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T-Bond Commentary for Friday, September 8, 2000

US T-Bonds  Dec  USZ0

Pattern Signals - an automated pattern identification process which
identifies today's most likely market scenario based on recent price behavior.

Low Range Close: 80% chance that today's
low will be less than yesterday's. Look for shorts.


Pivot System Support & Resistance Levels - commonly used by floor professionals to determine
relative value based on prior day price activity. Shifts in market psychology often occur near these levels.

R2  100-21     R1  100-09     DP  100-01     S1  99-21     S2  99-13

Range Projections - This market will have a tendency to trade within the Normal
High/Low Range today as noted below. If those levels are exceeded, use the Extended Range.

	Normal	Extended
High	100-07	100-15
Low	99-19	99-11

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TODAY'S T-BOND COMMENTARY

The only Pattern Signal fired for today's trading is the Low Range Close. This signal indicates that the close of yesterday's trading was within the bottom 20% of the day's range and suggests an 80-85% chance that today's low will be less than yesterday's.

On the T-Bond Half Day chart, all three of our Cycle Indicators are now within the region where short term cyclical bottoms often form, but that doesn't mean that we should expect one to begin developing right away. Our first clue will be an upturn in the 7 period %K. Once this indicator turns from within an overbought or oversold zone, it is a fairly good indication that a new trend has begun and at least several more bars of the new short term direction should follow. Until that happens, our Cycle Indicators are telling us to expect sideways to lower activity.

The ADX levels on 5, 15 and 30 minute charts are above 30, indicating that the trend to lower prices is still intact in these timeframes. If we were triggered into a short position by a price reversal pattern and/or Oscillator Divergence near the 20EMA of any of these timeframes, we would have the makings of a Holy Grail setup. A trade based in part on a Holy Grail pattern can take as its minimum profit target a return to the most recent swing pivot extreme. If the move to that level can occur on Momentum Confirmation, there should be even more downside in the making.

Both the Low Range Close signal and high ADX readings in several critical timeframes imply additional downside potential. The ideal scenario would entail a normal corrective reaction towards one of the resistance levels above current price, the most significant being that of the 100-01 Daily Pivot. If price were able to move into this zone as higher timeframe 20EMAs were coming down from above, we'd have another reason to get short. A price reversal pattern and/or Oscillator Divergence can trigger us into the trade with the likely target being yesterday's 99-25 low.

On the other hand, a convincing upside break of the Daily Pivot would have us thinking more bullish thoughts.

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