How Far Does 30yr Go?

Written By: Pauly @SPZ_Trader

ZB has enjoyed a fantastic recovery since finding support at 64’14  38% (45’25/75’29).   Certainly, Yellen’s “get out of jail” card got the ball rolling.   I would have thought the subsequent rally would have stalled at 168, but a funny think happen on the way to the palladium.  Deutsche bank which has taken on more body blows than a Donald Trump political rival has put a fire under the bid for Bunds as well as Bonds. 

Markets have a way of moving beyond expectations which takes us to how far can ZB go?  The attached 4h chart has a defined range 68’08 to 72’10.  My take is I see a move into the mid-zone 70’01/70’21. We have two fibonacci targets confluencing  69’30  78% (64’12/71’16) & 70’05  50%  (64’12/75’28).   The zone represents a supply area and would result in a six point rally from lows set on September 21.  From here I would expect a move towards 66’25.

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It’s All About the Reaction

Written by:  Anthony Crudele

Today we focused on trading Crude Oil because based on our strategy, CL had the cleanest look for trade opportunities. I’ve said many times before that we don’t live and die by our Beacon levels. We know that there is no holy grail and the key is to know what markets to trade on our Beacon strategy on any given day. This goes for any strategy that you’re using.

If you use Fibonacci levels, do you trade off of every level? Of course not. You pick and choose when you’ll trade a Fib and when you wont. Same goes for us. The key for us when trading Beacon is to see how the market has responded to our levels.

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EUR/USD on the Precipice of a Downside Move – Pauly @SPZ_Trader

1 wed.

Written By: Pauly (Twitter: @SPZ_Trader)

Today, is FOMC (Federal Open Market Committee) day where the expected decision is a “Hold” (no rate hike).  The economy is not blazing ahead, but certainly one can make the case that a second rate hike since last December is warranted.  Job growth of the last three months 287k, 255k, & 151k provides a three-month average of 231k.  The issue has been wage gain growth which has encountered a tough time gaining traction. Thus a “hold” seems in the cards.

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Go Where The Rotations Are

As someone who spent the first decade of my trading focusing only on one product (the ES), I know how hard it can be to trade multiple markets. I believe that the time that I started trading in the late 90’s it was a lot easier to trade one market opposed to today. Today the HFT’s & Algos are so efficient. They take a lot of the slippage out of the markets.

What I mean by slippage is that we don’t rotate as much. We see a lot of one way moves, and in my opinion it’s because the machines keep us one way. I can spend hours talking about why I believe this, but that’s not what I want to focus on today.

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Beginning of a Larger Move, or Already Overdone – Bonds ZB

Written By:  Pauly @SPZ_Trader

Friday’s continued sell-off in the bond market caught the attention of all traders no matter your trading vehicle of choice.  Yes, Virginia the bond market’s tentacles are quite lengthy.

The sell-off started about a week ago with the disappointing action following a weaker that expected Non-Farm payroll report (151k, coupled with .1 wage-gain growth).  The bonds spent the early part of this past week retracing NFP Friday losses, and briefly eclipsed those highs perhaps in anticipation of a little more juice (Quantitative Easing) from Mssr Draghi at Thursday’s European Central Bank meeting.  Well, Draghi did not provide what the market had hoped for; at the very least extension of QE beyond March 2017. Most realize the ECB is handcuffed when it comes to available assets to purchase, so the market was counting on a definitive extension of the program. Bunds felt the impact and summarily Bonds too.

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Why Technical Traders Need to Understand Fundamentals

  

Today we had a bearish technical look in both Yen and Gold. Does that mean that we immediately step in and short it? The answer is no. We watch the action and understand the theme of the day. We had a couple of themes to watch for in both of these markets. The first theme was that the Yen has been moving well in opposite correlation of the Dollar, so we watched the Dollar to see if it was holding our support (which would indicate possible weakness in the Yen).

Gold hit our top level of resistance at 1340 and had MACD divergence on the highs. Therefore we had multiple technical reasons to short Gold, but we wanted to see how the market responded on our short term charts for confirmation.

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