Shorting the 30-Yr Bonds on Increased Volatility

We had only one trade that set up today, which was a short in the 30-Year Bond Futures (/ZB).

Shortly after our entry, price action continued to drift higher, piercing the clouds of the Volatility Box. We were spared by 1 tick, which is unusual compared to our stop-outs.

Either way, this was our sign to be cautious, recognize that we were experiencing greater-than-average volatility and switch on over to the Conservative Volatility Box.

Price then reversed, and we were given our first target, on both of our contracts. Our target line was now lower than our first target, enabling us to move both of our contracts to the same first target level, for a 1:1 risk-reward ratio.

We had a total of 1 trade that set up today, for a net P/L of +$437.50.

Trade Plan & Price Targets

We have earnings plays that stand out in KSU, STT, and SLB, which are captured below.

Below are some price targets, based on if the pattern that tends to happen repeats itself, and we get a move in the direction towards our bias.

We have added in some new labels in the Smarter Earnings indicator that now displays not only the average bullish or bearish dollar move (for a Gap N Go), but also the lowest moves.

We’ve found this to be more accurate, and useful, than using the V-Score in trying to plan out trades.

TickerPreferenceBiasEarningsLowest $ MoveAvg $ Move
KSUGap N GoBullishBeat $            1.16 $          2.38
STTGap FillsBothBeat/Miss –  – 
STTGap N GoBearishMiss $            1.26 $          2.69
SLBGap FillsBothBeat/Miss

Smarter Earnings Tools Updates

We also released an updated version of the Smarter Earnings tool, which contains a few updates:

  • Compare gaps to expected moves
  • Upcoming earnings expected move calculations
  • Lowest gap n go bullish $ moves
  • Lowest gap n go bearish $ moves

Use the link below to download the latest version of the indicator, for free.

Resources:

Sign up for a 30-day risk free trial to start trading with the Volatility Box.