Thursday, June 5, 2014

A 1930.75 rally target broached here earlier remains viable, implying that day traders should position from the long side for now. I don't mean to imply a set-it-and-forget-it trade, since the uptrend that presumably will get this vehicle to the target has been an agony of feints and swoons thus far. If you have the good fortune to catch the move, I would suggest using some of your profits to cushion a tight stop-loss on a short initiated at the target.

I've stated that the T-Bond rally has much further to go -- that the powerful run-up begun at the start of the year has been just a warm-up for the massive unwind out of stocks and into bonds that is yet to come. Even so, the rally has been so steep and relentless that that a nasty correction was long overdue. Is it already under way?  We'll be better able to judge when we've seen how the downtrend interacts with the 135^10 target shown, my minimum downside target for the near term. That implies that the rally from yesterday's lows can be shorted, presumably at a Hidden Pivot resistance discernible on the lesser charts, and that the anticipated drop thereafter could be bottom-fished at the 135^10 target itself.  Keep in mind that the futures could fall all the way to 132^00 before retracing half of the 2014 run-up, and to 131^30 to reach the 0.618 Fibonacci level. ______ UPDATE (11:41 p.m. ET): The wicked 'Draghi swoon' that greeted the day sent this vehicle plunging to a 135^13 low before it rebounded sharply.  Did you catch a piece of the action?  If so, please let me know in the chat room and I'll establish a tracking position. _______ UPDATE (June 10, 12:52 a.m.): The futures were in a moderate uptrend on the hourly chart at the closing bell. Now, if they push past a midpoint Hidden Pivot at 135^29, look for further progress -- presumably tradable -- to at least 136^26, basis the SEPTEMBER contract.