Monday, September 8, 2014

Bund Slides Despite Nowonty Comments

The Bund future is putting in a rather sub-par performance in afterhours.  Despite ECB’s Governing Council member Eward Nowotny comments in Zurich, calling growth levels still very low and inflation far from ECB goal, we hear the Bund has found some sell stops elected.  The contract is a half point lower from the session high in fairly steady descent over the last two hours. 

For guide, the contract traded to a record high of 149.91 toward the end of August (28th) as the cash yield dipped below 90 bps.  Since, the contract has wandered lower and provided some mixed technical signals.  The price action on Thursday/Friday combined created a bullish engulfing.  This was really the only bullish candlestick development over the last two weeks, save the important new high. 

The session after the new high, on Aug 29th, a bearish hanging man was formed.  Thereafter the contract slid from a then closing price of 149.69 to last Wednesday’s low of 148.55.  Today’s price action is mostly buried within Friday’s price action and has created a bearish Harami.  This bearish Harami rejects the bullish implications of the bearish engulfing earlier noted and sets the stage for still further losses. Should the contract confirm the bearish Harami with lower price action tomorrow, we might have room to pull back to 147. 

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