Treasuries Are Set Up Here
Cross Market
Analysis
Summary:
30
year Treasury: Bearish Gartley complete…short setup in play
Nasdaq
E-Mini: Symmetrical Pullback into Fib price support (and Triple Crown
Zone) long setup in play.
Bonds
and Stocks are once again dancing. One flexes as the other gives. One
leans forward, one bends backwards. Oh the dance! Oh the beautiful dance! For a
while equities and bonds were out of sync and stepping all over each other.
However, it appears the two have settled their discrepancies with one another
and are in harmonious union! (Did I really just say “harmonious union�)
Let’s drill into each of these
setups:
First, below take a peek at US
30 Year Treasury (USZ3). Highlighted in blue is a textbook Bearish Gartley
pattern. Today price hit the .786 retracement to complete this pattern and left
a shadow/tail above to close around 110`21. The last 4 days have been a rout,
but this set up tells me “buyer bewareâ€.
In fact, I’d consider shorting
below Monday’s low with a stop above Monday’s high with a first objective of 107
½ to 108 ½. Also, to take this a step further…if USZ3 trades below 107`00 it
looks like an Air Pocket situation where price falls quickly to the 103 to 104 ½
range. That is the bearish scenario. Every bearish pattern has a “broken
scenarioâ€.
The broken scenario here is if
USZ3 trades above 111`17. In that case, we see more upside momentum, as strong
or stronger than what we’ve seen over the last few sessions. Hitting the upside
Air Pocket leaves this contract with a high likelihood to hit 114`10. In that
case it would complete a larger AB=CD pattern (highlighted in red). So wait a
minute, Hobbs. You’re not telling me what direction bonds are going??? You’re
right! I just gave you a battle plan for multiple scenarios. Now we let the
market speak and react appropriately.
Finally, check out the daily
chart of Nasdaq E-Mini (NQZ3). The last 4 declines since August have been right
around 100 pts. As of today we are at 81 point decline hitting a large Fibonacci
price support zone that includes a Triple Crown support zone as well as 4
symmetry levels acting as support. The support zone runs from 1356.50-1389.90.
As you can see the Bond/Equity
Dance…bonds fall and stocks rally. Am I saying this is a long term
setup…nope…just a good trade opportunity.
Oh, I’m excited to
announce….Coming in June 2004: Baby Hobbs #3! Woo hoo! I’m gonna be a daddy
again!
For you long term TM folks you
might remember: Hobbs #1 born Spring 2000 (Top of Market). Hobbs #2 born Fall
2002 (Bottom of Market)….and Hobbs #3 coming Spring/Summer 2004 (Market Top????)
Did I mention I was born at a Market bottom? You can’t ignore the power of the
Birth of a Hobbs!
Good night all!