Euro-Bund FutureShort
Early signs of bullish exhaustion
Left panel - Bund futures:
- Ichimoku setup is distorted due to previous contract switch (Sept-Dec) roll down, information deriving from Price relative to averages is less reliable now. Consider it as neutral.
- However Heikin-Ashi signals are always reliable. This time watch our quantification tools: haDelta and haOscillator! Both indicators cross down at a relatively high print, signalling bullish momentum started to drop, chance for a local top here. It may take a few more days before we have a candle confirmation too. But that's why we use quantification tools in Heikin-Ashi system. This is the way we see signals earlier than the averaging and lagging candles show clearer picture of price action.
- EWO is neutral.
- MACD signal: pull back and consolidation phase, bearish bias will increase when/if histogram ticks down.
Right panel - 10y German cash bond yield:
- Spike to 8 basis points (0,08 %) yield, followed by sharp reversal and collapse to -15 bps (-0,15 %). Looking at averages the Ichimoku setup did not change much, it is neutral.
- Again, in this volatile noisy environment, we have to listen to Heikin-Ashi filter. Similar action of haDelta and haOscillator in the yield chart: both crosses back up from a relatively low point.
Looks the heavy buying in German 10y Bund may be close to its end. Downside in yield is quite limited from here.
Strategy: exit longs. Maybe you can start to focus on smaller size swing short too, but in case yields start to move higher a bit, Italian BTP is still a better short.
If you open shorts, no rush, try to sell spikes.
Note: I am short both BTP (one full size) and Bund (half size) now.
- Ichimoku setup is distorted due to previous contract switch (Sept-Dec) roll down, information deriving from Price relative to averages is less reliable now. Consider it as neutral.
- However Heikin-Ashi signals are always reliable. This time watch our quantification tools: haDelta and haOscillator! Both indicators cross down at a relatively high print, signalling bullish momentum started to drop, chance for a local top here. It may take a few more days before we have a candle confirmation too. But that's why we use quantification tools in Heikin-Ashi system. This is the way we see signals earlier than the averaging and lagging candles show clearer picture of price action.
- EWO is neutral.
- MACD signal: pull back and consolidation phase, bearish bias will increase when/if histogram ticks down.
Right panel - 10y German cash bond yield:
- Spike to 8 basis points (0,08 %) yield, followed by sharp reversal and collapse to -15 bps (-0,15 %). Looking at averages the Ichimoku setup did not change much, it is neutral.
- Again, in this volatile noisy environment, we have to listen to Heikin-Ashi filter. Similar action of haDelta and haOscillator in the yield chart: both crosses back up from a relatively low point.
Looks the heavy buying in German 10y Bund may be close to its end. Downside in yield is quite limited from here.
Strategy: exit longs. Maybe you can start to focus on smaller size swing short too, but in case yields start to move higher a bit, Italian BTP is still a better short.
If you open shorts, no rush, try to sell spikes.
Note: I am short both BTP (one full size) and Bund (half size) now.
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