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

4/29/2009 4:11 PM

The market held in the OVN session and did trade back to the preceding day’s auction price minus a tick. Resistance held and the market drifted lower into the auction. It was an OK auction. The Bonds sold, but most likely are still in street hands. The FOMC announcement broke the financials and the financials close lower. The market is pointed lower tomorrow too. If the selling doesn’t get started early, then light short covering is what I would expect.

F1 Comments: The market continues its move lower propelled by new supply and the FOMC announcement. The attractor remains 115/117 and we are close to that level.


F2 Comments: The market opened and did manage a rally almost to Tuesday’s auction prices. Resistance held and the market began to drift lower. The auction was weak. The market was stuck in a range w/sellers above 124-00. Then the FOMC spoke and said there were signs of economic bottoming in some sectors. Recovering economy, no more recession/depression, sell bonds. And this is what happened, IMO. Some news tomorrow, but not of the market changing kind: Jobless Claims is expected at -640K, Personal Income at -2%; Personal Spending at -.1%; Employment Cost Index at .5%; and Chicago PMI at 34.0. Want to sell early strength and see if 122-08/12 can be taken out. If support holds, will cover.

F4 Comments: Analysis favored a sell. Market did find sellers just above our 3^rd projected resistance level. The software generated valid sell signals at the levels allowed by the market.

Tuesday Comments by Charles

4/28/2009 3:39 PM

The market traded according to our assessment. It did rally into our recommended sell zone, 125-19/23. The day session high was 125-23. The rest of the day was a sale, a trend day, with 3 distributions lower by day’s end. The close was weak. The market is pointed lower and we could say this with more confidence, if it weren’t for the 7 Y auction. The auctions complicates the trading. Normal news events, relationships between markets don’t always apply. While the market si pointed lower, if the Dealer community decides to cover their shorts to support the market, the market will trade higher for the short term. Want to sell early strength and see if today’s lows or the OVN session low can be taken out. If not, will begin to look to the long side of the market.

F1 Comments: The market traded lower today and close weak. It is pointed lower tomorrow. And it needs to trade lower to hold today’s shorts in their positions.

F2 Comments: The market traded higher off the day session opening from the weakness in the ES. The Bond rallied to 125-23, into our recommended sell zone at 125-19/23, and then reversed to sell for the rest of the day. The market closed weak. The market activity analysis favors selling early strength. If 123-00 or the OVN low isn’t taken out, will cover and about getting long. The 7Y auction could bring in buying as the Dealers support this auction. Tomorrow’s new: Adv GDP is expected at -49%; Deflator at 1.7%: API inventories; FOMC announcement. First sell band is 124-03/07. Back up sell is 124-11/15. Cover, if 123-16 of the OVN low holds.

F4 Comments: The analysis was to sell 125-19/23. Day session high was 125-23. The software generated valid sell signals throughout the session.

Market Report By Charles Cochran

4/27/2009 3:27 PM

The analysis coming into today was to sell the 125-00/12 area to retest 124-12/16. The market hit 125-04 and 124-00 in today’s day session. The 2Y auction was a good one and the market recovered from 124-07 to close around 125-00. Tomorrow’s 5Y auction should be the dynamic that controls the market’s action. Basically see a trading range market w/a seller above 125-00 and a buyer below 124-08 and plan on trading this range.

F1 Comments: The market is in a longer term down trend. A new move lower may have started on B. We are at support. This week’s auctions may slow the recent selling too.

F2 Comments: The market showed a trading range today. I think that the market will probe higher, but find sellers above 125-00. This selling should take the market back to 124-08/16. Short term the market needs volume from 124-08 to 124-28. If the market does continue its rally from the 2Y auction at noon today, then the selling should emerge again in the 125-20 area. Some news tomorrow: consumer confidence is expected at 28.8 and Shiller Case Index at -18.5. The 5Y auction at noon CDT, should be the market’s focus. Usually the Dealers run a good auction/bad auction strategy. I am guessing that the 5Y auction will be the bad auction. If not, the market will continues its rally tomorrow off the day session’s opening. Can sell failure at 125-00/04 or 125-20. Or buy w/signs of support at 124-08 OB.

F4 Comments: The analysis favored a sale. The market made it to 125-04 before the sellers entered the activity. This selling was present until the 2Y auction took place. 124-00 held, the 2Y auction was deemed a good auction and the market rallied to close at 125-00+/-. The software generated valid buy/sell signals as the market activity allowed.

ES Monday Morning

The low volume point 785.50 is acting as support. Volume is building in the high 780's on the bounce off the low. There are indications that the Market's pivot point is the high volume at 794.00.

Support below this is at 755.50. If the market moves to the 783 area, sell a low volume rally at 785.50. Support becomes resistance.

Open House

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