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8/2/2012 Monthly Factory Orders (0400 HI time / 1000 EDT)
Forecast: 0.4%
Actual: -0.5%
Previous Revision: -0.2% to 0.5%
SPIKE / REVERSAL
Started @ 87.69
Peak @ 87.25 – 0405 (5 min)
44 ticks
Reversal to 87.67 – 0409 (9 min)
42 ticks
Notes: Very negative report fell short of the forecast coupled with a small downward revision to the previous report. This caused a short spike of 44 ticks in 5 minute that crossed the 50 SMA and bounced off of the S2 Pivot. Since the market had sold off about $2.50 in the last 90 min following the disappointing ECB press conference, the market was fairly oversold. With such a negative report, it was still able to fall. Then the reversal reclaimed 42 ticks in 4 min, before rallying for many more ticks over a longer period of time to correct the longer term oversold status. Very east report to capture about 30 ticks if you are patient and exit after the :04 large red bar.