Jul 272012

CL 09 12 (1 Min) 07.27.12

7/27/2012 Quarterly Advance GDP (0230 HI time / 0830 EDT)
Forecast: 1.5%
Actual: 1.5%
Previous Revision: -0.3% to 1.9%
Started @ 89.89
1st Peak@ 90.03 – 0231 (1 min)
14 ticks

Reversal to 89.29 – 0250 (20 min)
74 ticks

Notes: Report matched the forecast and produced an overall long term indecisive reaction that resulted in a seesaw above and below the 200 SMA for over 90 min. I categorized it as a SPIKE/REVERSE because it adheres to that model and then repeats it several times. Even though it matched the forecast, the forecast of only 1.5% GDP growth over a year is very dismal. A healthy economy should have a minimum of 3-3.5% and a recovering economy should be 4-5% or more. When you see the initial long reaction on the :31 bar with a matching poor forecast, do not stay in long. Look to get a few ticks and move your stop loss up to breakeven. After the initial rise, it chopped lower fighting through all of the SMAs and the PP Pivot to drop to 89.29 in 20 min. Then it climbed back to above the 3 SMAs and continued oscillating. If you look at the DX index for this time period, the trend followed the inverse of the CL, hitting a peak on the 02:50 bar then falling after that for 90 min (04:23 peak) and going sideways. With a heavy economic report like this, keep an eye on the DX to dictate what oil will do.