Thursday, September 6, 2012

1st "b" down logged - next step is to sell strength overnight

Now comes the waiting game...waiting for some market participant to "call the bottom" and try to buy the market.  There is no guarantee this happens...but this pattern is what gives bell-curve market-profile traders like us the chance to sell a "pop"and enter into a position with the best possible risk vs reward.  If the market does not "pop" then we will deal with that outcome overnight..possibly by selling the bulb of the "b".  However, it is too early to call for that.

For now, the "pop" would be something on the order of 132-26+ --> 132-28+.  If this is a real oversupply condition, then the next leg down should be on the order of 12-14 ticks from the bulb of the "b"...taking ZN to around 132-10.  Recall from earlier this week we described the potential outcomes of a supply condition.  While there is no guarantee of a supply distribution taking us to 132-10, there is a 95% chance that the outer edge of the bell curve (in this case 132-28+) will hold.  So, pray for an overnight lift giving us a chance to get short.

govttrader out...

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