This wasn’t a big surprise, as we knew when we cut our short 10yr position over a week ago, and took our profit on our short 30yr position Monday night, that both looked as if they could generate a long signal with just a modest consolidation and resumption. Both have done exactly that, triggering entry signals for tonight’s open.
Going into Friday we will now be LONG S&P, NASDAQ, 30yr, 10yr, Euro, Pound, Gold, and SHORT Dollar.
Here are the new signals:-
Long 30yr ($ZB_F) 10/4 +$0.00 per contract
The 30yr has stayed remarkably resilient in the last week. It limped across our stop for our long-time short position, and has now triggered a follow through signal to go long. The consolidation following a swift advance off the lows, and holding above the 20 and 50 MA’s which have since crossed over, is very constructive price action. Getting a signal following a lengthy trend in the opposite direction is always a difficult trade to take. Psychologically it’s much harder than taking a trade that’s a continuation of a trend you’ve already benefited from. Initially, it’s also a less attractive risk/reward. If you’re going long here, what makes you wrong? It can only be a new low. There’s no other way around it. There’s nothing wrong with that, but it makes it a trade that initially requires a wide stop, down at new lows. In reality an ATR stop could trigger before then, and as the trade gets older the trail will make the risk/reward more favorable and hopefully even provide us with an opportunity to add with another consolidation and advance higher up, but as I have stressed many times before, we always have to think in terms of possibilities not probabilities when it comes to placement of stops and position size.
Long 10yr ($ZN_F) 10/4 +$0.00 per contract
The rally in the 10yr has been even more pronounced and may even see some short-term consolidation here above the MA’s, but the uptrend is clear. Initially the risk/reward is the same as per the comments for the 30yr, but a shallow consolidation or further advance could see a trailing stop move up to that 124-125 zone fairly quickly.
Our existing positions are as follows:-
Long S&P ($ES_F) 9/18 -$1,587.50 per contract
Long NASDAQ ($NQ_F) 7/18 +$2,640.00 per contract
Short Dollar ($DX_F) 9/19 +$410.00 per contract
Long Euro ($6E_F) 9/19 +$1,350.00 per contract
Long Pound ($6B_F) 9/12 +$2,081.25 per contract
Long Gold ($GC_F) 8/16 -$4,870.00 per contract