TDGonTView

Bond Pong. Like Beer Pong With Less Bloating

CBOT:ZBZ2020   T-BOND FUTURES (DEC 2020)
Most 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.
Trade active: Okay, we in here mixing it up today shorting the top of the channel. Selling 177'07 and covering for 4-5 ticks. Bond pong.
Trade active: We sold the top of the channel 177'07 lucky number 7 times on Friday for a total of 22 ticks. Single lot each time. No move more than 2 ticks higher the entire session.
Trade active: Still trading the top of range on the short side. Moved slightly higher today to 177'12.
Trade active: Broke out of channel to the downside.
9/30/20 11:40 @USZ0 US T-BOND LONG 1 175 27/32 9/30 15:24 176 8/32 n/a $400
Trade closed manually: Channel broke and break below bid zone. We are long from 173'30 but this channel idea is over. Closing "idea."
Trade Like You Mean It!

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