The setups I include on this blog are used in conjunction with the 3/10macd and the criteria I ascribe to it as a way to alert me to an existing condition of price. The key concept to take away from this blog is that I try to anticipate what will happen on the higher time frame by using a faster time frame to trigger the trade setup. I do not trade a "system" I use two indicators to clue me in to price conditions. Please read the Disclaimer located in the sidebar of this site. I can be contacted via email at toddstrade@gmail.com
I am always open to questions, comments, or suggestions on how to improve this blog.


Friday, January 8, 2010

jaws of death?

I learned after watching a Larry Williams seminar to watch for inverse correlations between the bonds and equity markets. Particularly to pay attention when bonds are trending down at the same time the equity markets are trending up (referred to as the "Jaws of Death", as the bond markets will end up snapping down the equity markets). In this example I'm using the TLT and DIA ETF's as a proxy for the bonds and Dow Jones Industrial Average respectively. As you can see the two have been trending in opposite directions, most dramatically since the beginning of December, forming the "Jaws of Death".Though this isn't something that has precise predictive signals, it is worth taking note of, especially when one of the instruments is at an important technical level, as TLT is currently.Watch the bond market for bottoming and volume tells. If the TLT breaks $89 we may get that volume somewhere below $89 and above $82 to support price. Remember, trends end in a climax!

2 comments:

Jules said...

LOL! I love the 2 eyes that you put on the monster, Todd!

Trust you've had a lovely holiday? Good to have you back!

todd said...

lol thanks Jules :). Actually, there was just one eye, the other was meant to be a nostril!