Oct 012012

CL 11 12 (1 Min) 10.01.12

10/1/2012 Monthly ISM Manufacturing PMI (0400 HI time / 1000 EDT)
Forecast: 49.8
Actual: 51.5
Previous revision: n/a
Started @ 92.85
1st Peak @ 93.32 – 0404 (4 min)
47 ticks (2x top)

Reversal to 92.76 – 0423 (23 min)
56 ticks

Notes: Report exceeded the forecast by a decent margin and had a reading above 50 for the first time in 4 months. This caused a healthy rally of 47 ticks in 4 bars (mostly on the :01 bar) that crossed the 50 SMA and the R2 Pivot to peak at the HOD reached 45 min earlier. With JOBB, you would have filled long with about 3 ticks of slippage at 92.95, then had an opportunity to close with about 15 ticks as it hovered in the 93.10 area. The market was overbought in the very short term due to the rally of over 180 ticks in the previous 2.5 hrs. It backed off of the peak before the report, but the bulls were restrained, preventing an even higher rally or 2nd peak. The reversal was able to reclaim 56 ticks in a methodical drop to the 100 SMA in 23 min. It eventually dropped to the 200 SMA and lower, probably correcting the earlier rally, not the ISM report.