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Forex Signal (Monday August 29, 2011 NY TIME 10:00am EDT) - US Pending Home Sales m/m

Discussion in 'Current Forex Trading Signals' started by Stavro D'Amore, Aug 28, 2011.

  1. Stavro D'Amore

    Stavro D'Amore Former FPA Special Consultant

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    Hello,

    Today we have the following:

    US Pending Home Sales m/m
    Forecast -0.8%
    Previous 2.4%
    Pair to trade: USD/JPY

    Numbers we need:
    BUY USD/JPY 9.8%
    SELL USD/JPY -9.8%

    Economical Impact: High
    Typical Result: Good for Currency
    Occurrence: monthly, about 35 days after the month ends
    Spike Probability: Good, we can see 30 pips on initial spike

    About our Triggers:
    US Pending Home Sales m/m is forecasted to arrive at -0.8%.
    We are looking for a deviation of 9% either way on this trade.
    If we get 9.8% or better I will look to enter a Long position on USD/JPY and if we get
    -9.8% or lower I will go Short on USD/JPY.
    Should this report be triggered, we can expect to see about 30 pips on the initial spike.

    NOTE: We have no known conflict for this release. This report either reacts really well or does not react at all. Be prepared that USD/JPY may not move, even with a huge deviation. Should the trade not move, close any open positions if you get triggered on the spike. If this sentiment deviates and we see a large move, then a retracement method will be a good option.

    What is it? And why does the market care?
    It is a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect. For example, renovations are done by the new owners, a mortgage is sold by the financing bank and brokers are paid to execute the transaction.

    Pending Home Sales m/m measures change in housing contract activity. It is designed to be a leading indicator of housing activity. It is based on signed real estate contract for existing single-family homes, condos and co-ops. A signed contract is not counted as a sale until the transaction closes. The index is not including new construction in its count. It is a leading indicator of economic health because the sale of a home triggers a wide-reaching ripple effect.

    A higher than expected reading should be taken as positive/bullish for the USD
    A lower than expected reading should be taken as negative/bearish for the USD.

    Method I use to trade this:
    Stavro D’Amore Trading Method
    I will look for a 30% retracement in the original spike before entering. I will be looking at a 5 minute chart. I will sell half my position as soon as I hit the original high point of the first initial spike and place a SL at the original spike price.

    My TP level would be just before a resistance level or if the chart decides to form a support level, looking at a 15 minute chart time frame to analyze this.

    I do recommend spike trading as an option. Liquidity is very good at the moment if you are using an ECN broker. Please use no more than a 10 pip limit order.
    Historical Chart and Data for US Pending Home Sales m/m

    All the best

    Stavro D’Amore
     
    #1 Stavro D'Amore, Aug 28, 2011
    Lasted edited by : Sep 8, 2016
  2. tom.finanz

    tom.finanz Private

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    not that it matters much, but
    -0.8 + 9.0 = 8.2
     
  3. tangmase

    tangmase Corporal

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    numbers we need

    hi stavro, i am new here and i have a question for understanding?
    what does it mean? :confused:

    Numbers we need:
    BUY USD/JPY 9.8%
    SELL USD/JPY -9.8%

    after 9.8% raise ( of USD/JPY ) you go long or on the other side after a 9.8% down you go short.
    can you please explain for me?

    by the way, i a preciate a lot what you are doing. thank you. t.s
     
  4. Fxonuoha

    Fxonuoha Private, 1st Class

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    Hello stavro,
    I'm finding it difficult following your explanations about trading the news releases,in as much as I'm new to the forex seen.How can I calculate a 30% retracement as you so mentioned in your last forecast?
     

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