I am seeing a ray of light for traders exhibited by the resulting declines being met with rallies. Early Monday morning, there was some higher minus NYSE tick that resulted in a rally. Keep in mind the market is still very nervous about Europe. It seems as if a sneeze in Europe makes the United States thinks it has Pneumonia. I do feel a gradual metamorphosis away from fear to normalcy by the end of June. The ongoing saga of the overpricing of bond futures is a historical precedent I think will be in place for years. A 152 ’19 could be a resistance of importance in the bonds. We need to see a change in tape action that would dictate selling as evidenced by lower lows and lower highs on a consecutive day basis. The contagion in Europe will lose its panic hold that has driven bond prices up as this month progresses. Technically a 3 to 5 point decline is a minimum expectation. Any fundamental change in Europe that is more favorable could result in a greater decline in bond prices. The most difficult, exasperating, and challenging trading always precedes the most compatible, favorable, and amenable trading environment. This occurs when extremes are registered that creates a purging. Traders become very disenchanted and discouraged when they should be, chomping at the bit, so to speak. The environment that has been created by the Federal Reserve and the European contagion leads to opportunities. Traders are on the threshold of a market that wants to regain its composure and establish equilibrium. Extensive manipulation creates distortions as we have seen most notably in the US treasury market. We have seen a movement in the 30-Yr. bond futures for approximately 7 points. This movement has resulted in less than 3 months period of time. Whenever an exhausted move such as this is registered, volume spikes.
Meanwhile, the stock market seems to have been in the zone of a mood whereby a man has lost his best friend, his pet dog. It is aimless and drifting with minimizing energy. Like any wounded entity, it requires time for healing. These two situations represent opportunities that are rare, but always presents beneficial profit opportunities to seize.
I want to encourage all of you within your trading personality, to be aggressive over the next three months as this could represent great profit opportunities. The market will endeavor to stabilize like a bilge pump that takes water from a listing ship. Once the ship is righted and the danger passes, there is much catch up to be done in the market movements. The pros will tighten their belt, put on their track shoes, and pull from within their gut the heart and soul that makes them winners. Please join me in the race to the pot of gold. Will you?!?!?