Ten-Year T-Notes Trading Sideways with a Negative Bias
I have plotted a trend channel detailing the slight negative bias for the T-notes. This bias contradicts the momentum status, which is a trading range with a bullish bias based on the RSI readings. The daily RSI readings are still indicating a trading range with a bullish bias. The trend does not turn down until the RSI closes below 38. Watch for a pivot low to form on the RSI above 38 to signal a short-term bottom. This could happen today.
The Constant Volume Chart is set to 25,000 contracts with the CQG SnapTrader and the RSI set to 14-bars. Currently, the recent extreme readings by the RSI are well above 62, indicating an uptrend. The RSI has just formed pivot lows above 38 and pivot highs below 62, and that signals a trading range.
The T-note TradeFlow Chart, has the two studies set to five-bar running sums, and the ChartTrader attached. At time this image was captured, we can see that buyers are coming in as the peaks of the buy volume line are dominating the sell volume line (red) of the TFVCrss study.
The TradeFlow short-term view can quickly change.
April 3rd, 2007 at 4:23 am
Hi Thom
Could you clarify that you are using the RSI 50 line as determining trend but the 62/38 as showing if the trend is persistent?
April 3rd, 2007 at 7:13 am
Thanks for the inquiry. This is all based on years of observation.
The RSI 50 level is what I use to color the bars, as a simple guideline. RSI greater than 50 = green, and RS less than 50 = red. The 62/38 are more important to me.
When a market is trending up, the range of the RSI readings shift upwards. That is, oversold is not 25, but more likely around 40, and overbought is up towards 70-80.
When the market is trending down, the range of the RSI readings shifts downwards. Oversold is down towards 20-30, and overbought is around 60.
The RSI readings indicate the trend status.
So, if the RSI is peaking above 62, and turning up from above 38, then the market is in an uptrend. If the RSI starts to peak out below 62, we have a warning that the market is moving into a trading range, but with a bullish bias.
If the RSI was hitting low readings below 38, and high readings below 62, the market is in a down trend. If the RSI starts to flash low readings that turn up from above 38, then the market is moving into a trading range, but with a bearish bias.
If the market is in a support zone, and the RSI starts forming pivot lows above 38, support could hold. If the market is in a resistance zone and the RSI starts peaking below 62, then the market may be reversing the up trend.