• Home
  • /
  • Blog
  • /
  • Logical Signals Update: 10-Year Note & 30- Year Bond Update

Logical Signals Update: 10-Year Note & 30- Year Bond Update

10-Year Note & 30-Year Bond Update, U.S. Dollar Caught between Rock and Hard Place

Treasuries were looking to hang the early rally attempts on Tuesday, albeit small attempts, on a positive result from the Consumer Confidence Index, which was released.  The index fell in July from a five year high and the drop of 2.2 % was credited to consumers concern over higher borrowing costs and gasoline prices. 

 

The treasury markets as viewed from the 10-year note and 30-year bond didn’t give much of a reaction either way, which leaves current expectations in place.  Wednesday’s trade may be dependent on the release of the FED Notes, although I’ve not heard any talk that something different is to be expected. 

 

10-Year Note

Tuesday’s narrow range did little to alter current parameters with the September future closing right at 126’15 support/resistance.  Near-term I can’t rule out just yet the possibility for another attempt at reaching 127 to 127’05 if a trip to support at 123’30 to 123’11 is in the wings waiting to begin.  The pattern in progress is not totally clear as to near term direction.  Unfortunately the non-committal to direction by the market continues to allow both a rally and decline in the near term potential column.  A break above 127’11 should clear the path for a quick push to 127’23 to 128’30.  A break below 126 should clear the way for a downside continuation to the support zone at 123’30 to 123’11.  Longer-term expectations remain for larger down leg to push towards support at 121’12.

10-Year Note (September future Weekly) click to enlarge

 10_YEAR_NOTE_WEEKLY_JULY_30_2013-07-30-TOS_CHARTS

30 – Year Bond

The 30 – year bond is loosing its appeal as the treasury instrument of choice to trade.  With the focus shrinking in terms of duration the 10-year note has taken over as the interest rate barometer.  Nonetheless, the trading range on the 30-year was also very small on Tuesday as any rally attempts were squelched by the lower Consumer Confidence Index numbers.  The 135 level held things thus far and may continue to do so.  Near-term don’t rule out a run for the brass ring at 136’28 resistance.  First though, resistance at 135’16 to 135’27 needs to be dealt with.  As with the 10-year note longer term expectations remain for a drop to support at 129 to occur before a more defined sustainable rally takes over. 

 

30-year bond (September future Weekly) click chart to enlarge

30_YEAR_WEEKLY_JULY_30_2013-07-30-TOS_CHARTS

I am continuing to include the graph of the Federal Reserve’s outright holdings. This chart needs no additional explanation and is included to keep in perspective who has the motivation to keep it all going.

FedHOldings

 

U.S. Dollar/Euro

The near term direction of the U.S Dollar/ Euro has also been held within a somewhat tighter range so far this week.  After quickly touching the 1.33 level on Tuesday morning, the rally lost steam for the better part of the day regaining some buying steam towards the end of U.S. trade.  The 1.3305 to 1.3317 area should continue to hold rally attempts before the Dollar resumes its rally potential.  The Euro would be expected to drop back to support at the 1.2750 to 1.2675 area.  The stochastic oscillator on a daily basis turned lower giving a sell signal on Tuesday from overbought readings.  Longer-term expectations include the strong potential for a stronger more sustained rally favoring the Euro reaching up towards 1.38 to 1.40.  This outlook bodes well if the wedge/triangle pattern proves correct as drawn on the weekly chart.

 

The Euro September future has been consistent in producing larger ranges over the past several weeks and remains high on my list for day trading.  There are several contracts to choose from – the “full” future is valued at $12.50 per tick and the margin requirement is $3750.00 per contract.  The “mini” future is $6.25 per tick with a margin requirement of $1875.00 per contract.  The “micro” future is $1.25 per tick and the margin requirement is $375.00 per contract.  So, this product neatly meets capital requirements for small, medium and large trading accounts. 

 

Euro FX (Daily September future) click chart to enlarge

EURO_DAILY_FIBO_JULY_30_2013-07-30-TOS_CHARTS

 

Euro FX (Weekly September future) click chart to enlarge

EURO_WEEKLY_TRIANGLE CHANNEL_JULY_30_2013-07-30-TOS_CHARTS

 

 

Indicator Warehouse

 

Indicator Warehouse has in my opinion the best platforms available covering a wide range of traders from novice to expert.

 

The Diversified Trading System from Indicator Warehouse offers cost effective products that allow a trader to enter into the “chaos” and trade more effectively.  

 

Trade Manager from Indicator Warehouse automatically calculates the correct amount of contracts or shares based on your account size or market volatility.  Automated stop-loss management and position sizing eliminates most of the problems most individual traders have.  Day trading and position trading both require (actually demand) good risk management.  Trade Manager does the job across the board and is an essential trading tool that ensures that you take the maximum profit from all your trades. 

 

A newer member of the money management tools available from Indicator Warehouse is the Profit Finder – System Back Tester When implemented it allows the user to:

  • Immediately know the impact of parameter changes.  
  • Automatically reads all of your DTS entries and exits
  • Calculates the profit/loss of each trade
  • Performs a wide number of essential intelligence boosting calculations instantly
  • Provides solid details about the effectiveness of your trading strategy/ methodology/ indicators

 

The last two points above are valuable tools to use.  It will show you where some “tweaking” is needed to improve results through the back testing feature. 

 

My point on money rotation and sector rotation is similar to that on parabolic moves that they happen with frequency within many time frames.  As traders these types of moves can be a bonus for day trading or position trading so again don’t get caught up in the “what’s the catch.”    Realizing a rotation is occurring within a stock you trade or a sector is a great source of stocks to plug into the Diversified Trading System.  Allowing DTS to cleanly and beautifully capture the moves though any or all three DTS trading platforms.  Our goal remains to assist traders to make greater profits during all types of markets.  Sector and money rotation is another tool.

 

The Diversified Trading System used together with Trade Manager should continue to produce numerous trading signals in the DJIA, YM (mini), S&P 500, ES (mini), RUT, TF (Russell 2000 mini), AAPL, AMZN, GOOG, NFLX, and LNKD, GS, and Tesla Motors (TSLA).    In the near future I will be adding options strategies to the trading list. 

 

Here is an updated (7/29/2013) list of the markets where I have found that DTS (all three birds) are producing numerous signals.  Continue to bear in mind that there are days when trading opportunities are not as plentiful.  These are days when not trading is likely more profitable than attempting to “force” a trade”:

 

  • DJIA future (e-mini available) – highly recommended for experienced traders
  • S&P-500 future (e-mini available) – highly recommended large intraday moves.
  • Russell 2000 future (e-mini available) – highly recommended can lead in either direction.
  • NASDAQ 100 future (e-mini available) very highly recommended and dominated by AAPL, AMZN, NFLX, GOOG, and TSLA
  • US$/Euro futures (e-mini and micro available) – very highly recommended – easy to trade afterhours as well.
  • GS (Goldman Sachs) – good two way volume –
  • AAPL (Apple Computer) – highly recommended – Options trading as well
  • GOOG (Google) – highly recommended
  • LNKD (LinkedIn) – solid intraday range
  • NFLX (Netflix) – solid intraday range
  • TSLA (Tesla Motors) – highly recommended 
  • 30-yr Treasury Bond future – highly recommended
  • 10-yr Treasury Note future – solid two way trade
  • TLT (Treasury Bond Long ETF) – very active
  • TBT (Treasury Bond Short ETF) – very active (moves inversely to TLT)
  • Gold (futures and ETF – GLD) very active – not suitable for all traders
  • Silver (futures and ETF – SLV) – very active – not suitable for all traders

Tags

Corrections, day trading, day trading software, day trading tools, Diversified Trading System, Euro, Trade Manager, treasuries, Treasury Markets, U.S. Dollar


You may also like

Leave a Reply

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}

Commodity Futures Trading Commission: Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

Content on this site is for educational and entertainment purposes only. Nothing on this site should be viewed as trading advice.