CISCO Futures
Using the CISCO Trader Control Package (TCP)
These are the steps the trader follows in using the TCP:
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Email dljones@cisco-futures.com
2. Examine the Overlay
3. Examine the Commercial activity
4. Strategy for the next day
5. Check the next day's tick table
Step 1: Select trades from the Bracket Screen
Upper and Lower price columns in the Bracket Screen define the bracket
and identify breakout prices for the contracts given by the Future columns.
The Brackets are posted for 20,15,10,5 day overlays
Value is centered at the mid-price of the bracket (as in the Market Profile).
A breakout is an alert for the beginning of a trend.
The latest day's close is provided to locate it relative to the upper and
lower limits of the bracket.
Trading date: Friday 18th Dec 1992
DY Future Upper Lower Close $Range
5 CC 3/93 7980 7790 7970 712
5 CD 3/93 7785 7736 7770 490
5 ED 3/93 9629 9611 9628 450
5 FC 3/93 8415 8350 8367 286
5 LC 3/93 7642 7572 7597 280
5 OJ 3/93 9785 9560 9620 337
5 PB 3/93 3905 3810 3877 361
5 S 3/93 5786 5710 5750 387
5 SF 3/93 7120 7020 7051 1250
5 SU 3/93 835 816 830 212
5 U2 3/93 10412 10322 10409 687 <=========
The March T-bond (U2 is the symbol) has a 5 day bracket
Let us choose that one for analysis.
Step 2: Examine the Bracketing Overlay
The Overlay gives three of the six basic trading reference points.
Trading date: Friday 18th Dec 1992
Price TPO's Volume Overlay
104-14 2 XX
104-12 2 XX <==============Upside Limit
104-10 6 XXXXXX
104-08 10 XXXXXXXXXX <=========Close
104-06 18 XXXXXXXXXXXXXXXXXX
104-04 30 XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
104-02 24 XXXXXXXXXXXXXXXXXXXXXXXX
104-00 18 XXXXXXXXXXXXXXXXXXX
103-30 22 XXXXXXXXXXXXXXXXXXXXXXX
103-28 14 XXXXXXXXXXXXXX
103-26 11 XXXXXXXXXXX
103-24 9 XXXXXXXXX
103-22 2 XX <==============Downside Limit
The X's (the TPO's) are one measure of trading volume--they gauge the recurrence
of trading at each price over time. This is TPO Volume.
Analysis of the Bracket
a. The upside limit is 104-12, breakout is at 104-13.
b. The downside breakout at 103-21.
c. Value is centered at 104-02 - 104-04.
d. The quality of the distribution is excellent (good symmetry).
e. The latest day's close is near the upper breakout price
Step 3: Examine the Commercial activity
Trading date: Friday 18th Dec 1992
The "smart money" (trading by commercials) redefines value daily
Price Volume %Vol %Commercial %Public Brackets
104-10 1619 0.9 2.0 40.1 LM
104-09 6609 3.7 7.4 34.2 ZLM
104-08 14527 8.2 9.5 37.5 Z$L
104-07 17007 9.6 17.7 25.4 Z$AL
104-06 25074 14.2 15.0 22.3 Z$ABJKL
104-05 18244 10.3 16.3 28.8 Z$ABFGJKL
104-04 32112 18.2 15.3 27.3 $BCEFGHIJK
104-03 35414 20.1 14.2 25.1 $BCDEFGHIJ
104-02 19275 10.9 18.0 <-- 28.7 $BCDEHIJ
104-01 6314 3.6 16.0 <-- 20.6 D
104-00 363 0.2 0.0 49.6 D
There is commercial capping at 104-02.
Heavy commercial buying occurred in 'D' period (9:30-10:00) indicated by
the two arrows above. We know it was buying because they were active
at 104-02 early in the day and price stayed above that the rest of the day.
Normally the commercials would be expected to be buying just above 103-22
and selling just below 104-12 ,the 5-day bracket breakout price levels. That
would buffer the balance. But,
today they bought at 104-02, at value in the 5-day bracket. And their
buying was also a cap on the bottom.
So the evidence is that value is somewhere above 104-02.
Step 4: Strategy for next day
The commercials have tipped us off that value is rising.
a. Under no circumstances should a short be placed
b. The long term and day trader should get long
----lower risk: go long at a 104-13 breakout
----higher risk: go long at open (bet aggressively)
c. Any stops are at the discretion of the trader
----(basic model uses Octant stop, 3 ticks)
Step 5: What happened the next day?
Trading date: Monday 21st Dec 1992
Half-Hour bars with tick volume
===============================
Z $ A B C D E F G H I J K L
104-31 3
104-30 14 17
104-29 2 41 29 7
104-28 4 34 14 2 17
104-27 6 3 6 16 13 27
104-26 11 7 22 15 24
104-25 16 29 4 7 12 12
104-24 41 23 22 7
104-23 35 1 15 2
104-22 2 22 12 3
104-21 19 38 2
104-20 31 17
104-19 29 1
104-18 15
104-17 3
104-16 2
104-15 4
104-14 9
104-13 24 14 <---- Breakout
104-12 12 23 8
104-11 2 4 12
104-10 9 10 10 1
104-09 11 15 6
104-08 7 4
The next day's trading began above previous 5-day bracket value of 104-02.
The market was strong breaking out at 104-13 in C period(9:00-9:30).
Day Traders who are short will get out.
Swing Traders would go or remain long. The three tick stop on breakout would hold.
This move continued to 105-17 the next day.
For more information phone 1-800-800-7227 or 1-303-306-1521
Send e-mail to CISCO <dljones@cisco-futures.com>
CISCO US postal address is: 14571 E. Mississippi Ave., #202, Aurora, CO 80012
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