Open House Thursday Comments

Posted by: ccochran
5/28/2009 5:03 PM
Markets don’t go straight down. Today’s market paused and consolidated the two previous day’s heavy selling. It will be easy for the market to trade in either direction tomorrow. I see the market as a trading range tomorrow and can trade at support and resistance with indications that the buying/selling is drying up. The longer term trade is still a short.

F1 Comments: The longer term direction of the market is lower until the demand for more money from the government changes. Sell rallies.

F2 Comments: Buyers entered the market in the OVN session and supported the ZB at 116-00±. The 7Y Note auction was worse than the 5Y auction, but the Dealer community was newly short 163K over the last two days and covering shorts is an easy way to support prices in the cash markets. This buying was present into the close too. If the market can take out 117-20/24 and then hold that level, it can trade higher off of EOW/EOM profit taking. Some news to impact tomorrow’s trading: GDP is expected at -5.5%; Deflator at 2.9%, Chicago PMI at 42.0, Michigan Sentiment at 68.0. Can sell failure at 117-24/118-00. Or buy with signs of support at 116-12/20.

F4 Comments: Analysis was to be a seller one time and see if support could be broken. Recommended sell zone was 116-31/117-03. The trade worked briefly. The software did generate valid buy/sell signals as the market activity permitted.

Open House Sample Research

Posted By Charles Cochran – 5/27/2009 3:44pm

Another day of trading another big day down. The sellers own the market and Treasury auctions accelerate the selling. Much easier to raise money with higher interest rates. We are getting them these days. Last week’s article that the US might lose its AAA debt rating changed the market’s sentiment. The bears have had their way and look to continue to have their way without some change in the news. Sell rallies.

F1 Comments: The selling accelerated again today as the market moved lower through the LT Distribution. The market remains in a downtrend and will until the government quits borrowing or the recession news remerges in the headlines.

F2 Comments: The analysis was to sell 118-15/19. The day session high was 118-175. The market idled into the 5Y auction hitting 118-15 at auction time. The auction was sold and the market broke hitting 115-25 after the day session’s close. If we hit 115-18, the market will be 3 points below today’s auction. Sell rallies. Tomorrow’s news is likely to be ignored shortly after the 0830/1000 EDT news. The Dealers should try to support the auction sometime tomorrow. So while we want to get short for the first trade tomorrow and see if we can extend the range lower, if the market doesn’t break, we can trade form the long side. Given the crash after the day session’s close, the sell zone has moved lower. The sell band is 115-07/15 with a cover, if 115-25 holds.

F4 Comments: The analysis was to sell 118-15/19. Day session high was 118-175. The analysis and software worked as expected. Valid sell signals were generated throughout the day’s range