US Reports | JO Bracket Breakout

ZB 03-14 (1 Min) 2.3.2014

ISM Manufacturing PMI Comments Off

Feb 222014

2/3/2014 Monthly ISM Manufacturing PMI (1000 EST)
Forecast: 56.2
Actual: 51.3
Previous revision: n/a
SPIKE WITH 2ND PEAK
Started @ 133’22
1st Peak @ 134’06 – 1001 (1 min)
16 ticks

2nd Peak @ 134’15 – 1014 (14 min)
25 ticks

Reversal to 134’06 – 1048 (48 min)
9 ticks

Notes: Report came in very weak, with a result nearly 5 points below the forecast causing a large bullish reaction. We saw a long spike of 16 ticks on the :01 bar that started on the 50 SMA / PP Pivot and crossed the R2 Pivot. With JOBB, you would have filled long at 133’26 with 1 tick of slippage, then seen it hit the R2 Pivot and hover in that area for the rest of the bar. I used a 10 tick target that filled instantly. After a small pullback, it continued to climb for another 9 ticks in the next 13 min, crossing the R3 Mid Pivot. After that it reversed 9 ticks back to the 1st peak area, crossing the 50 SMA and nearly reaching the R2 Pivot in 34 min. Then it rebounded and slowly edged higher in the next few hours.

ZB 03-14 (1 Min) 1.29.2014

FOMC Statement Comments Off

Feb 162014

1/29/2014 FOMC Statement / FED Funds Rate (1400 EST)
Forecast: n/a
Actual: n/a
INDECISIVE
Started @ 133’00 (1400)
1st Peak @ 132’25 – 1401 (1 min)
7 ticks

Reversal to 133’02 – 1401 (1 min)
9 ticks

2nd Peak @ 132’22 – 1405 (5 min)
10 ticks

Reversal to 133’14 – 1423 (23 min)
24 ticks

Extended Reversal to 133’24 – 1515 (75 min)
34 ticks

Notes: The FED chose to continue tapering QE3 by $10B as expected down to $65B a month, saying they will continue to monitor the economy and labor sectors while also saying they do not want to be seen as reacting to every gyration in financial markets. This caused an indecisive scenario that resulted in 8-10 tick swings in the first bar. With JOBB, you would have filled short at about 132’26 with 1 tick of slippage, then seen it reverse to stop you out with a 5 tick loss with no slippage. Now that we are in the phase of tapering and the FED will not be shocking the market too much, we will probably shift this to a trap trade in the future short term. The next 3 bars continued to swing between the SMAs and the R1 Pivot, before it achieved a minor 2nd peak of 3 more ticks. Then it reversed for a choppy 24 ticks in the next 18 min to the R3 Mid Pivot. After that it pulled back and extended the reversal for another 10 ticks in the next 50 min, crossing the R3 Pivot.

ZB 03-14 (1 Min) 1.30.2014

Advance GDP Comments Off

Feb 162014

1/30/2014 Quarterly Advance GDP (0830 EST)
Forecast: 3.3%
Actual: 3.2%
Previous Revision: +1.3% to 4.1%
TRAP TRADE (DULL – NO FILL)
Anchor Point @ 133’08 (last price and 50 SMA position)
————
Trap Trade:
1st Peak @ 133’13 – 0830:04 (1 min)
5 ticks

Reversal to 133’08 – 0830:17 (1 min)
-5 ticks
————
Double top @ 133’13 – 0833 (3 min)
5 ticks

Reversal to 133’03 – 0836 (6 min)
10 ticks

Trap Trade Bracket setup:
Long entries – 132’30 (just above the S1 Mid Pivot) / 132’23 (just above the S1 Pivot)
Short entries – 133’17 (just above the R1 Mid Pivot/ on the OOD) / 133’25 (no SMA/Pivot within 3 ticks)

Notes: Report came in nearly matching with a slightly disappointing reading. This coupled with the greater than expected unemployment claims caused a decisive, but muted long spike of only 5 ticks. It was restricted in its upward trajectory by crossing the 100/200 SMAs. As this was inside of the inner tier short entry by a healthy margin of 4 ticks, cancel the order after 10 sec. As we watched it retreat back to the origin in 17 sec, we noted the trap trade approach is still valid as a model and greater divergence on the reading would have likely worked out in our favor. After the initial bar, it was able to achieve a double top on the :33 bar, then reversed for 10 ticks to eclipse the PP Pivot.

ZB 03-14 (1 Min) 1.30.2014

7y Bond Auction Comments Off

Feb 162014

1/30/2014 7-yr Bond Auction (1301 EST)
Previous: 2.39/2.5
Actual: 2.19/2.7
SPIKE WITH 2ND PEAK
Started @ 133’01 (1301)
1st Peak @ 133’05 – 1303 (2 min)
4 ticks

Reversal to 133’02 – 1305 (4 min)
3 ticks

2nd Peak @ 133’07 – 1308 (7 min)
6 ticks

Reversal to 133’01 – 1330 (30 min)
6 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 2.19 fell back a bit after a high of 2.39 in December now that tapering has started. This caused a typical slow but safe move that would have yielded 1-2 ticks initially as it eclipsed the PP Pivot. With JOBB, your long entry would have filled at 133’03 with no slippage late in the :02 bar then given you 1-2 ticks of profit on the :03 bar. After a small reversal, it climbed for a 2nd peak of 2 more ticks in the next 5 min. If you decide to wait for a 2nd peak or have a secondary profit target, an exit at 133’06 or 07 would have been available. After that it reversed for 6 ticks back to the origin 23 min later, crossing the 50 SMA and reaching the 200 SMA.

CL 03-14 (1 Min) 1.29.2014

Oil Inventory Comments Off

Feb 172014

1/29/2014 Weekly Crude Oil Inventory Report (1030 EST)
Forecast: 2.34M
Actual: 6.42M
Gasoline
Forecast: 1.13M
Actual: -0.82M
Distillates
Forecast: -2.23M
Actual: -4.58M
SPIKE / REVERSE
Started @ 96.71
1st Peak @ 96.32 – 1031 (1 min)
39 ticks

Reversal to 96.70 – 1032 (2 min)
38 ticks

Pullback to 96.45 – 1032 (2 min)
25 ticks

Reversal to 97.32 – 1041 (11 min)
87 ticks

Pullback to 96.88 – 1053 (23 min)
44 ticks

Notes: Large gain in inventories when a moderate gain was expected, while gasoline saw a modest draw when a modest gain was expected and distillates saw a healthy draw when a moderate draw was expected. Even though divergent, these numbers indicate an excessive refinery capacity that produced far more products than expected and the draw on distillates was not surprising due to the extreme cold weather. With the results being divergent it was a bit more chaotic than recent reactions, but still safe. The gains on the crude won the influence battle initially with a 39 tick short spike that crossed the S1 Pivot and LOD on the :31 bar. With JOBB and a 10 tick buffer, you would have filled short at 96.59 with 2 ticks of slippage, then seen it chop to reach a low of 96.32 in the opening seconds. You would have had an opportunity to capture up to 25 ticks up to 18 sec into the :31 bar. If you waited, your stop loss would have been safe until the :34 bar, but opportunities for profit would have been rarer. After the peak, the :32 bar attempted to test the support again, but failed before the product draws took over to rally the CL. It reversed for 87 ticks in about 10 min in a dramatic move. Then it pulled back for 44 ticks to trade near the 200 SMA.

6J 03-14 (1 Min) 1.28.2014

Durable Goods Comments Off

Feb 122014

1/28/2014 Monthly Durable Goods Orders (0830 EST)
Core Forecast: 0.7%
Core Actual: -1.6%
Previous revision: n/a
Regular Forecast: 1.9%
Regular Actual: -4.3%
Previous Revision: -0.1% to 3.4%
TRAP TRADE (LOSS – SPIKE WITH 2ND PEAK)
Anchor Point @ 0.0009701 (last price and the S2 Mid Pivot)
————
Trap Trade:
1st Peak @ 0.009716 – 0830:01 (1 min)
15 ticks

Hovered near 0.009717 – 0830:20 (1 min)

2nd Peak @ 0.009728 – 0831:12 (2 min)
27 ticks
————
Final Peak @ 0.009746 – 0841 (11 min)
45 ticks

Reversal to 0.009726 – 0901 (31 min)
20 ticks

Trap Trade Bracket setup:
Long entries – 0.009689 (on the S2 Pivot) / 0.009683 (just below the LOD)
Short entries – 0.009713 (just above the S1 Pivot ) / 0.009720 (no SMA/Pivot within 10 ticks)

Notes: Report came in solidly bearish overall to be the worst setup for the new official trap trade. This caused a quick pop upward for 15 ticks in 1 sec, crossing the S1 Pivot and 100/50 SMAs. With the Trap Trade, you would have filled short at 0.009713, then seen it hover about 4 ticks above the peak for 20 sec. If you noticed the results and perceived that they were consistent and strongly bearish, the wise play would be to exit with a few ticks loss since the likelihood of a quick reversal is small. After the hovering, it jumped up another 12 ticks for a 2nd peak early on the :32 bar which would have filled the outer tier short order with no intervention, Then the stop for the average position would have been taken for a 12 tick loss. It continued to slowly edge higher without any noticeable reversal as it achieved a final peak of 45 ticks after 10 min, nearly reaching the OOD. Then it reversed for 20 ticks in the next 20 min, crossing the S1 Mid Pivot and nearly reaching the 50 SMA.

6J 03-14 (1 Min) 1.28.2014

CB Consumer Confidence Comments Off

Feb 122014

1/28/2014 Monthly CB Consumer Confidence (1000 EST)
Forecast: 78.3
Actual: 80.7
Previous revision: -0.6 to 77.5
SPIKE WITH 2ND PEAK
Started @ 0.009731
1st Peak @ 0.009720 – 1001 (1 min)
11 ticks

2nd Peak @ 0.009710 – 1004 (4 min)
21 ticks

Reversal to 0.009724 – 1029 (29 min)
14 ticks

Notes: Report exceeded the forecast by a small margin of 2.4 points. This caused a 11 tick short spike on the :01 bar that was tame and sustained, as it started on the falling 13 SMA, and ran out of momentum just before reaching the 200 SMA. With JOBB you would have filled short at 0.009725 with 2 ticks of slippage, then seen it fall a few more sticks and stall at about +4 ticks. With the 200 SMA looming lower, you would be safe to grab a few ticks and exit at about 0.009721. Without much of a reversal, it continued lower for another 10 ticks on the next 3 bars, crossing the 200 SMA and the S1 Pivot. After that it reversed for 14 ticks in the next 25 min, as it reached the 50 SMA.

6J 03-14 (1 Min) 1.17.2014

Building Permits / Housing Starts Comments Off

Feb 082014

1/17/2014 Monthly Building Permits / Housing Starts (0830 EST)
Building Permits
Forecast: 1.01M
Actual: 0.99M
Previous revision: +0.01M to 1.02M
Housing Starts
Forecast: 0.99M
Actual: 1.00M
Previous revision: +0.02M to 1.11M
DULL REACTION (FILL)
Started @ 0.009583
1st Peak @ 0.009579 – 0831 (1 min)
4 ticks

Reversal to 0.009591 – 0836 (6 min)
12 ticks

Extended Reversal to 0.009599 – 0905 (35 min)
20 ticks

Notes: Report was matching overall with the BLDG Permits slightly falling short and the Housing starts slightly exceeding the forecast. This caused a muted 4 tick short move that eclipsed the 100/200 SMAs, then pulled back. With JOBB, you would have filled short at 0.009580 with no slippage, then seen it get stuck between breakeven and -1 tick for most of the bar. Due to the matching report and strong support barrier, look to exit with 1 tick loss. After the peak, it reversed for 12 ticks in 6 min and another 8 ticks 30 min later, as it crossed the R1 Mid Pivot. Then it fell back to the 200 and PP Pivot 15 min later.

6J 03-14 (1 Min) 1.17.2014

Prelim UoM Consumer Sentiment Comments Off

Feb 082014

1/17/2014 Prelim UoM Consumer Sentiment (0955 EST)
Forecast: 83.4
Actual: 80.4
TRAP TRADE (SPIKE/REVERSE)
Anchor Point @ 0.0009588 (recent avg)
————
Trap Trade:
)))1st Peak @ 0.009598 – 0955:14 (1 min)
)))10 ticks

)))Reversal to 0.009584 – 1003 (8 min)
)))-14 ticks
————

Trap Trade Bracket setup:
Long entries – 0.009580 (no SMA/Pivot within 5 ticks) / 0.009574 (in between the S1 Mid Pivot and LOD)
Short entries – 0.009597 (just above the R1 Mid Pivot ) / 0.009603 (just above the HOD)

Notes: Report came in mildly lower than the forecast by 3.0 points causing a long impulse on the 6J for 10 ticks as it eclipsed the R1 Mid Pivot. That would have easily filled the inner short entry with 1 tick to spare. Then it would have hovered around the R1 Mid Pivot for 2 bars before falling. Move the stop loss to 0.009601, just above the HOD (-4 ticks), then be patient and wait for it to fall to at least the 50/100 SMAs, and likely the 200 SMA / PP Pivot. It reached both barriers at 10:01 and 10:03 respectively, allowing up to 12 or so ticks to be captured with ease. This is a Trap Trade that you can be patient and wait for the reversal for several bars. It continued to hover near the PP Pivot and 200 SMA for 10 min before it rose again and traded sideways.

ZB 03-14 (1 Min) 1.16.2014

Philly FED Manufacturing Index Comments Off

Feb 082014

1/16/2014 Monthly Philly FED Manufacturing Index (1000 EST)
Forecast: 8.8
Actual: 9.4
Previous revision: n/a
SPIKE WITH 2ND PEAK
Started @ 130’28
1st Peak @ 131’03 – 1002 (2 min)
7 ticks

2nd Peak @ 131’07 – 1007 (7 min)
11 ticks

Reversal to 130’30 – 1026 (26 min)
9 ticks

Notes: Report mildly exceeded the forecast with a delta of only 0.6 pts, causing a slightly delayed long spike on the ZB that started on the 100 SMA, and crossed the 50 SMA and the R2 Mid Pivot on the :01 bar, and the HOD on the :02 bar. With JOBB, your order would have filled long at about 130’31 with 1 tick of slippage. Due to the location of the R2 Mid Pivot and HOD where the :01 bar was peaking, and the narrow offset of the report, look to exit at breakeven or 1 tick of profit. The extended reaction and size of the move were unusual for this situation as it achieved 7 ticks on the :02 bar and 4 more ticks on the :07 bar, crossing the R2 Pivot. Then it reversed for 9 ticks in the next 19 min, crossing the 100/50 SMAs and the R2 Mid Pivot.

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