Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Tech Stock Options -- Ignore unavailable to you. Want to Upgrade?

To: Stoctrash who wrote (51746)	9/7/1998 9:25:00 PM
From: Lee	Respond to of 58727

Hi Fred,..Re:<< Bonds >> According to Chartwatch, 126^02 is important support for the Dec. bond. As long as we stay above that the bull market is still intact. However, I'm long Oct 125 puts. <VBG> Regards, Lee CHARTWATCH T-Bond Research Charts & Text as of close: September 3, 1998 U.S. TREASURY BONDS As of the close Friday August 28, all upside measuring objectives on the daily and weekly T-Bond charts had been met. This led to the worry by the longs that perhaps a Head & Shoulders Top was trying to form on the hourly T-Bond chart. The crucial price level on the Dec Bonds was the Friday August 28 low of 125-25. This was the location of the possible neckline. Going into the close Thursday September 3, this level was not breeched. Indeed, by the close September 2, too much time had elapsed for the potential bearish pattern to be activated. This leaves a bar chartist with a market that remains above classical underlying support and no overhead resistance. This is obviously the definition of a bull market. 126-02 is the most important price level on the Dec T-Bond chart. This is the support at the August 21 former price high. A blanket statement can be made: As long as the Dec Bonds maintain a close above 126-02 - a bull market is in place. This statement allows a bar chartist to remain long the Dec Bonds and simply let the market tell him whether to exit from these positions. Total open interest in T-Bond futures has dropped precipitously. Much of this was anticipated due to the expiration of the important quarterly (Sept) option series and the fact that the Sept future was approaching first position day. But the magnitude of the open interest drop also suggest that the smart money, the longs, were taking profits - and the losers were throwing in the towel - taking losses. This makes the price action even more important. Price is obviously more important than volume or open interest considerations. CHARTWATCH is placing an inordinate amount of emphasis on the 126-02 level. A close below 126-02 would cause all longs to be liquidated. What about the very long term view? It remains bullish. This is due to the very large Ascending Right Triangle on the monthly continuation chart. As discussed last week, futures traders must place more emphasis on the daily chart for entering or exiting from existing positions. For traders currently long T-Bonds and not wanting to risk a price decline going into a close that takes the Dec Bonds substantially below 126-02, CHARTWATCH would suggest a sell-stop at 126-01. If this protective stop is executed, there will be ample opportunity to re-enter the Bond futures - after a definable risk : reward trade is present. End of CHARTWATCH T-Bond Research September 3, 1998 Weekly T-Bond Chart and Monthly T-Bond Chart (with Elliott Wave Count) Selected T-Bond Futures Volatility Charts (Thru August 20) Return to CHARTWATCH HomePage chartwatch.com/research Information provided is taken from sources believed to be reliable but is not guaranteed as to its accuracy or completeness. The Rules and Regulations of the Chicago Board of Trade and/or the Mid-America Commodity Exchange should be consulted as the authoritative source for information, rules and contract specifications. c 1998 Chicago Board of Trade. ALL RIGHTS RESERVED.