Bond Market Highlight #8
"ALMANAC V" trading system sells on exact date of US Treasury Bond market all-time high.
(COMMENT #s 441 [#s 1-2], 451)
UPDATED 19980615
COMMENT 1998-441 [#s 1-2]
1. If the stock market holds Friday's lows today, you will find the use of the "ALMANAC V" trading system on page 256 of "The 1998 $upertrader's Almanac - 1st Half Edition" to be quite appropriate.
2. In particular, the 2nd entry in the "SHORT" listing for this week's markets on page 236 (TRADE #14)
UPDATED 19980616
COMMENT 1998-451
1. As you know, if you've been following these COMMENTS over the last several months, we have been looking for the bond market to move upwards from the April lows.
2. Our anticipation was that this market was either forming an Elliott Wave "D - E" sequence or "c of B" sequence.
3. In either case, a move up to the down trendline off the January / April highs from the 980430 lows was in order.
4. The "c of B" case was, most of the time, the favored scenario.
5. This sequence now appears complete.
6. A PHI projection off the 980430 to 980501 upmove projects to 124.13.
7. A PHI projection off the 980605 upmove projects to 123.28.
8. An up channel trendline drawn off the 980501 high and parallel to the trendline drawn off the 980511 and 980605 lows roughly intersect's yesterday's high.
9. The second leg up from 980511 to 980601 lasted 308 32nds.
10. The third leg up from 980605 to 980615 lasted 307 32nds.
11. This market made a new all-time high in the June contract and in the spot contract.
12. The September contract, however, has not CONFIRMED this new high having peaked yesterday at 124.04.
13. The "ALMANAC V" trading system sold this market short yesterday (see COMMENT # 441).
14. The notes have further DIVERGED with these new highs and the TB & ED are nowhere close (see pages 171-184 of "The $upertrader's Reference Manual" and 272-278 of "The 1998 $upertrader's Almanac - 1st Half Edition").
15. In fact, the TB have just provided an "ALMANAC V" sell signal today (see page 236 of "The 1998 $upertrader's Almanac - 1st Half Edition").
16. Having noted all the topping factors hereinabove, it should be noted that momentum oscillators such as RSI and Slow Stochastics are not DIVERGING with this information suggesting that, instead of the "c of B" wave being complete, the move is simply a pause with more up to come.
17. Fundamentally, the very fact that long term rates are about as low as short term rates should be a MAJOR warning signal.
18. If the market peaked yesterday, the 980112 to 980306 downmove will have lasted 53 calendar days (FIBONACCI # = 55) while the 980306 to 980615 upmove will have lasted 101 calendar days.
19. 101 / 53 = 1.906 (SQ RT [SQ PHI + 1.000] = SQ RT 3.618 = 1.902).
20. As in the preceding market, a few more days would actually be more ideal.
21. Hence, although other factors, such as the strong seasonals and cycles in the books, would suggest more to come on the upside, let's stay with the long term assumption that a "c of B" wave is being completed at the old resistance highs for now.
22. With regard to the seasonals in the books for this market, "Golden Nugget" seasonal #s 31 and 36 were listed as averaging about $ 4,000 and $ 3,500 with both beginning in May.
23. Both of these seasonals have attained their seasonal averages even though more TIME is suggested by both (see pages 194 and 202 of "The 1998 $upertrader's Almanac - 1st Half Edition").
24. The same analysis can be made for 5 year seasonal trade #s 176, 180, 206, and 218 and the other markets in this complex.
25. In fact, note the long term seasonal chart on page 298 from mid-June forward (use the September contract [the "dashed" line] which is marked "7809", the first contract studied in the sequence- i.e., September, 1978)
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