Oct 052012

CL 11 12 (1 Min) 10.05.12

10/5/2012 Monthly Unemployment Report (0230 HI time / 0830 EDT)
Non Farm Jobs Forecast: 114K
Non Farm Jobs Actual: 114K
Previous Revision: +46K to 142K
Rate Forecast: 8.2%
Rate Actual: 7.8%
Started @ 90.49
1st Peak @ 91.71 – 0233 (3 min)
122 ticks

Reversal to 90.92 – 0237 (7 min)
79 ticks

Extended Reversal to 90.17 – 0345 (75 min)
154 ticks

Notes: We got our October surprise with this report. A matching jobs # with the forecast, but a whopping 0.4% drop in the rate. The market initially reacted long on the news in the first 3 bars, going from the LOD to the HOD for 122 ticks. The spike crossed the PP Pivot, then all 3 SMAs on top of each other. With JOBB, your long order would have filled at about 90.67 with 8 ticks of slippage. If you look at the range chart you will notice it initially jumped up about 30 ticks, then proceeded to seesaw between 90.80 and 91.10 (30 ticks range) for the next 5 sec. Then it dipped to test the PP Pivot and bounced long up to 91.28 to close out the :31 bar near its high. After seeing the seesaw activity, I would place a sell limit order at about 91.05, 5 ticks below the upper limit, which would have filled toward the end of the bar with about a 40 tick profit. The next 2 bars continued higher for another 50 ticks, but that is not typical or predictable. As the internals of the BOLS report became suspicious where most of the drop in the rate was attributed to nearly 600K part-time jobs, the market began to sell off. The initial reversal reclaimed 79 ticks in 4 min after the peak, then the extended reversal yielded 154 ticks over an hour later. The market continued to sell off until about 12 pm Eastern.