08/09/2012 30-yr Bond Auction (0701 HI time / 1301 EDT)
Previous: 2.58/2.7
Actual: 2.83/2.4
SPIKE/REVERSE
Started @ 148’14 (0701)
1st Peak @ 148’05 – 0702 (1 min)
9 ticks

Reversal to 149’08 – 0751 (50 min)
35 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, to rise off of the multi-year low in July. With lessening demand for the bonds, the yield rose, and should have caused the ZB to spike long but it went short first and then reversed in the direction it should have originally gone. With JOBB you would fill short at 148’11 right on the LOD. Since it was trading close to the LOD before the auction and you have the S2 Pivot sitting just below, wait and see how it behaves as it interacts with the S2 Pivot. As it hit bottom at 148’05, 3 ticks below the S2, then bounced up, exit around 148’06 with about 5 ticks. The reversal was able to cross all 3 major SMAs and the s1 Pivot to peak at 149’08 50 min after the auction for 35 ticks. Since it went short first erroneously, this propelled it long and would have made an ideal trade.

07/12/2012 30-yr Bond Auction (0701 HI time / 1301 EDT)
Previous: 2.72/2.4
Actual: 2.58/2.7
SPIKE WITH 2ND PEAK
Started @ 152’06 (0701)
1st Peak @ 152’12 – 0703 (2 min)
6 ticks

Reversal to 152’05 – 0709 (8 min)
7 ticks

2nd Peak @ 152’16 – 0730 (29 min)
10 ticks

Reversal to 152’10 – 0750 (49 min)
6 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 of 2.58 is the lowest in years, indicating high demand for the bonds with the dollar and equities unattractive. This caused a relatively tame reaction for the bonds, as the yield rose by only 6 ticks peaking at the start of the :03 bar. With JOBB you would fill long at 152’09, just above the 200/100 SMAs, then have seen arresting upward movement as it stalled 2 ticks above the fill. With the HOD 1 tick higher, the next bar rose to touch it, then fell. Close out with 1-3 ticks as it flirts with the HOD. After the 1st peak was achieved, it retreated to the origin, then traded sideways before the :28 – :30 bars climbed to a 2nd peak of only 10 ticks. The reversal was able to retreat to the 50 SMA for 6 ticks before rising again. All in all a relatively dull auction even with the record low yield.

06/14/2012 30-yr Bond Auction (0701 HI time / 1301 EDT)
Previous: 3.09/2.7
Actual: 2.72/2.4
SPIKE/REVERSE
Started @ 149’24 (0701)
1st Peak @ 149’09 – 0705 (4 min)
15 ticks

Reversal to 149’29 – 0731 (30 min)
20 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 of 2.72 is the lowest in years, indicating high demand for the bonds with the dollar and equities unattractive. This caused a delayed but sizeable short reaction for the bonds, as the yield fell by 15 ticks, crossing all 3 major SMAs and the PP Pivot near the origin and peaking on the :05 bar. With JOBB you would fill short at 149’21, with the 200/50 SMAs above and the 100 SMA/PP Pivot below, then have seen it pull back, repelled by the PP Pivot and the 100 SMA. Be patient and ride out the 4 ticks of heat on the :03 bar, as the :04 and :05 bars dove strongly to 3 ticks below the LOD. The second attempt to cross the PP Pivot was true and had a lot more inertia. I would close out at the LOD – 149’12 for 9 ticks. The reversal was able to rebound for 20 ticks in about 25 min, encountering resistance at the SMAs.