Aug 082012

CL 12 12 (1 Min) 08.08.12

08/08/2012 30-yr Bond Auction (0701 HI time / 1301 EDT)
Previous: 2.58/2.7
Actual: 2.83/2.4
Started @ 148’14 (0701)
1st Peak @ 148’05 – 0702 (1 min)
9 ticks

Reversal to 149’08 – 0751 (50 min)
35 ticks

Notes: Report is scheduled on Forex Factory at the top of the hour, but the spike always breaks 1 min late. The highest yield rose strongly from the previous auction, to rise off of the multi-year low in July. With lessening demand for the bonds, the yield rose, and should have caused the ZB to spike long but it went short first and then reversed in the direction it should have originally gone. With JOBB you would fill short at 148’11 right on the LOD. Since it was trading close to the LOD before the auction and you have the S2 Pivot sitting just below, wait and see how it behaves as it interacts with the S2 Pivot. As it hit bottom at 148’05, 3 ticks below the S2, then bounced up, exit around 148’06 with about 5 ticks. The reversal was able to cross all 3 major SMAs and the s1 Pivot to peak at 149’08 50 min after the auction for 35 ticks. Since it went short first erroneously, this propelled it long and would have made an ideal trade.