Sep 042012

CL 10 12 (1 Min) 09.04.12

9/4/2012 Monthly ISM Manufacturing PMI (0400 HI time / 1000 EDT)
Forecast: 50.0
Actual: 49.6
Previous revision: n/a
Started @ 95.99
1st Peak @ 95.88 – 0401 (1 min)
11 ticks

Reversal to 96.16 – 0403 (3 min)
28 ticks

Final Peak @ 95.12 – 0450 (50 min)
87 ticks

Reversal to 95.66 – 0513 (73 min)
54 ticks

Notes: Report fell slightly short of the forecast and came in below the threshold of 50 indicating a small contraction for the third month in a row, but the sharpest contraction in 4 yrs. This initially caused a dullish reaction of only 11 ticks, that quickly bounced back long into a 28 tick reversal on the :03 bar as it hit the S2 Pivot. After the gravity of the report was digested, the market dove into a bearish fan, shorting for 87 ticks in about 45 min. With JOBB, you would have filled short with no slippage at 95.02, then had an opportunity to close with 2-3 ticks as it hovered in the 95.90 area. The market was probably oversold in the very short term due to the drop of over 100 ticks in the previous 2 hrs, and 60 ticks in the previous 25 min. This prevented the initial spike from falling more and reduced the overall magnitude of the secondary fall. The secondary drop crossed the S2 Pivot then found support in the 95.12 area which held after 2 more attempts to penetrate. The reversal was able to reclaim 54 ticks in about 23 min.