Yesterday I highlighted a breakout setup in the T Bond futures (read it here), That setup gave a good pop today after the weak consumer confidence number. Let’s look at how you could have traded it.
The daily chart for March T Bond futures is below. I drew the blue horizontal line at Friday’s high of 116-28; that was the upside breakout point I used. 117-074 was Friday’s high and the top of the little triangle; it was the first objective for a breakout rally.
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Below is a 10 minute chart for March T Bond futures for today. The two red horizontal lines are at yesterday and Friday’s highs; they were our entry points. Note the overnight high was 116-25 (and a double top); reinforcing the significance a breakout would have.
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The consumer confidence report was the important economic release for the day; its release was likely to lead to the breakout move we were anticipating. The weak number led to a sharp rally in Treasuries; and we were stopped into long positions after its release.
The first profit target was Friday’s high at 117-07; this was reached within about five minutes of entry. The 20 period EMA is at 117-14 today; it was the second profit target.
For the rest of today’s session; I’m maintaining a bullish posture with held trade over Friday’s high. The next profit targets are 117-24 (a 50% retracement of the selloff from the Feb. 5 high), then the Feb 16 swing high of 118-01.
The Taylor Technique teaches us to be patient to wait for our ‘play’. Breakout setups like today give us the trading rules to do that.
This is a sample of the analysis from my Swing Trader’s Insight advisory service. For information on STI, and to sign up for a free two week trial, visit here.
The information contained here includes information from sources believed to be reliable and accurate, but no guarantee is made as to accuracy, nor do they purport to be complete. Opinions are subject to change without notice. Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
