Reports | JO Bracket Breakout

6J 03-14 (1 Min) 3.6.2014

Factory Orders Comments Off

Mar 252014

3/6/2014 Monthly Factory Orders (1000 EST)
Forecast: -0.4%
Actual: -0.7%
Previous Revision: -0.5% to -2.0%
DULL REACTION (No FILL)
Started @ 0.009701
1st Bar span 0.009700 – 0.009702 – 1001 (1 min)
+/- 1 ticks

Notes: Report came in lower than the forecast with a weak reading coupled with a sizeable downward revision to the previous report. This caused a dull reaction that spanned only +/- 1 ticks from the origin. It did have a delayed reaction on the :02 – :05 bars for about 9 ticks, but be safe and cancel the order with no fill after 10 sec.

6C 03-14 (1 Min) 3.5.2014

BOC Rate Statement Comments Off

Mar 252014

3/5/2014 BOC Rate Statement / Overnight Rate (1000 EST)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
TRAP TRADE (SPIKE / REVERSE)
Anchor Point @ 0.9027
—————-
Trap Trade:
)))1st peak @ 0.9001 – 1000:08 (1 min)
)))-26 ticks

)))Reversal to 0.9028 – 1000:25 (1 min)
)))27 ticks

)))Pullback to 0.9006 – 1000:58 (1 min)
)))-22 ticks
—————-
Reversal to 0.9064 – 1022 (22 min)
58 ticks

Trap Trade Bracket setup:
Long entry – about 0.9002 (25 ticks from anchor and in between the PP and S1 Mid Pivots)
Short entry – 0.9052 (just above the R2 Pivot )

Notes: The BOC left interest rates unchanged as expected with little surprising in the comments. This matched the forecast of leaving the rate unchanged, and caused an unsustainable short spike that catered well to the Trap Trade. The initial reaction fell 26 ticks to cross all 3 major SMAs and the PP Pivot and hit the long entry with 1 tick to spare for a perfect entry. The quick reversal 17 sec later would have given you an opportunity to exit around 0.9022 with about 20 ticks when it collided with the SMAs. After that it fell again to the PP Pivot, then reversed for 58 ticks in the next 21 min slowly but deliberately as it crossed the R2 Pivot and extended the HOD.

CL 04-14 (1 Min) 3.5.2014

Oil Inventory Comments Off

Mar 252014

3/5/2014 Weekly Crude Oil Inventory Report (1030 EST)
Forecast: 1.33M
Actual: 1.43M
Gasoline
Forecast: -1.18M
Actual: -1.60M
Distillates
Forecast: -1.22M
Actual: 1.41M
SPIKE WITH 2ND PEAK
Started @ 102.75
1st Peak @ 102.55 – 1031 (1 min)
20 ticks

Reversal to 102.81 – 1032 (2 min)
26 ticks

2nd Peak @ 101.92 – 1049 (19 min)
83 ticks

Reversal to 102.31 – 1101 (31 min)
39 ticks

Notes: Nearly matching modest gain in inventories, while gasoline saw a slightly larger modest draw when a smaller modest draw was expected, and distillates saw a modest gain when a modest draw was expected. The mixed news and minimal offset on the crude and gas caused a tame short reaction of only 20 ticks on the :31 bar that was unsustained. With JOBB and a 10 tick buffer, you would have filled short at 102.66 with no slippage, then seen it give you a quick opportunity to capture about 5-8 ticks, before retreating beyond the origin. After the reversal, it fell again for a larger 2nd peak of 63 more ticks in the next 19 min, crossing the S2 Pivot and extending the LOD. Then it reversed for 39 ticks back to the S2 Pivot in the next 12 min. After that it traded sideways underneath the S2 Pivot.

CL 04-14 (1 Min) 3.5.2014

Beige Book Comments Off

Mar 262014

3/5/2014 FED Beige Book (1400 EST)
Forecast: n/a
Actual: n/a
DULL REACTION (No Fill)
Started @ 101.58
Movement between 1401 and 1404 bars spanned 101.55 – 101.60.

1st Peak @ 101.29 – 1406 (6 min)
29 ticks

Reversal to 101.42 – 1409 (9 min)
13 ticks

2nd Peak @ 101.22 – 1415 (15 min)
36 ticks

Reversal to 101.54 – 1425 (25 min)
32 ticks

Notes: The Federal Reserve said today that economic activity continued to expand at a moderate pace during the reporting period of January to early February. Eight Districts reported moderate growth rates in economic activity as during the previous reporting period, while modest declines were reported for the Midwest and Northeast regions being attributed to the cold weather. The DX had minimal movement, and mostly chopped sideways. This resulted in only a narrow range of 5 ticks in the first 4 bars, so cancel the order with JOBB after 2 min. It eventually caused a reaction on the :05 bar for a 1st peak of 29 ticks in 2 min. After that it reversed for 13 ticks in the next 3 min before achieving a 2nd peak of 7 more ticks. Then it reversed for 32 ticks in the next 10 min.

6A 03-14 (1 Min) 3.5.2014

Monthly Retail Sales, Monthly Trade Balance Comments Off

Mar 272014

3/5/2014 Monthly Retail Sales / Trade Balance (1930 EST)
Rtl Sales
Forecast: 0.5%
Actual: 1.2%
Previous Revision: +0.2% to 0.7%
Trade Bal
Forecast: 0.11B
Actual: 1.43B
Previous Revision: +0.12B to 0.59B
TRAP TRADE (STOPPED OUT)
Anchor Point @ 0.8980 (last price)
————
Trap Trade:
1st Peak @ 0.9023 – 1930:10 (1 min)
43 ticks

Reversal to 0.9008 – 1930:42 (1 min)
-15 ticks
————
2nd Peak @ 0.9028 – 1933
48 ticks

Reversal to 0.9013 – 1948 (18 min)
15 ticks

Trap Trade Bracket setup:
Long entries – 0.8966 (between the LOD and the S1 Mid Pivot) / 0.8956 (just below the S1 Pivot)
Short entries – 0.8997 (just below the R2 Mid Pivot) / 0.9006 (just above the R2 Pivot)

Notes: Retail Sales report had the highest reading and largest offset since April 2013 with a decent upward previous revision, while the Trade Balance report also strongly exceeded the forecast by 1.3B with the highest reading since Feb 2012, coupled with a moderate upward previous report revision. The combination of unusually strong news caused a large decisive bullish spike of 43 ticks that had strong conviction in its climb and sustained the move. Your inner and outer tier short entries would have filled with about a second gap, then you would have been stopped with about 16 ticks with both entries with 1 tick of slippage for a combined 32 tick loss. Though this result was unfortunate, it was a rare extraordinary result and had a low probability of outcome. Still we will adjust the approach to trading combined resports such as this to just use 1 tier in the future to mitigate the risk and hedge the loss. After the peak was reached in 10 sec, it backed off 15 ticks in the next 30 sec, before achieving a 2nd peal of 5 more ticks on the :33 bar as it was flirting with the R3 Mid Pivot. Then it reversed for 15 ticks back to first impact the 13/20 SMAs. When this happens, it is a good place to buy the dip and look to get 10 or so ticks. This would have worked nicely as it achieved a double top about 41 min after the report. Then it traded sideways near the R3 Mid Pivot as volume dried up.

6J 03-14 (1 Min) 3.6.2014

Unemployment Weekly Comments Off

Mar 272014

3/6/2014 Weekly Unemployment Claims (0830 EST)
Forecast: 336K
Actual: 323K
TRAP TRADE
Anchor Point @ 0.009721 (last price)
————
Trap Trade:
)))1st Peak @ 0.009694 – 0830:01 (1 min)
)))-27 ticks

)))Reversal to 0.009714 – 0830:45 (1 min)
)))20 ticks
————
Double Bottom @ 0.009694 – 0901 (31 min)
27 ticks

Reversal to 0.009713 – 1023 (113 min)
19 ticks

Trap Trade Bracket setup:
Long entries – 0.009710 (just above the S3 Pivot) / 0.009701 (no SMA/Pivot near)
Short entries – 0.009731 (just below the 20 SMA) / 0.009740 (just above the S2 Pivot)

Notes: Report came in strong with 13K less jobs than the forecast. This caused a large short unsustainable spike of 27 ticks departure from the anchor point as it crossed the S3 Pivot and hit the S4 Mid Pivot. The short move would have filled both tiers of the long entries at 0.009710 and 0.009701, then fallen an additional 7 ticks before retreating to surrender most of the drop. With an average position long position of 0.009705, look to exit en between 0.009712 and 0.009714 with about 14 – 18 total ticks when it hovered in the middle of the :31 bar. After the :31 bar, it trickled down to a double bottom after 30 min on the S4 Mid Pivot again before reversing for 19 ticks in the next 80 min, crossing the S3 Pivot.

ZB 06-14 (1 Min) 3.7.2014

Unemployment Non-Farm Monthly Comments Off

Mar 272014

3/7/2014 Monthly Unemployment Report (0830 EST)
Non Farm Jobs Forecast: 151K
Non Farm Jobs Actual: 175K
Previous Revision: +16K to 129K
Rate Forecast: 6.6%
Rate Actual: 6.7%
SPIKE / REVERSE
Started @ 132’02
1st Peak @ 130’20 – 0832 (2 min)
46 ticks

Reversal to 131’00 – 0836 (6 min)
12 ticks

Notes: Impressive report showing 24K more jobs created than expected, a moderarw previous upward revision of 16K jobs, and a 0.1% increase in the unemployment U-3 rate as more people are looking for work. This caused a large decisive short move of 46 ticks on the :31 and :32 bars. It fell to cross all 3 major SMAs and the S4 Mid Pivot at the bottom of the spike while extending the LOD. With JOBB, you would have filled short at about 132’18 with abnormally high 13 ticks of slippage, then seen it continue to fall to about 131’03 where it first slowed. It eventually ratcheted down to 130’20 allowing up to 30 ticks to be captured even with the high slippage. The conservative recommendation in the alert of 15 ticks would have easily filled. After the peak, it reversed for 12 ticks in the next 4 bars back to the S3 Pivot. Then it traded sideways mostly in between the S3 and S4 Mid Pivots for the next hour.

ZB 06-14 (1 Min) 3.12.2014

10y Bond Auction Comments Off

Mar 272014

3/12/2014 10-yr Bond Auction (1301 EDT)
Previous: 2.80/2.5
Actual: 2.73/2.9
TRAP TRADE
Anchor Point @ 132’02 (1301)
————
Trap Trade:
)))1st Peak @ 132’07 – 1301:43 (1 min)
)))5 ticks

)))Reversal to 132’04 – 1302:35 (2 min)
)))3 ticks
————
2nd Peak @ 132’09 – 1315 (14 min)
7 ticks

Reversal to 132’03 – 1408 (67 min)
6 ticks

Trap Trade Bracket setup:
Long entries – 131’30 (no SMA/Pivot near) / 131’27 (just below the R2 Pivot)
Short entries – 132’06 (just above the R3 Mid Pivot ) / 132’10 (no SMA/Pivot near)

Notes: Report is scheduled on Forex Factory at the top of the hour, but the spike always breaks 1 min late. The highest yield continued to fall after topping 3.00 in January. This caused the ZB to pop long for 5 ticks, then back off and hover between 2-4 ticks near the R3 Mid Pivot. This would have filled your inner short entry at 132’06 with 1 tick to spare, then allowed an exit between breakeven and +2 ticks as it hovered. This is a situation where the prudent play is to exit safely with what the market is yielding. When it tried to reverse for 10 min and was unable to fall below 132’04, do not get greedy. After the reversal, it achieved a minor 2nd peak of 2 more ticks after 10 min, then reversed for 6 ticks to the 200 SMA.

ZB 06-14 (1 Min) 3.13.2014

30y Bond Auction Comments Off

Mar 272014

3/13/2014 30-yr Bond Auction (1301 EST)
Previous: 3.69/2.3
Actual: 3.63/2.4
SPIKE / REVERSE
Started @ 133’06 (1301)
1st Peak @ 132’30 – 1302 (1 min)
8 ticks

Reversal to 133’10 – 1310 (9 min)
12 ticks

Notes: Report is scheduled on Forex Factory at the bottom of the hour, but the spike always breaks 1 min late. The highest yield fell moderately from last month and was consistent with the 10-y auction the day before. This caused the bonds to fall for 8 ticks as it crossed the R3 Mid Pivot and hit the 100 SMA. It was briefly sustained and left 6 ticks on the wick naked when the bar expired. With JOBB you would have filled short at 133’03 with 1 tick of slippage, then had an opportunity to capture only about 2-3 ticks as it did not linger near the bottom for more than 5 sec. Then it bobbed between 133’07 and 133’02 and eventually reversed up for a total of 12 ticks on the :10 bar. Then it backed off and traded sideways mostly above the R3 Mid Pivot.

CL 04-14 (1 Min) 3.12.2014

Oil Inventory Comments Off

Mar 272014

3/12/2014 Weekly Crude Oil Inventory Report (1030 EST)
Forecast: 2.15M
Actual: 6.18M
Gasoline
Forecast: -2.03M
Actual: -5.23M
Distillates
Forecast: -0.87M
Actual: -0.53M
SPIKE WITH 2ND PEAK
Started @ 98.51
1st Peak @ 98.20 – 1032 (2 min)
31 ticks

Reversal to 98.91 – 1044 (14 min)
71 ticks

Pullback to 98.51 – 1052 (22 min)
40 ticks

Reversal to 98.97 – 1101 (31 min)
46 ticks

2nd Peak @ 98.12 – 1116 (46 min)
39 ticks

Notes: Large gain in inventories when a moderate gain was expeced, while gasoline saw a large draw when a moderate draw was expected, and distillates saw a modest draw when a slightly larger modest draw was expected. The mixed news and large draw on gas with large gains on crude indicate refinery capacity is strong. This caused a short reaction of 31 ticks that crossed the 200 SMA and S3 Mid Pivot near the origin, then failed to reach the LOD as it found support at the same level as the low on the 0927 bar. With JOBB and a 10 tick buffer, you would have filled short at 98.41 with no slippage, then seen it give you an opportunity to capture about 10 ticks when it hovered near the low. Then it reversed for 71 ticks in the next 12 min before falling to the 200 SMA 8 min later for 40 ticks. Then it reversed for 46 ticks 9 min later, before falling for a 2nd peak of 8 more ticks that reached the LOD. After that it continued to step lower for the next 45 min.

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