If you've been following this thread you'll note that I've mentioned Pivots a few times. I started taking a closer look at Pivots after reading all of Jimmy Jam's thread on his S&P system, as well as jre's thread. Personally I prefer my own price projection numbers, but there is definitely some interesting activity around the Pivot's that must be taken into account when deciding to take partial profits etc. I promised some observations on Tuesday's activity. I wanted to write at length later, but I'd better put pen to paper now. Looking at Tuesday's chart, if you've been following this journal, you should have had very little trouble taking the short trades during the first part of the morning. The problem arises later around 1205 CST. First, look at Lance's post a few pages back on page 73. Next consider the following. The 10 year auction was in the process of going off and was being well received. The day was Tuesday. Not much in the way of reports, and we still have a lot of anticipation building up for Thursday's reports and especially Friday's CPI. Take a look back at January through August's price action on a "no news" to "minimal news" day prior to a big report later in the week. Take a look at S/R from the day and week before. All of the items in the above paragraph pointed to a possible run for the day's highs. The break through the upper end of the rectangle was your signal that a change had occured. Time to go long. Finally, let's take a look at the importance of a stop on that trade where I was short 2 ZB's since Friday at 110 23. We got as low as 110 01, but I didn't exit because of my previously mentioned bias. It was getting late in the evening for me. I couldn't stay up. I put my stops in per my reply to Lance a few pages back and went to bed. Imagine my surprise in the morning when I woke up to find all of my positions were closed, with my profit intact, although smaller than I had hoped for. Imagine my surprise when I saw the market actually spiked higher past my entry on Friday. Now, for a moment, let's consider an alternate history scenario. Imagine I hadn't placed any stops because I was so confident in my new found ability to call positional trades lasting days in the bond market. Now imagine my surprise when I see that not only have I lost roughly 16 potential ticks per contract on the ZB trade, but that small short trade in the ZN's is there too! Not a pretty picture is it? So, back to reality. Was I upset that I hadn't taken my ZB profit at 110 01 to 110 04. Sure, an extra 8 to 16 ticks total profit on that trade would really have been nice. Did I expect the stop to be hit? Absolutely not. How to know where to place the stop? Look at the rectangle of price action. 110 08 or 110 09 was the most likely place. When you are struggling with deciding on whether to place a stop, simply pull up a saved chart of Tuesday 12 September in the 30 year bond market. There is your answer.
0726 CST Jobless Claims and Retail Sales out at 0730 CST. Be prepared. Today is the one of two days we've been waiting for. Price Projection numbers: 111 24 110 12 More info to come later. I need to set up my trades.
0737 CST Sold 2 ZB 110 26 on a probe trade to yesterdays lows. Tight stop. Late entry. UPDATE 0743 Trying to sell 4 ZN's 107 070. UPDATE 0744 Sold 4 ZN's 107 070. Stopping for now. I may add to the ZB position if we get up to 110 31 or so. UPDATE 0747 Trying to sell 2 ZB's 110 29. UPDATE 0749 No fill on above. Sold 2 ZB's 110 27.
Order to SELL 800 at 110-29, no fill ( should not go above 111-00) if it does it would be more than 50% retracement to a magnitude 9 ticks ( 3 min chart) DOWN MOVE.
Whatch that 110-21 like a hawk if it does not reach it, start thinking about getting the hell out because it is not going to do it after 12 noon.
I'm short the equivalent of 8 ZB's. Standing down for now. Need to watch for a kiss and then a break of the lows. UDPATE 0758 CST Looking for a break of 107 040 in the ZN's and 110 21 in the ZB's.