8/8/2013 30-yr Bond Auction (1301 EDT)
Previous: 3.66/2.3
Actual: 3.65/2.1
SPIKE/REVERSE
Started @ 134’12 (1301)
1st Peak @ 134’02 – 1302 (1 min)
10 ticks

Reversal to 134’12 – 1305 (4 min)
10 ticks

Extended Reversal to 134’16 – 1330 (29 min)
14 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 remain unchanged from the last auction, but sustained the high rise compared to previous months as the talk of tapering QE3 continues to take its toll. This caused the bonds to fall for 10 ticks, crossing no major SMAs and the R1 Pivot, nearly reaching the R1 Mid Pivot. With JOBB you would have filled short at 134’09 with no slippage, then had an opportunity to capture 6 ticks at most with ease. After the spike it reversed for 10 ticks in the next 3 min back to the 200 SMA and the origin. Then it fell to the R1 Pivot and rallied for an extended reversal of 14 ticks total about 25 min later. Then it oscillated sideways, falling for a double peak then rallying back to the 200 SMA.

9/11/2013 10-yr Bond Auction (1301 EDT)
Previous: 2.62/2.5
Actual: 2.95/2.9
SPIKE WITH 2ND PEAK
Started @ 128’22 (1301)
1st Peak @ 129’04 – 1302 (1 min)
14 ticks

2nd Peak @ 129’17 – 1336 (35 min)
27 ticks

Reversal to 129’10 – 1411 (70 min)
7 ticks

Notes: Report is scheduled on Forex Factory at the top of the hour, but the spike always breaks 1 min late. The highest yield rose strongly from the previous auction after the brief pause last month to continue the trend of significant gains in the June and July auctions. This caused the ZB to rally for relatively large 14 ticks in 2 bars, crossing the PP Pivot / 200 SMA then hitting the R1 Mid Pivot. With JOBB, you would have filled long at 128’25 with no slippage, then had an opportunity to capture up to 10 ticks on the initial move. I would place the exit just above the 200 SMA at about 128’31 for 6 ticks, given the typical yield of the report and the strong resistance level. After the initial peak, it stepped higher to a 2nd peak of 13 more ticks in about 35 min, reaching the R2 Mid Pivot. Then it reversed for 7 ticks in the next 35 min and traded sideways.

07/25/2013 7-yr Bond Auction (1301 EDT)
Previous: 1.93/2.6
Actual: 2.03/2.5
DULL REACTION
Started @ 134’03 (1301)
1st Peak @ 134’05 – 1302 (1 min)
2 ticks

Reversal to 134’01 – 1302 (1 min)
4 ticks

2nd Peak @ 134’08 – 1305 (4 min)
5 ticks

Reversal to 133’30 – 1315 (14 min)
10 ticks

Notes: Report is not found on Forex Factory, but the spike always breaks about 1:30 min late as with other bond auctions. The highest yield of 1.46 is the lowest in years, indicating high demand for the bonds with the dollar and equities unattractive. There was no impulse by 13:01:45, so we should have cancelled the order. If not, with JOBB, you would have filled long at 134’05, then seen it back off and eventually fall to the default 4 tick stop loss. A narrower stop would have reduced the loss, while a 5 tick stop loss and patience would have allowed an exit at or above break even 2 min later. After the last 2 months have caused a healthy reaction on this report, this was a bit of a disappointment. We will continue to watch this report in August.

7/10/2013 10-yr Bond Auction (1301 EDT)
Previous: 2.21/2.5
Actual: 2.67/2.6
SPIKE/REVERSE
Started @ 133’01 (1301)
1st Peak @ 132’28 – 1302 (1 min)
5 ticks

Reversal to 133’09 – 1315 (14 min)
13 ticks

Notes: Report is scheduled on Forex Factory at the top of the hour, but the spike always breaks 1 min late. The highest yield rose significantly from the previous auction again as the threat of the FED to scale back QE3 later this year continues to take its toll. This caused the ZB to spike short for only 5 ticks then retreat after only 10 sec. With JOBB you would have filled short at 132’30 with 1 tick of slippage. It had the S2 Pivot and LOD acting as support to restrict the short move. It fell 2 ticks beyond the fill point, but then pulled back. I had a 2 tick auto break even that let me out of the trade with a 1 tick loss. Try to exit with 2-3 ticks loss before it hits the 4 tick default stop. The reversal was routine gaining 13 ticks in 13 min back up to eclipse the S1 Pivot and 200 SMA. After that it backed off and traded sideways before the FOMC minutes at 1400.