BOC Rate Statement | JO Bracket Breakout

6C 03-15 (1 Min) 3.4.2015

BOC Rate Statement Comments Off

Mar 292015

3/4/2015 BOC Rate Statement / Overnight Rate (1000 EST)
Forecast: 0.75%
Actual: 0.75%
Previous Revision: n/a
TRAP TRADE – INNER TIER
Anchor Point @ 0.7983
—————-
Trap Trade:
)))1st peak @ 0.7962 – 0959:59 (1 min)
)))-21 ticks

)))Reversal to 0.8024 – 1001:25 (1 min)
)))62 ticks
—————-
Pullback to 0.8002 – 1004 (4 min)
22 ticks

Reversal to 0.8036 – 1022 (22 min)
34 ticks

Trap Trade Bracket setup:
Long entries – 0.7966 (just below the S2 Mid Pivot) / 0.7958 (in between the S2 Pivot / LOD)
Short entries – 0.7999 (in between the S1 Mid Pivot / OOD) / 0.8010 (just below the PP Pivot)

Notes: After the surprise rate cut last meeting, the BOC maintained rates at 0.75% and stated CPI inflation has fallen due to the drop in oil prices. This caused a short dip of 21 ticks 1 sec early followed by a reversal of 62 ticks in the next 82 sec. This would have filled your inner long entry with about 4 ticks to spare, then reversed and hit your opposite short entry 1 sec later for about 30-35 ticks. Be sure to cancel the order after the short entry flattens your order with the outer tiers still pending to be safe. If not the outer short entry would have filled after 13 sec, then allowed a handful of ticks to be captured in the next 30 sec before it climbed another 15 ticks (you would have been fortunate on this occasion due to the resistance of the PP Pivot). After that it pulled back 22 ticks in 2 min to the OOD before stepping higher for a 34 tick reversal in 18 min. After that it traded sideways for about an hour and continued to slowly step higher.

6C 06-15 (1 Min) 4.15.2015

BOC Rate Statement Comments Off

Apr 252015

4/15/2015 BOC Rate Statement / Overnight Rate (1000 EDT)
Forecast: 0.75%
Actual: 0.75%
Previous Revision: n/a
TRAP TRADE – OUTER TIER
Anchor Point @ 0.7972 (shift up 4 ticks to 0.7976)
—————-
Trap Trade:
)))1st peak @ 0.7991 – 0959:55 (0 min)
)))15 ticks

)))Reversal to 0.7972 – 0959:57 (0 min)
)))-19 ticks

)))Pullback to 0.8020 – 1000:06 (1 min)
)))48 ticks

)))Reversal to 0.7979 – 1000:08 (1 min)
)))-41 ticks
—————-
Final Peak @ 0.8083 – 1141 (101 min)
107 ticks

Reversal to 0.8064 – 1152 (112 min)
19 ticks

Trap Trade Bracket setup:
Long entries – 0.7961 (No SMA / Pivot near) / 0.7950 (just above the S1 Pivot / LOD)
Short entries – 0.7990 (just above the PP Pivot) / 0.8002 (just above the OOD)

Notes: After the surprise rate cut in January, the BOC maintained rates at 0.75% and stated CPI inflation has fallen and remains stable while global growth is expected to strengthen. This caused an overall long reaction that was accompanied by a few whipsaws along the way. Shift the anchor point up about 4 ticks after movement in the middle to late part of the :00 bar. We initially saw a long spike of 15 ticks to the PP Pivot that would have filled the inner short entry with 1 tick to spare. Then it backed off and chopped between the 50 SMA and PP Pivot for 6 secs. You could have exited here with 0-10 ticks or waited and seen your outer short entry fill a few sec later. The 20 tick stop would have barely contained the move, then you would have had a brief opportunity to exit with about 4 – 16 total ticks before it continued to ascend. As we recommend exiting on the early reversals and not carrying an open trade for a longer term on central bank news, exit quickly. If not you would have seen profit turn into loss, then eventually take out the stop. It continued to step higher several times until the eventual final peak of 107 total ticks after 100 min to reach the R2 Pivot, Then it reversed 19 ticks in 11 min to the R2 Mid Pivot and 50 SMA.

6C 06-15 (1 Min) 5.27.2015

BOC Rate Statement Comments Off

Jun 062015

5/27/2015 BOC Rate Statement / Overnight Rate (1000 EDT)
Forecast: 0.75%
Actual: 0.75%
Previous Revision: n/a
TRAP TRADE – DULL NO FILL
Anchor Point @ 0.8031 (shift up 7 ticks to 0.8038)
—————-
Trap Trade:
)))1st peak @ 0.8024 – 1000:08 (1 min)
)))-14 ticks

)))Reversal to 0.8045 – 1000:37 (1 min)
)))21 ticks
—————-
2nd Peak @ 0.08017 – 1003 (3 min)
21 ticks

Reversal to 0.8043 – 1020 (20 min)
26 ticks

Final Peak @ 0.8002 – 1115 (75 min)
36 ticks

Trap Trade Bracket setup:
Long entries – 0.8024 (just below the 200 SMA) / 0.8011 (just above the S2 Mid Pivot)
Short entries – 0.8051 (just above the PP Pivot) / 0.8063 (in between the R1 Mid Pivot / HOD)

Notes: After the surprise rate cut in January, the BOC continued to maintain rates at 0.75%. This resulted in a whipsaw as expected. Shift the anchor point up about 7 ticks after movement in the middle to late part of the :00 bar. We initially saw a short spike of 14 ticks to the 200 SMA that would have just fallen short of the inner long entry by 1 tick. There was an opportunity to shift the order up to get an entry just above the 200 SMA. Then it reversed 21 ticks in 29 sec to allow 15+ ticks to be captured above the OOD. After that it fell for a 2nd peak of 7 more ticks in 2 min as it crossed the 100 SMA / S1 Pivot. Then it reversed 26 ticks in 17 min to the OOD before falling for a final peak of 15 more ticks in 55 min to nearly reach the S2 Pivot.

6C 09-15 (1 Min) 7.15.2015

BOC Rate Statement Comments Off

Aug 262015

7/15/2015 BOC Rate Statement / Overnight Rate (1000 EDT)
Forecast: 0.75%
Actual: 0.50%
Previous Revision: n/a
TRAP TRADE – OUTER TIER STOPPED
Anchor Point @ 0.7814
—————-
Trap Trade:
)))1st peak @ 0.7732 – 1000:10 (1 min)
)))-82 ticks

)))Reversal to 0.7747 – 1000:59 (1 min)
)))15 ticks
—————-
Pullback to 0.7732 – 1003 (3 min)
15 ticks

Reversal to 0.7753 – 1013 (13 min)
21 ticks

Pullback to 0.7728 – 1025 (25 min)
25 ticks

Trap Trade Bracket setup:
Long entries – 0.7798 (just below the LOD) / 0.7790 (below the S3 Mid Pivot)
Short entries – 0.7831 (just above the S1 Mid Pivot) / 0.7841 (on the PP Pivot)

Notes: After the surprise rate cut in January, the BOC again surprised the market with a 25 BP cut 6 months later. This caused a large short spike of 82 ticks that would have filled both long tiers and then hit the stop for a total loss of 50 ticks. It continued to bottom as it fell another 30 ticks from the stop position. Then it reversed 15 ticks as the :01 bar expired before pulling back 15 ticks in 2 min. Then it reversed 21 ticks in 10 min to the 13 SMA before falling 25 ticks in 12 min. After that it traded sideways for the next few hours between the S4 Pivot and LOD.

6C 03-16 (1 Min) 1.20.2016

BOC Rate Statement Comments Off

Jan 262016

6C 03-16 (1 Min) 1_20_2016 6C 03-16 (Second) 1_20_2016

1/20/2016 BOC Rate Statement / Overnight Rate (1000 EST)
Forecast: 0.25% (25 BP rate cut)
Actual: 0.50%
Previous Revision: n/a
TRAP TRADE – OUTER TIER
Anchor Point @ 0.6836
—————-
Trap Trade:
))) 1st peak @ 0.6904- 1000:03 (1 min)
)))68 ticks

)))Reversal to 0.6868 – 1000:30 (1 min)
)))-36 ticks
—————-
Double Top @ 0.6904 – 1007 (7 min)
36 ticks

Reversal to 0.6875 – 1010 (10 min)
29 ticks

Pullback to 0.6896 – 1016 (16 min)
21 ticks

Reversal to 0.6827 – 1100 (60 min)
69 ticks

Trap Trade Bracket setup:
Long entries – 0.6805 (in between the LOD / S3 Mid Pivot) / 0.6782 (just above the S3 Pivot)
Short entries – 0.6866 (just above the S1 Mid Pivot/OOD) / 0.6889 (just below the R1 Mid Pivot)

Expected Fill: 0.6866 and 0.6889 (both short tiers)
Best Initial Exit: 0.6869 – 17 ticks
Recommended Profit Target placement: 0.6870 (just below the old LOD and midpoint of the spike)

Notes: The BOC failed to act to cut rates after it was expected and priced in…so the market spiked decisively long. Still with the widened settings, it would have allowed up to 17 ticks on the initial reversal. The double top is a great reversal opportunity, and the bounce off the 13 EMA at 1010 is also expected.

6C 03-14 (1 Min) 1.22.2014

BOC Rate Statement Comments Off

Jan 302014

1/22/2014 BOC Rate Statement / Overnight Rate (1000 EST)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
TRAP TRADE (DOWNWARD FAN)
Anchor Point @ 0.9101
—————-
Trap Trade:
)))1st peak @ 0.9066 – 1000:00 (1 min)
)))-35 ticks

)))Reversal to 0.9098 – 1000:10 (1 min)
)))32 ticks

)))Pullback to 0.9076 – 1000:16 (1 min)
)))-22 ticks

)))Reversal to 0.9096 – 1000:53 (1 min)
)))20 ticks

)))Pullback to 0.9075 – 1001:17 (2 min)
)))-21 ticks
—————-
Final Peak @ 0.9017 – 1148 (108 min)
84 ticks

Trap Trade Bracket setup:
Long entry – between 0.9073 and .9069 (in between the S1 and S2 Mid Pivots)
Short entry – 0.9128 (just above the R2 Pivot )

Notes: The BOC left interest rates unchanged as expected citing trying to balance the risks of disinflation and inflation. This matched the forecast of leaving the rate unchanged, and caused a downward FAN in the long term that started out with large swings that catered well to the Trap Trade. The initial reaction fell 35 ticks to hit the S2 Mid Pivot, then retreated nearly to the origin 10 sec later. This would have filled the long entry with about 3-7 ticks to spare, then given you an opportunity to exit around 0.9095 with 20+ ticks when it reversed up to the PP Pivot. It continued to repeat another 20 tick cycle, before eventually settling into a bearish move. When that becomes obvious. it would be safe to sell the reversals when it approaches the 13/20 SMAs. It achieved a total of 84 ticks in just under 2 hrs as it crossed the S3 Pivot, and never achieved more than a handful of ticks on an attempted reversal.

6C 12-13 (1 Min) 12.4.2013

BOC Rate Statement Comments Off

Dec 272013

12/4/2013 BOC Rate Statement / Overnight Rate (1000 EST)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
TRAP TRADE
Anchor Point @ 0.9362
—————-
Trap Trade:
)))Choppy Noise until 1000:16

)))1st peak @ 0.9374 – 1000:33 (1 min)
)))12 ticks

)))Reversal to 0.9345 – 1002:40 (3 min)
)))-29 ticks
—————-
Pullback to 0.9372 – 1016 (16 min)
27 ticks

Reversal to 0.9345 – 1049 (49 min)
27 ticks

Notes: The BOC left interest rates unchanged as expected citing disinflation or moderating inflation to near zero levels as a concern. This matched the forecast of leaving the rate unchanged, and caused a choppy, volatile indecisive move that triggered movement in the markets about 2 min early. The initial reaction was noise with no discernible direction until 16 sec into the bar when it broke out long for only 12 ticks to the 100 SMA, then the following reversal fell 29 ticks on the next 2 bars to the S2 Pivot. A trap trade setup of 20-30 ticks offset with a level of support/resistance was recommended. In this case, use 0.9362 as the anchor point. The midpoint between the PP Pivot and OOD at 0.9386 would be an ideal place for the short entry and about halfway between the S2 Pivot and S3 Mid Pivot at about 0.9339 would be an ideal place for the long entry. With no impulse to fill either entry after the :01 bar, cancel the order. Manual entries on the following bars would be safe to sell around the 100 SMA or buy at the S2 Pivot with stops about 5 ticks away. It ended up trading between the 50 SMA and the S2 Pivot for the next 2+ hrs until the 50 SMA fell to the S2 Pivot.

6C 12-13 (1 Min) 10.23.2013

BOC Rate Statement Comments Off

Dec 272013

10/23/2013 BOC Rate Statement / Overnight Rate (1000 EDT)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
TRAP TRADE
Anchor Point @ 0.9668
—————-
Trap Trade:
)))1st peak @ 0.9680 – 1000:02 (1 min)
)))12 ticks

)))Reversal to 0.9629 – 1000:10 (1 min)
)))-51 ticks

)))Pullback to 0.9648 – 1001:27 (2 min)
)))19 ticks
—————-
Reversal to 0.9607 – 1052 (52 min)
41 ticks

Pullback to 0.9625 – 1131 (91 min)
18 ticks

Notes: The BOC left interest rates unchanged as expected citing that the global economy continues to expand broadly as expected, but left out previous statutory language about the need for future interest rate hikes. This matched the forecast of leaving the rate unchanged, but caused a relatively decisive and short move as it was deciphered as dovish. The initial move long was only about 12 ticks to reach the S2 Mid Pivot, then the following reversal fell to cross all 3 major SMAs and reach the S3 Pivot for a total drop of 51 ticks. A trap trade setup of 20-30 ticks offset with a level of support/resistance was recommended. In this case, use the S2 Pivot at 0.9668 as the anchor point. The S1 Mid Pivot at 0.9698 would be an ideal place for the short entry and about halfway between the S3 Pivot and S3 Mid Pivot at about 0.9638 would be ideal place for the long entry. The reversal would have filled the long entry at 7 sec into the :01 bar, then you would have had 2 opportunities to exit with up to 10 ticks when it retreated to the S3 Mid Pivot while seeing no more than 9 ticks of heat. Not the best setup for the Trap Trade, but this report is the most challenging with little consistency in the size of the reactions. After the :02 bar, it achieved another reversal of 41 ticks to reach the S4 Pivot 50 min later, before giving back 18 ticks in the next 40 min to reach the 100 SMA.

6C 09-13 (1 Min) 9.4.2013

BOC Rate Statement Comments Off

Oct 232013

9/4/2013 BOC Rate Statement / Overnight Rate (1000 EDT)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
TRAP TRADE
Started @ 0.9508
—————-
Trap Trade:
)))1st peak @ 0.9522 – 1000:10 (1 min)
)))14 ticks

)))Reversal to 0.9512 – 1000:13 (1 min)
)))-10 ticks

)))Pullback to 0.9527 – 1000:56 (1 min)
)))15 ticks
—————-
Final Peak @ 0.9532 – 1004 (4 min)
24 ticks

Reversal to 0.9517 – 1010 (10 min)
15 ticks

Notes: The BOC left interest rates unchanged as expected citing that the global economy continues to expand broadly as expected, but its dynamic has moderated. This matched the forecast of leaving the rate unchanged, but caused a relatively decisive and tame long move. The initial move hit the 200 SMA, then backed off to just below the 50 SMA, and peaked above the 200 SMA, but below the R2 Pivot. A trap trade setup of 20-30 ticks offset with a level of support/resistance was recommended. In this case, use the R1 Pivot at0.9508 as the anchor point. The S1 Mid Pivot at 0.9483 would be an ideal place for the long entry and about halfway between the R2 Pivot and the HOD at about 0.9535 would be ideal place for the short entry. When the initial volatility was too tame to reach the trap settings, cancel the order after about 30 sec. After the final peak was able to achieve 24 ticks, it reversed for 15 ticks to the R2 Mid Pivot and 100 SMA, then it chopped sideways.

6C 09-13 (1 Min) 7.17.2013

BOC Rate Statement Comments Off

Jul 302013

7/17/2013 BOC Rate Statement / Overnight Rate (1000 EDT)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
TRAP TRADE
Anchor Point @ 0.9601
—————-
Trap Trade:
)))1st Peak @ 0.9552 – 0959:59 (0 min)
)))49 ticks

)))Reversal to 0.9588 – 1000:03 (1 min)
)))36 ticks
—————-
Extended Reversal to 0.9609 – 1004 (4 min)
57 ticks

Notes: The BOC left interest rates unchanged as expected and took notice of central bank action around the globe of easing and stimulus contributing to economic growth. This matched the forecast of leaving the rate unchanged, but caused an expected indecisive reaction that moved 2 sec early with an initial large short spike of 49 ticks followed by an immediate reversal of 31 ticks 4 sec later. On the short move, it crossed the S2 Mid Pivot, continued 13 ticks lower, then reversed back to the S1 Pivot quickly. The complete reversal reached the PP Pivot and crossed the 20/13 SMAs. A trap trade setup of 30 ticks offset with a level of support/resistance was recommended. In this case the S2 Mid Pivot at 0.9565 was about 35 ticks away from the center of trading activity and would have been a good place to put a buy limit order with a 20 tick stop. This would have filled easily, then given you an opportunity for 20+ ticks with ease. This was a larger breakout that normal, but the model of a quick and unsustainable spike that reverses soon after remains.

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