Another stock market sell-off and the Bond was higher. The flight to quality play is intact. The Bond stalled at 114-15/16 until the selling in the ES picked up again. The Bond rallied to retest its recent high at 114-25. One quick sell off as day traders liquidated their positions. The close was strong. The Bond market is set to take out 115-00 w/a little help from the ES. Tuesday’s market could take the Bond through 115-00. Will update the Bond after Monday’s holiday.
F1 Comments: Once again volume and price moved higher. As long as the Bond continues to build volume above 113-04/08 the Bond is pointed higher. The bias remains for higher prices.
F2 Comments: Not a difficult day to foretell and call. The ES was lower. The news was supportive. And the Bond traded higher. It was a double distribution day w/114-25, a recent chart retested and it held. The close was strong. The analysis favors higher prices w/out news and a recovering ES. The focus remains the stock market, a softening economy and inflation down the road. Light news w/Pending Home Sales expected at ??? . Last month’s number was-2.0%. If the ES is sideways to lower, we want to buy early weakness and see if 115-00 can be taken out. Resistance is at 114-29/30, 115-13 and 115-20/24. Buy zone is 114-13/17. Exit, if 114-29/30 holds. OK to get short, if the ES is in a strong rally or if 114-29/115-00 holds. Market then has to take out 114-15 to stay short.
F4 Comments: Analysis favored the buy side. But could take a short, if the ES rallied. F4 screen generated multiple trades from either side of the market.
