10YR T-NOTE Futures - BULL TREND EXTREME

** BULL TREND EXTREME **- Technically the MKT is at the positive extreme and is flirting with an exhaustive turn. Keep your dancing shoes on this Technical State has the potential to get a little wild.

Key off the 120-06 Inflection Pivot today for an indication of the session tone. All trading below here keeps the contract vulnerable to a retreat.

On the SELL side accept REVERSAL strategies off 120-25 and 121-215 resistance levels should work on the initial break in momentum if they are going to. BREAKOUT strategies below 119-19 are aggressive but do have the potential to be the start of a corrective turn, so look to get in early on the initial break in structure. Lock in any unrealized profit on these strategies, as the underlying momentum remains positive. 118-13 and 117-15 are the lower targets.

- On the BUY side accept FADE signals off the 119-00 and 118-13 major support levels after the 2nd or 3rd confirmation. The MKT is extended and may need to digest a bit before it produces a positive push. REVERSAL strategies are valid off all major support inflection points as well as the 119-19 support pivot, with the expectation that the underlying positive tone will try to assert itself. The outlook after a REVERSAL signal will be more firm digestive than positive trend. BREAKOUT strategies above 120-06 and 120-25 should just go, so keep stops and position management tight. If not the likelihood of a sideways trade developing is high.

Note: The MKT is extended and any push to new move highs is not expected to be sustained. Emotional trading conditions are expected.

JS

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10YR T-NOTE - SPIN CYCLE

Technically the MKT is in a DIGESTIVE BULL TREND with a slight negative tone. The MKT is searching for support so wait for a positive signal instead of trying to create one.

Key off the 117-085 Inflection Pivot today as this is the expected low point for any new weakness if the MKT is going to end the session in positive territory.

On the SELL side FADE and REVERSAL signals off the 117-295 resistance level are valid. The MKT has a soft tone and is expected to probe lower as long as the intra-day structure is negative. Keep position management and profit targets aggressive, as these trades are counter trend. SELL BREAKOUT strategies below 117-085 are more aggressive, as follow through to the downside is not expected at this time.

On the BUY side accept REVERSAL strategies off the 117-085 and 116-300 support levels with the expectation that any signal has the potential to be the beginning of the next leg higher. BUY FADE strategies off 117-085 will need confirmation before they should be accepted. In addition any test may need to build a base before it can mount a sustained positive push, so expect a laborious trade. BREAKOUT strategies above 117-19 and the 117-295 resistance pivot are valid however the digestive trade will make FADE strategies off support on a "pullback" after a BREAKOUT signal a better opportunity.

Note: The MKT has any underlying positive tone but may probe lower to define its digestive range.



JS


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10YR T-NOTE - Positive Signal needs confirmation

Technically the MKT is in a DIGESTIVE BULL TREND and is flirting with a shift into a more aggressive positive position with all trading above the 117-000 Inflection Pivot. Look for excuses to get long above here but respect the digestive nature and avoid pressing any position.

On the SELL side avoid FADE strategies against 117-150 and 117-225 and use a REVERSAL instead. The MKT is excited but has yet to confirm any new advance. Expectations are that any false positive breakout signal will be met with a sharp negative reaction. BREAKOUT strategies below 117-000 are a lower probability but are valid and in line with a reversal scenario. If the MKT has already produced a false positive signal and is holding negative reversal structure, this strategy has potential. Expectations are that any negative BREAKOUT should just go and with the MKT staying under pressure into the close and expanding the digestive range. Anticipate a positive turn and consider reversing off lower support structure.

On the BUY side accept FADE, BREAKOUT and REVERSAL strategies. BREAKOUT strategies above 117-150 have the potential to run. If so, they will just "go" and not look back. Any stop and go action and any profits should be realized as it is more likely the MKT will be setting up a re-test of support to FADE before it can extend higher. FADE and REVERSAL strategies should work off 117-000 and only provide one opportunity. Repeated tests or base building and it is more likely the MKT is going to search for its lower digestive extreme rather than resume a positive course.

Note: The MKT has produced a positive signal but is not confirmed. Be ready for it but if it does not materialize, beware of a negative reaction. Don't get caught fading a break that continues to hold structure as the MKT may be defining its lower digestive extreme and will most likely find it after it hits your last sell stop.


JS

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10yr T-NOTES H'10 - POSITIVE SHIFT

The underlying technical sentiment has shifted positive without the support off any price appreciation. Head fake in front of the figure or foreshadowing of things to come.

Currently the market is in a DIGESTIVE BULL TREND.

For now the positive sentiment maintains the bias above the 117-005 Inflection Pivot with 117-175 the lid for the current digestive trade. This is the trigger for any shift into a Bull Trend mode targeting 118-035 and 118-305. A failure from 117-005 negates this technical state and shifts sentiment targeting 116-11.

Note: The MKT has produced a positive signal but is not confirmed. Be ready for it but if it does not materialize, beware of a negative reaction. Don't get caught fading a break that continues to hold structure as the MKT may be defining its lower digestive extreme and will most likely find it after it hits your last sell stop.

JS

This post supports the Strategy Based Trading, which is a methodology that focuses on the applied strategy verses a specific market. The approach looks to align strategies with markets whose current technical behavior matches the strategies criteria. Please review the following CME sponsored tutorial for a complete overview of this approach.

STRATEGY BASED TRADING Review http://progressive.powerstream.net/008/00102/edu/interactive/js_services/strategy_based_trading/index.html

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Risk Management Overlay Example - Recap 10/2/2009

Risk Management is what it is all about in trading the futures markets. Putting structure to random price action is what JS Services Price Map does. Below is a recap of Friday October 2nd action from Thursday's Blog post and the Price Map performance.

RECAP - October 2, 2009


INTEREST RATES

The world is ready for a little fireworks today as we kick off volatility month. Watch the Interest Rates today for confirmation of an event. The 30yr T-Bond basis Dec'09 has a major resistance inflection pivot at 123-23 and the Dec'09 10yr T-Note resistance pivot is at120-070. If the long end of the curve is going to stall out they each will show signs of strain here. A sustained breach of resistance in both contracts have the potential to launch and put the rest of the world on its head.

US 30YR T-BOND Z'09





* Notice how the 30yr reacted off the 123-23 resistance pivot defining the day for the MKT. This signal provided a clue that it was going to be business as usual for the rest of the world.

US 10YR T-NOTE Z'09





* The 10yr was unable to attain its major resistance and stalled out at a minor level but in confluence with the 30yr. Later in the session the 10yr action off the DIR [Directional level] provided a clue that the 30yr was vulnerable to further losses.





EQUITIES
In the Equities the Dec'09 SP500 can slip as low as 1011.50 without doing much damage to the MKTs underlying confidence. A held failure here and tings can get emotional with 994 and 977 targeted. A rise above the 1036.50 session Inflection Pivot will make yesterday's weakness look like a head fake and if the Interest Rates have rejected hard from their resistance it will be back to bidness as usual targeting 1063.

SP500 INDEX Z'09





* The 1011.50 level proved to be the key support inflection point for the Index. The negative reaction in the 30yr providing confidence that the MKT was due for a positive reaction off this level.






CURRENCY
The Dec'09 EUROFX is set for a big range day and remains in a corrective trade below the 14667 Inflection Pivot. A break under 14499 and yesterday's negative momentum has the potential to accelerate with 14415 and 14247 the lower targets. A rise above 14667 and the buyers will look to take back lost ground in a hurry, putting the recent highs at 14844 in jeopardy.



EUROFX Z'09






* Notice how the EUROFX provided a REVERSAL signal off the 14499 support pivot. The negative reaction in the 30yr providing confidence that no event was in play and a reaction up to the 14667 Inflection Pivot should be expected.



GOLD
Dec'09 GOLD is in a NEUTRAL CORRECTIVE posture with 1005.8 the session Inflection Pivot. Draw a line here. Below this price the yellow metal is vulnerable to a drop down to 985.8-983.7 with the potential to go a low as 970.8. 933.3 is the current lower extreme. A rise above 1005.8 and the buyers will try to flex. If the interest is going to fizzle it will against 1015.8. A violation here and we could be in for the big one to the upside with 1033.9 and 1065.2 the initial targets.


GOLD Z'09



* As expected GOLD made a play for the 985.8 support level, however the negative REVERSAL in the 30yr cut the move short signaling a re-test of the 1005.8 Inflection Pivot. MKTs like to gravitate to their key pivotal areas when they are indecisive on what to do next.

ENERGY

Nov'09 NAT GAS is flirting with disaster. Key off the 4.553 Inflection Pivot for an indication for he session tone. Below here yesterday's BEAR TREND ACCELERATION signal keeps the controls with a failure from 4.388 confirming the signal targeting 4.035 on any negative follow through. A rise above 4.553 delays the inevitable for a difficult trade up to 4.716. If the aggressive sellers are going to return they will enter here. If not a positive shift into neutral is the outlook with 5.030 the upper digestive extreme.

NAT GAS X'09

* The NAT GAS MKT tried to press it to the downside but could not hold under the 4.388 support, producing a reaction back up to the 4.553 Inflection Pivot. As a confirmation to the positive REVERSAL signal the contract rotated up to the top of its expected digestive range at 4.716.

Having a RISK MANAGEMENT OVERLAY provides structure. Understanding structure allows you to anticipate opportunity not react to it. This is the difference between marginal and great success. Get the edge.

JS

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US 10YR T-NOTE Z'09 - RESILIENT

-The Dec'09 10YR T-NOTE bounced back on its feet and will keep a higher hope above the 117-105 Inflection Pivot. Keep your dancing shoes on. This roll is shaping up to be messy and more of the same is expected. A held breach of 118-02 is needed to confirm yesterday's positive signal putting the 119-10 and 119-185 targets in play.

A rebuke from the 118-02 and sentiment can quickly turn. Think big. A break under 117-105 is needed to negate the positive signal targeting 116-195 for any negative turn of events. Be patient. No follow through is expected. 115-115 is the extended target for any reversal from the current levels.

JS

This post supports JS Services Strategy Based Trading approach. For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.The Inflection Pivot levels are available as a chart overlay on the following platforms; Ninja trader, Strategy Runner and eSignal. Sign up for a Complimentary Trial.

10YR T-NOTE Inflection Pivot

Is that it for the rise in the 10yr T-Note.

Could be.

122-020 is the Inflection Pivot to key off.

If the MKT is below here it is vulnerable to a beating, with the 120-25-120-23 the support band that must be taken out to confirm a press to new move lows.

Above 122-02 the difficult corrective trade continues.

If this signal is going to work it will play its hand today or tomorrow.

JS