Nov 212012

CL 01 13 (1 Min) 11.21.12

11/21/2012 Weekly Unemployment Claims (0330 HI time / 0830 EST)
Forecast: 415K
Actual: 410K
Started @ 87.78
1st Peak @ 87.46 – 0234 (4 min)
32 ticks

Reversal to 87.65 – 0343 (13 min)
19 ticks

2nd Peak @ 87.40 – 0347 (17 min)
38 ticks

Reversal to 87.88 – 0408 (38 min)
48 ticks

Notes: Report came in slightly better than the forecast by 5K jobs, but still above the psychologically negative 400K level. The trading community has gotten accustomed to #s in the 350-370 range, so anything north of 400 triggers the bears. This caused a slow developing but large sized short spike of 32 ticks in 4 min that had to cross all 3 SMAs. The PP Pivot had been tested a few times in the previous hour and served as resistance, aiding the selling momentum. With JOBB, you would not have filled on the :31 bar as it stayed in a 4 tick range. It would have been safe to cancel the order as indications of a dull reaction were evident. When it moved short of 87.71, breaking a short term support level, that would be a place where a follow on short entry could be made. Notice that it did not struggle with penetrating the 100 and 200 SMAs. The bars stop and start there, but there is little retracement. It would be safe to close out at or just below the 200. After the 1st peak, it reversed up to the 100 SMA, then achieved a 2nd peak of 6 more ticks. Then it reversed long for 48 ticks in about 20 min through the pit open, fighting through all 3 SMAs, then the PP Pivot for a double top at 87.88.