Stacking moving averages, put-call regimes, and double bottoms

Three layers, one veto

This archive article restates a 1990 bond-futures workflow that combined a moving average, a put-call ratio, and a double top or double bottom. Longer-horizon work is introduced with moving averages plus a 13-week net-change oscillator to separate a trend from a range in which supply and demand look balanced.

The moving average is a lookback mean of ordered prices used both as a 30-day trend baseline and as the five-day reference inside a stretch oscillator. The put-call ratio is a 10-day average of listed call volume versus put volume used to classify optimistic versus pessimistic option-market regimes. A double top or double bottom is a repeated high or low in price structure used as a confirmation signal only when it agrees with sentiment and the prevailing moving-average trend.

Trend context and relative position

Trend context uses a 30-day moving average plus the contract's place versus that average and the prior six months of highs and lows. Relative position is where the current price sits versus the 30-day moving average and those highs and lows.

A mid-September reading sat below the 30-day average but above the April 1990 lows. The stated rule is not to trade against the trend.

Participation and the equivolume box

Equivolume plotting uses price on the vertical axis and volume on the horizontal axis, so each session is a box whose width records participation. An equivolume box therefore makes heavy or light participation visible in the width of the bar.

Heavy-volume sessions that close strong are treated as constructive, heavy-volume weak closes as cautionary, and light-volume sessions as typically moving against the prevailing trend.

Stretch timing with the five-day oscillator

Short-term stretch is measured with a five-day oscillator equal to the latest price minus a five-day moving average. That signed gap marks when a bond contract has stretched about one full point.

The bond futures contract is described as usually starting to consolidate once price is a full point, or 32/32, beyond that five-day moving average. TradersWeek, as an editorial matter, uses this oscillator only for timing after the 30-day trend has already allowed the idea.

Regime from the 10-day put-call average

Crowd temperature is taken from a 10-day moving average of listed call volume versus put volume. About 80% is treated as heavy put demand and above 120% as heavy call demand.

That reading classifies an optimistic versus a pessimistic option-market regime. It does not, in this workflow, replace the 30-day moving-average veto.

Confirmation from a double top or double bottom

A double bottom is treated as more credible when that call-put reading is simultaneously very low. The pattern is a repeated high or low in price structure, not a standalone trigger.

TradersWeek, as an editorial matter, treats a double top or double bottom as confirmation only when it agrees with the option-market regime and the prevailing moving-average trend, not as a standalone reason to act.