3/6/2013 BOC Rate Statement / Overnight Rate (1000 EST)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
INDECISIVE – KNIFE SWITCH
Started @ 0.9720
1st Peak @ 0.9728 – 1001 (1 min)
8 ticks
Reversal to 0.9675 – 1001 (1 min)
-53 ticks
Pullback to 0.9707 – 1145 (105 min)
32 ticks
Notes: The BOC left interest rates unchanged and cited gradual growth in the US, continued recession in Europe, and stabilizing growth in China. This matched the forecast of leaving the rate unchanged, but caused an indecisive reaction with an initial long spike of 8 ticks followed by an immediate reversal of 53 ticks. The initial long move was small and abnormal, but will be cause for us to increase the bracket size on the next report. On the long move, it crossed all 3 major SMAs and eclipsed the PP Pivot, then it reversed to cross the S1 / S2 Pivots and extend the LOD by 34 ticks. With JOBB, you would have filled long with 1 tick of slippage at 0.9726, then seen it reverse and fill the opposite bracket entry immediately, testing the knife switch. In my case, trading 6 contracts, I had 2 short stop loss contracts present on the chart, while 4 were killed by logic and all of the 6 long entries were killed. The additional short entries worked in my favor as they shorted at 0.9713, and I exited at 0.9682 for 31 ticks. More than likely less contracts would have had no additional stop loss orders apply, but possibly short only which would have benefited. After the big drop, it slowly pulled back up to 0.9707 in the next 105 min to cross the 50/100 SMAs and reach the 200 SMA.