Starting A New Trend?

http://mrtopstep.com George Cavaligos, MF Global - The daily TY1 continuation chart below shows us a couple important technical signals. The first is the lack of RSI confirmation over the last 2 months of choppy price increases in the TY1 (a technical divergence), the second is the speed and extent of the sell off in the last 7 trading days. The rally that started in April of the year took approximately 3.5 months to increase prices by 7 points; in the last 2 weeks we have seen the market break 4 points in 5 trading days. Elliot Wave analysts would call that recent sell off Impulsive, because of the speed and magnitude of the move compared to the previous choppy rally. The next major move down here could also be counted in Elliot Wave terms as a possible 3rd wave to the downside with initial targets at the previous lows around 117.5-118.00 area and perhaps more! I like buying the TYQ (July 22 expiry) 120 puts which are trading 8-9/64’s with futures at 122.12 for the NFP data tomorrow and would look to exit them quickly if the data is bearish.

http://twitter.com/mrtopstep

**Filmed on the trading floor at the CME Group. Produced by MrTopStep with MarketHEIST