Bond Market Highlight #1
Bond market all-time high occurs 1 day after monthly/weekly "Inversion Cycle" ALIGNMENT.
(COMMENT #s 2, 16, 18, 25)
UPDATED 19980105
COMMENT 1998-2
1. Turn to page 282 of the "BEST BETS" section of "The 1998 $upertrader's Almanac - 1st Half Edition".
2. Note the vertical lines in the top chart of monthly prices and that this month is the next month of the expected turn.
3. Note the monthly/weekly "Inversion Cycle" ALIGNMENT which occurs THIS WEEK! (See page 245 of "The $upertrader's Book of Linear Time Cycles").
4. The graphical presentation of the "Inversion Cycles" for this market is shown for monthly prices on page 303 of "The $upertrader's Book of Linear Time Cycles". Note that this month's value is the highest in the chart (i.e., for the 15 months ending March, 1998).
Is this information, prepared over 1 year ago, ALIGNING with this market, or what?
5. The graphical presentation of the "Inversion Cycles" for this market is shown for weekly prices on page 305 of "The $upertrader's Book of Linear Time Cycles". Note that this week's value is the second highest in the chart.
Is this information, prepared over 1 year ago, ALIGNING with this market, or what?
6. In the "BEST BETS" section of "The 1998 $upertrader's Almanac - 1st Half Edition" (see page 282), this weekly "Inversion Cycle" projected turn is shown by the vertical line on the right of the middle chart.
7. For Elliotticians, relabel the "I-II-1-A-B-C of 2" as "A-A-a-a-b-c of b".
8. Note that this market's counterpart on page 304 has not CONFIRMED the move and is forming a MOST IMPORTANT, MAJOR DIVERGENCE (see pages 171-184 of "The $upertrader's Reference Manual").
9. Note that these dates are right on the highest anniversary values of the month of January (see the table on page 78 of "The 1998 $upertrader's Almanac - 1st Half Edition").
Odds favor approaching this market from the short side.
10. If the market peaks today, for instance, it will have peaked EXACTLY on an "A Point" (see page 398 of "The 1998 $upertrader's Almanac - 1st Half Edition").
11. Traders should be particularly sensitive to market reversals to the downside in this market and should employ approaches that provide short entry with tight stops against recent highs in the March contract.
12. The very short term trading system presented on pages 96-101 of "The $upertrader's Almanac - Reference Manual" is such a "system".
13. A close below the open over the next few days will cause a "white" candlestick which should be sufficient to provide a short term entry signal.
14. The system presented in pages 205-209 of "The $upertrader's Almanac - Reference Manual" is particularly suitable for this market at this time as is the "ALMANAC II" trading system presented in "The 1996 $upertrader's Almanac - 2nd Half Edition).
15. The reader should observe that trading is simply the process of identifying a number of situations such as this one that have a chance of working out quite well if the analysis is correct but which involve very little risk to capital if wrong.
16. If prices do not peak for the year this week (perhaps next), odds will begin to favor the scenario presented in the chart at the top of page 282 of "The 1998 $upertrader's Almanac - 1st Half Edition".
UPDATED 19980109
COMMENT 1998-16
Turn to the "Progression of Prices" discussion on pages 272-280 of "The 1998 $upertrader's Almanac - 1st Half Edition".
1. TB have broken the February, 1996 high in this market but are nowheres near the October, 1992 high.
2. ED are considerably below their February, 1996 or October, 1992 highs and are DIVERGING with the TB high of this week (see pages 171-184 of "The $upertrader's Reference Manual").
3. TN have not broken their February, 1992 or September, 1993 highs and are DIVERGING with the TB high of this week (see pages 171-184 of "The $upertrader's Reference Manual").
4. TN are not CONFIRMING the new all-time highs in the BD (see pages 171-184 of "The $upertrader's Reference Manual").
5. BD, by moving higher, are DIVERGING from stocks, which are moving lower.
6. When bonds peak and begin to move lower, one of the most interesting questions of 1998 will be answered. Continuation of the present DIVERGENCE would suggest that stocks would be in position to rally. The more traditional expectation that stocks and bonds somewhat parallel each other's moves would suggest that they both move down together.
7. Each market's phase is a little different. In this phase, for instance, funds have flown to the long end of the interest rate sector during times of instability rather than to the highest quality, short end.
UPDATED 19980113
COMMENT 1998-18
1. The OPTIONAL FAX "Seasonal Trade Portfolio" began to follow BD and TN from the short side by using the "ALMANAC V" trading algorithm beginning yesterday (see pages 256 of "The 1998 $upertrader's Almanac - 1st Half Edition").
2. The OPTIONAL FAX "Seasonal Trade Portfolio" began to follow CL, HO, CC, and SV from the long side by using the "ALMANAC V" trading algorithm beginning yesterday (see pages 256 of "The 1998 $upertrader's Almanac - 1st Half Edition").
UPDATED 19980115
COMMENT 1998-25
1. The March bonds were sold 980112 at 12323 in COMMENT 1998-18.
2. The March notes were sold 980112 at 11420 in COMMENT 1998-18.
3. Should pay for a few year's Almanacs!
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