Low Volatility In Bonds
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.
face=”Arial, Helvetica”>Join me, fellow TradingMarkets.com
content providers, and other traders and money managers at
the Trading Markets 2000 conference at the Venetian Hotel
Resort and Casino in Las Vegas on October 13-15, 2000.
face=”Arial, Helvetica”>At the time this is being published,
the Globex S&P futures are trading 1.50 points higher
and the bond market is trading up 2 ticks.
The energies,
September unleaded gas
(
HUU0 |
Quote |
Chart |
News |
PowerRating), September heating oil
(
HOU0 |
Quote |
Chart |
News |
PowerRating), September crude oil
(
CLU0 |
Quote |
Chart |
News |
PowerRating), and September
natural gas
(
NGU0 |
Quote |
Chart |
News |
PowerRating), all mentioned recently, still look
vulnerable. Continue to look for shorting opportunities
here.
December corn
(
CZ0 |
Quote |
Chart |
News |
PowerRating) gapped to life-of-contract lows but reversed to
close well. This may have drawn in the last of the
trend/breakout players. Look for a buying 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
moved much on a closing basis (a) over the past seven
trading days. This creates a low-volatility situation (b).
Watch for a large move (in either direction) as volatility
reverts to its mean.
Best of luck with
your trading on Tuesday!
width=”470″ height=”320″>
face=”Arial, Helvetica”>Dave Landry
P.S. Reminder:
Protective stops on every trade!