Reports | JO Bracket Breakout

6B 03-14 (1 Min) 1.9.2014

Official Bank Rate Comments Off

Apr 092014

1/9/2014 Official Bank Rate / Asset Purchase Facility (0700 EST)
Forecast: 0.50%
Actual: 0.50%
TRAP TRADE
Started @ 1.6446 (last price)
————
Trap Trade:
1st Peak @ 1.6463 – 0700:06 (1 min)
17 ticks

Reversal to 1.6451 – 0700:15 (1 min)
-12 ticks

2nd Peak @ 1.6464 – 0701:21 (2 min)
19 ticks
————
Reversal to 1.6443 – 0714 (14 min)
21 ticks

Trap Trade Bracket setup:
Long entries – 1.6430 (just below the PP Pivot/LOD) / 1.6418 (just below the S1 Mid Pivot)
Short entries – 1.6463 (no support barrier nearby) / 1.6474 (just above the R1 Pivot)

Notes: The Bank of England left rates unchanged as expected, and the Asset Purchase Facility also remained unchanged. This caused a long move of 17 ticks at the open of the :01 bar in 6 sec, followed by a brief reversal that found support at 1.6451, just below the R1 Mid Pivot at :11 sec. Then it achieved a minor 2nd peak of 1 more tick early in the :02 bar, before pursuing a slow developing reversal in the next 12 min. You may or may not have been filled on the inner short entry as it was right on the threshold. If you were filled, since the reversal often returns to the origin, but you have the SMAs bunched up, an ideal exit would be 1.6450 on the 200 SMA for about 13 ticks. It eventually went another 7 ticks lower, but that was not a certainty, and it labored to get there.

6B 03-14 (1 Min) 2.6.2014

Official Bank Rate Comments Off

Apr 092014

2/6/2014 Official Bank Rate / Asset Purchase Facility (0700 EST)
Forecast: 0.50%
Actual: 0.50%
TRAP TRADE
Started @ 1.6278 (last price)
————
Trap Trade:
1st Peak @ 1.6315 – 0659:49 (0 min)
37 ticks

Reversal to 1.6273 – 0659:59 (0 min)
-42 ticks

Pullback to 1.6309 – 0700:24 (1 min)
36 ticks
————
Reversal to 1.6282 – 0705 (5 min)
27 ticks

Pullback to 1.6304 – 0713 (13 min)
22 ticks

Trap Trade Bracket setup:
Long entries – 1.6261 (just below the S1 Pivot) / 1.6251 (no support barrier nearby)
Short entries – 1.6296 (just above the PP Pivot) / 1.6306 (just below the OOD)

Notes: The Bank of England left rates unchanged as expected, and the Asset Purchase Facility also remained unchanged. This caused a large long move of 37 ticks in an early move that came about 15 sec early, followed by a brief reversal all the way down to 1.6273 for 42 ticks just before the :00 bar expired. Then we saw choppy movement between 1.6309 and 1.6282 until it settled down about 36 sec into the :01 bar near the PP Pivot. After one more brief attempt to push higher, it fell on the next 4 bars to the 50 SMA at 1.6282. With an average short position of 1.6301, you would have seen 9 ticks excess/heat from the outer tier fill, then seen it give you 3 opportunities to exit in the midst of the SMAs. Remember it likes to reverse to the origin, so look to exit around the 100 SMA at 1.6285 for 32 total ticks.

6B 03-14 (1 Min) 3.6.2014

Official Bank Rate Comments Off

Apr 092014

3/6/2014 Official Bank Rate / Asset Purchase Facility (0700 EST)
Forecast: 0.50%
Actual: 0.50%
TRAP TRADE
Started @ 1.6725 (last price)
————
Trap Trade:
0701 bar only moved 6 ticks away from the anchor point

1st Peak @ 1.6752 – 0701:20 (2 min)
27 ticks

Reversal to 1.6713 – 0703:44 (4 min)
-39 ticks
————
Extended Reversal to 1.6704 – 0716 (16 min)
48 ticks

Trap Trade Bracket setup:
Long entries – 1.6708 (matching the low of 0632) / 1.6699 (just below the LOD / S1 Mid Pivot)
Short entries – 1.6742 (in between the R1 and R2 Mid Pivots) / 1.6751 (just above the R2 Mid Pivot)

Notes: The Bank of England left rates unchanged as expected, and the Asset Purchase Facility also remained unchanged. This caused a delayed move that came about 75 sec late, but still would have worked. The lesson learned here is that we can safely wait for a delayed move. After a dull :01 bar, we saw a large long move of 27 ticks that peaked at 1:20, followed by a slow, tame, deliberate reversal of 39 ticks in the next 2.5 min to cross the SMAs. This would have filled both short entries with 1 tick excess/heat on the outer tier. A target of around 1.6719, on the OOD would have been prudent and safe for 53 total ticks. After a few min of struggling in the middle of the SMAs, it fell for another 9 ticks on an extended reversal to nearly reach the S1 Mid Pivot.

6J 06-14 (1 Min) 4.11.14

Prelim UoM Consumer Sentiment Comments Off

Apr 112014

4/11/2014 Prelim UoM Consumer Sentiment (0955 EST)
Forecast: 81.2
Actual: 82.6
TRAP TRADE (DULL – No Fill)
Anchor Point @ 0.0009853 (last price)
————
Trap Trade:
1st Peak @ 0.009846 – 0955:12 (1 min)
-7 ticks

Reversal to 0.009853 – 0958:23 (4 min)
7 ticks
————
2nd Peak @ 0.009843 – 1002 (7 min)
10 ticks

Reversal to 0.009860 – 1014 (19 min)
17 ticks

Trap Trade Bracket setup:
Long entries – 0.009845 (on the PP Pivot) / 0.009838 (no SMA/Pivot near)
Short entries – 0.009861 (just above the OOD) / 0.009868 (no SMA/Pivot near)

Notes: Report came in moderately higher than the forecast by 1.4 points causing a tame short impulse on the 6J for only 7 ticks as it encountered strong support near the PP Pivot (just like an hour earlier). That would have fallen short of the inner short order by 1 tick at 12 sec into the bar. As I suggested in the alert, if you see it within 1-2 ticks of the tier and stalling, moving the tier closer is a safe play. So moving the long order up to 0.009847 would have filled, then allowed for about 5 ticks to be captured on the :59 bar. After the reversal, it fell for a 2nd peak of 3 more ticks to cross the PP Pivot, then reversed for 17 ticks, crossing all 3 major SMAs and reaching the OOD 12 min later.

6J 06-14 (1 Min) 3.20.2014

Unemployment Weekly Comments Off

Apr 112014

3/20/2014 Weekly Unemployment Claims (0830 EDT)
Forecast: 327K
Actual: 320K
TRAP TRADE (DULL REACTION)
Anchor Point @ 0.009772 (last price)
————
Trap Trade:
0831 bar span 0.009771 – 0.009768 (1 min)
3 ticks
————

Trap Trade Bracket setup:
Long entries – 0.009764 (just below the 100 SMA) / 0.009754 (just below the LOD)
Short entries – 0.009781 (no SMA/Pivot near) / 0.009790 (just above the HOD)

Notes: Report came in strong but close to the forecast with 7K less jobs than the forecast with no other news. This caused a dull 0831 bar of only 3 ticks movement on the OOD and 13 SMA. Cancel the order with no impulse after 20 sec. It eventually drifted a few ticks down to hit the 200 SMA, then bounced for about 10 ticks in 9 min.

6A 06-14 (1 Min) 3.17.2014

RBA Monetary Meeting Minutes Comments Off

Apr 112014

3/17/2014 RBA Monetary Policy Meeting Minutes (2030 EDT)
Forecast: n/a
Actual: n/a
TRAP TRADE
Started @ 0.9038 (last price)
—————-
Trap Trade:
1st peak @ 0.9028 – 2030:24 (1 min)
-10 ticks

Reversal to 0.9055 – 2031:18 (2 min)
27 ticks
—————-
Pullback to 0.9046 – 2033 (3 min)
9 ticks

Reversal to 0.9053 – 2035 (5 min)
7 ticks

Pullback to 0.9029 – 2041 (11 min)
24 ticks

Trap Trade Bracket setup:
Long entries – 0.9029 (just below the 100/200 SMAs) / 0.9023 (just below the S1 Mid Pivot)
Short entries – 0.9048 (just below the R2 Mid Pivot) / 0.9054 (just below the R2 Pivot)

Notes: Minutes caused a short reaction that fell 10 ticks 24 sec into the :31 bar, crossing the 100/200 SMAs, then reversed back 27 ticks in the next min to eclipse the R2 Pivot. Due to the Cash Rate from 2 weeks ago causing an indecisive reaction that fell short followed by a long reaction, we advised holding onto a long entry for a while to expect it to carry into a large move. Your inner long entry would have filled, with only a tick excess. Then it would have reversed allowing around 20-25 or so ticks to be captured easily on the :32 bar above the R2 Mid Pivot. After that it chopped a but in the next 3 bars before falling about 24 ticks to cross the 100/200 SMAs again. The overall reaction matched the framework of the Cash Rate as usual.

6E 06-14 (1 Min) 3.18.2014

German Zew Economic Sentiment Comments Off

Apr 112014

3/18/2014 German ZEW Economic Sentiment (0600 EDT)
Forecast: 52.8
Actual: 46.6
TRAP TRADE (SPIKE WITH 2ND PEAK)
Anchor Point @ 1.3911 (last price)
————
Trap Trade:
1st Peak @ 1.3894 – 0600:09 (1 min)
-17 ticks

Reversal to 1.3900 – 0600:20 (1 min)
6 ticks
————
2nd Peak @ 1.3888 – 0605 (5 min)
23 ticks

Reversal to 1.3902 – 0612 (12 min)
14 ticks

Extended Reversal to 1.3913 – 0632 (32 min)
25 ticks

Trap Trade Bracket setup:
Long entries – 1.3901 (below the LOD) / 1.3892 (just below the S1 Pivot)
Short entries – 1.3921 (just above the PP Pivot/OOD) / 1.3928 (No SMA/Pivot near)

Notes: Report strongly fell short of the forecast by 6.2 points. This caused a short move of 17 ticks initially that crossed the 100/50 SMAs and nearly reached the S1 Pivot, then a reversal of 6 ticks before it slowly settled down for a 2nd peak of another 6 ticks as it crossed the S1 Pivot. This was a good setup of the Trap Trade and a good lesson. The inner long entry would have filled instantly then you would have been riding between 1-5 ticks of heat for most of the next 2 bars. Since this report always reverses to the origin, we advise waiting it out. The secondary push lower would have filled your outer long entry making your average position about 1.3896. With the origin at 1.3911, move your target down to be on the 200 SMA, and look for 15 ticks (30 total ticks). It took over 30 min, but it got there with the long delay attributed to the large offset.

HG 05-14 (1 Min) 3.23.2014

HSBC Flash Manufacturing PMI Comments Off

Apr 122014

3/23/2014 CNY HSBC Flash Manufacturing PMI (2145 EDT)
Forecast: 48.7
Actual: 48.1
Previous Revision: +0.2 to 48.5
SPIKE WITH 2ND PEAK
Started @ 2.9375
1st Peak @ 3.9260 – 2147 (2 min)
23 ticks

Reversal to 2.9315 – 2147 (2 min)
11 ticks

2nd Peak @ 2.9210 – 2148 (3 min)
33 ticks

Reversal to 2.9390 – 2244 (59 min)
36 ticks

Notes: Report disappointed the traders, with a small previous report upward revision. This caused a short spike of 23 ticks that started on the S2 Mid Pivot and fell to cross the S2 Pivot and LOD early into the :47 bar. With JOBB, you would have filled short at 2.9350 with about 2 ticks of slippage. A 10 tick profit target would have filled in seconds. Otherwise you would have seen a retracement to your fill point and another fall following for 6 more ticks. Look to exit hear for up to 15 ticks. After that it reversed for 11 ticks to the S2 Pivot before falling for a 2nd peak of another 10 ticks in the :48 bar. Then it reversed for 36 ticks in the next 55 min back to the S2 Mid Pivot and origin.

We also recommended the 6A as an alternative to the HG with limit orders using 10 as the slippage setting. It saw a spike of 34 ticks, but the slippage would have averaged 13 so we would not have filled.

6J 06-14 (1 Min) 3.26.2014

Durable Goods Comments Off

Apr 122014

3/26/2014 Monthly Durable Goods Orders (0830 EST)
Core Forecast: 0.3%
Core Actual: 0.2%
Previous revision: -0.2% to 0.9%
Regular Forecast: 1.1%
Regular Actual: 2.2%
Previous Revision: -0.3% to -1.3%
TRAP TRADE
Anchor Point @ 0.009750 (last price)
————
Trap Trade:
1st Peak @ 0.009750 – 0830:01 (1 min)
-20 ticks

Reversal to 0.009772 – 0831:05 (2 min)
22 ticks
————
Extended Reversal to 0.009776 – 0834 (4 min)
26 ticks

Pullback to 0.009766 – 0849 (19 min)
10 ticks

Trap Trade Bracket setup:
Long entries – 0.009758 (just above the S2 Mid Pivot) / 0.009750 (just above the S2 Pivot)
Short entries – 0.009782 (just below the OOD/HOD) / 0.009789 (No SMA/Pivot near)

Notes: Report came in mixed with the core reading nearly matching the forecast, while the regular reading exceeded the forecast by 1.1%. With the mixed news, this caused a large unsustainable short move of 20 ticks that nearly reached the S2 Pivot and returned to the origin. With the Trap Trade, you would have filled long at 0.009758, but the outer tier would have missed. Then you would have ssen it retreat quickly to give you an immediate 8 ticks of profit. If you were a little patient, you could have captured up to 14 ticks with ease just after the :31 bar expired. After it continued upward for 4 more ticks, it pulled back for 10 ticks to the S1 Pivot in about 15 min.

ZB 06-14 (1 Min) 3.20.2014

Philly FED Manufacturing Index Comments Off

Apr 122014

3/20/2014 Monthly Philly FED Manufacturing Index (1000 EST)
Forecast: 4.2
Actual: 9.0
Previous revision: n/a
SPIKE / REVERSE
Started @ 131’30
1st Peak @ 131’24 – 1002 (2 min)
6 ticks

Reversal to 132’07 – 1108 (68 min)
15 ticks

Extended Reversal to 132’10 – 1150 (110 min)
18 ticks

Notes: Report exceeded the forecast with a delta of 4.8 pts, causing a short spike on the ZB that started on the 100 SMA and S1 Mid Pivot, then fell to cross the LOD for 6 ticks on the :01 and :02 bars. With JOBB, your order would have short at 131’26 with 2 ticks of slippage, then it would have stayed within 1 tick of your fill for over a minute. Look to exit with 1 tick on the :01 or :02 bar. After the extension of the LOD, it reversed for 15 ticks in the next 66 min, crossing all 3 major SMAs and the S1 Pivot. Then after a brief pullback, it climbed another 3 ticks about 40 min later to the PP Pivot.

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