DJZ9, Maybe Short
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 1.90 points lower and the Bond Market Futures are trading up 1 tick.
The December Dow Jones futures [DJZ9>DJZ9], on the Pullbacks off Lows List, closed poorly and looks poised to resume its downtrend, especially in light of three indicators pointing lower on the Market Bias Page. Look for a shorting opportunity here.
December Bonds [USZ9>USZ9], on the Turtle Soup Plus One Buy List, gapped open (a) to new life of contract lows but reversed to close well (b). This may have the shorts trapped on the wrong side of market. Also of interest is the fact that bonds are also on the Volatility Explosions — Low 6/100 List (remember, historical volatility is based on closing price only). This suggests that a larger-than-normal move is likely to occur as volatility reverts to its mean. Look for a buying opportunity here but don’t “marry†the position as bonds remain in a longer term downtrend.
Volatility Watch
December Corn [CZ9>CZ9] is on all three Volatility Explosion Lists. Watch for a larger-than-normal move (in either direction) as volatility reverts to its mean.
BTW, you still have until 11 PM EST tonight to sign up for the World Series contest. Winning prize: $1,000. Go to www.tradehardnews.com and click on the World Series icon to sign up.
Best of luck with your trading on Tuesday!
Dave Landry
PS-Reminder: Protective stops on every trade!