risk more but should also go for more profit with the expectation of a turning point "key reversal" signal to play out. BREAKOUT strategies are aggressive and should just "go" and not look back. Risk less and go for more. A laborious lack-luster rise after a positive breakout is a sign that the MKT is more likely expanding its resistance lid for a new consolidation verses transition from negative to positive technical posture.
Note: The MKT has produced a negative signal but it is not confirmed and trending indicators do not support follow through in either direction at this time. The MKT has the potential for big range conditions so don't get stuck FADing momentum in either direction.
JS
* ENTRY STRATEGY - 5min web video explaining FADE, BREAKOUT and REVERSAL strategies http://www.jsservices.com/education/sbt/CME_EntryStrategies5min.wmv .
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