Thursday’s Setups…

The appearance of the completion of intraday (Elliot)
five-wave patterns down in today’s session in the above two contracts and the S&P
futures (SPZ1)
imply we will get a three-wave corrective pattern intraday (tomorrow) which
should provide opportunities to get short out of intraday pullback from lows
setups. If today’s cycles are honored, intraday pullback triggers in the S&Ps
may be had in the 1086.50 to 1087.50 area.

T-bonds (USZ1)
closed up into the gap left on Sept. 9. This implies a negation of the three-bar
island top formation left Sept. 3-5, although a close above 106 26/32 is
required to confirm. The rally in the long end reflects a flight-to-safety move,
seen due to the advance in the more inflation-prone T-bonds, but nearly scratch
advance (up just one tick) in the 10-year notes (TYZ1).
For a daytrade, consider establishing a long position in the 106 15/32 area.
While the trend is up, inflation and other factors (a move to a different safe
haven, government note offerings, etc.) could make for choppy trade. Be nimble
and look to play both sides. Here’s how. If the contract fails to hold above the
prior contract and 20-day high, notice that tomorrow T-bonds set up a potential
same-day Turtle Soup reversal, which triggers should the (USZ1)
fail to break and hold above 107 11/32.

Be safe: Use protective stops on every trade.