Bond Pong. Like Beer Pong With Less BloatingMost retail futures traders hang out in the stock indices, metals, or energy primarily. This makes sense as those markets move on a daily basis. But tonight, we'd like to make a case for looking at interest rates products, specifically the 30Y bond. As volatility picks up, the bonds haven't really kept pace and instead have stayed within defined ranges, making for a good case for some back-and-forth action.
For the past several weeks, a well defined channel in the 30Y Bond (ZBZ2020) has formed with a one point range between 176 and 177.
We're buyers at the bottom of the channel at 176 and sellers and the top at 177. It's a game of pong. What's constructive about this chart is that we have bumpers on either side of the channel in the form of a bid zone at 175 and an offer zone at 178. So we can scalp the channel and then look to add on a break or stop and wait for the level.
Our current position (CurPos) is flat as price is in the middle of the channel. We'll update this idea on our next entry.
Note: the ZN chart (10Y Note) looks similar and is 1/2 the size roughly on a per-tick-basis.
