20 March 2014

ED Futures : Range Trade

  • Switching coverage from EDZ5 to EDZ6 (last traded 97-73).
  • After digesting all that was said overnight post FOMC, my take is that it's not time to get overly bearish of Rates markets yet.
  • Chart readings reflect this. Monthly chart has been in a large trading range [98-06, 97-63] for the past 6 months (which  happens to correspond nicely with the 32% and 68% Fibonacci levels of the big down move from 98-74 to 96-95). Last night's trading after the FOMC changes have merely driven us down towards the lower end of this large trading band. I cannot find reasons (chart patterns) to get involved from the daily and weekly charts.
  • Given I am already invested heavily on the Fed tightening side (long USD/CAD and short Copper), will try to buy EDZ6 and ZNM4 on dips to go the other way. Both are steep positive carry trades.
  • Big picture : Possibly in the right shoulder formation phase of large SHS top. If so, then the real bear trade is probably not until we get a break of 97-20 or thereabouts.


Taichiseal said...

+ZNM4 @ 123-10

Taichiseal said...

GTC 97-64 limit order to buy EDZ6, touched but not filled last night. Strong bounce off lows reinforces range trade scenario.