Bonds Still Constructive
Each evening we focus
on the most interesting aspects for the upcoming trading
day. The comments are based on observations of the nightly
updates of the Futures and Market Bias pages. They are
provided for educational purposes only and are not intended
to be direct trading advice. Also, keep in mind that these
remarks are made up to 12 hours in advance of the markets
opening. Therefore, overnight events may alter the outcome
of these observations.
At
the time this is being published, the S&P Globex futures
are trading 2 points higher and the bond market is trading
down 2 ticks.
There’s not too
much to look at tonight (Thursday). Bonds still look
constructive, but a bad PPI number on Friday could change
all that. The dollar appears to have stabilized, as it
bounced off of prior support; but one day does not a trend
make. Cocoa popped today, but looks like it will run into
resistance soon. The Nasdaq and S&P futures failed to
rally on Thursday, but still may have hope, if they can take
out the tops of their recent ranges.
The June Canadian
dollar
(
CDM0 |
Quote |
Chart |
News |
PowerRating) is in its first pullback since rallying
off of major lows. Look for a buying opportunity here.
width=”470″ height=”320″>
June lean hogs
(
LHM0 |
Quote |
Chart |
News |
PowerRating) gapped higher and rallied above their recent
trading range, but reversed to close poorly. This suggests
that their downtrend remains intact. Look for a shorting
opportunity here.
Volatility
Watch
As you know,
historical volatility is measured on a closing basis only.
With that said, September bonds
(
USU0 |
Quote |
Chart |
News |
PowerRating) haven’t really
moved much on a closing basis as of late. Therefore,
they are now on the
Explosions: Low 6/100 Readings List. Watch for a
larger-than-normal move (in either direction), as volatility
reverts to its mean. Of course, the low volatility shouldn’t
come as a surprise, as the market normally settles down
right before a big number is released.
Best of luck with
your trading on Friday!
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!