Friday, August 17, 2012

Market Profile Update- new mode for ZN 132-15..and a new trading range

The market has spent the last 8 hours coiling around the new 132-14+/15 center of value in ZN.   It was not until 3am that we would have been able to see this...which again argues the case for being awake during the London session.

 ES futures have been going sideways during the entire overnight session, so the overnight moves in treasuries were not caused by movements in stocks.  These types of moves occur as market participants battle it out in a back and forth fashion as individuals attempt to determine where the overall market believes the center of value to be.

With 132-14+/15 asserting itself as the center of value, we can establish our trading plan.  The current trading range in ZN now becomes 132-10 --> 132-20.  With the most recent high of 132-19...that should tighten up the bottom of the range to 132-11.  So, my current plan is to buy a dip down to the 132-10/11 area, and get flat when the market gets back to the center around 132-15.

Just another musing...if I had woken up earlier (5am) I would have already had the chance to do this trade cycle...twice.  The early bird indeed does get the worm.

Update 9:20am
I was just looking over the charts, and it occurred to me that i didn't discuss the possible larger trading range, as we have moved into the NY session, and with larger volumes can sometimes come larger moves.  The larger trading range surrounding the 132-15 mode is 132-08 --> 132-24.  Without some large impulse today (ECB Draghi speak for example), these ranges should hold...making today a rather tight range controlled day.


  1. Great stuff, thanks for posting! Not many blogs are purely as focused on trading mentality. If you have time to respond I wanted to see if from your experience does it pay off to focus more on slightly longer term trends i.e. 1 month to 3 month and positioning on the sides of the channel towards trend direction? looks like we breaking up on the TYU2.... 132-19+.....

  2. Equities wrapping up options expiration today and VIX just broke below 14 (at 11:30 EST). Just noting per your comment of TY in context of ES flat overnight. Monday could be interesting. Cole