Forex Trading Signal 05/14/09

Crazy Cat

Former FPA Special Consultant
Hey Folks,

Here is the video:

Some great trading yesterday as just about everything worked out well... our sells in stocks and many currency pairs were pretty well timed and we got a nice break on the BoE Inflation Report. With all the doom and gloom coming out of the BoE with that release, it's really exacerbated the flipping of sentiment negative that we've seen, and a more substantial decline in EUR/USD, and XXX/JPY pairs is starting to take shape. As I write this, it looks like a potential short term bounce is brewing, but I would see that as more of an opportunity to enter a short on the bounce, or add to or reenter shorts you many have taken profits on. I talk about this more in detail in the video.

Stocks may find support as well in this 775-885 range on the S&P as channel support as held for quite some time; however, any decent bounce to 900 or above should be seen as a good shorting opportunity with 914 as a high level that should hold for some time. Longer term, a steep decline in stocks will find a bottom somewhere above 666 and set the stage for a rally to new 2009 highs; however, the precise level it will find that support is currently unclear.

Retail sales in the US yesterday was also negative catching the markets off guard and with that prenews buying we forecasted that developed, there was a lot of quick selling as a result of the bad release. Gold is wavering around right now and a bit unclear with mixed fundamental pressures all fighting to take hold. For news tomorrow:

0830 US Core PPI m/m (0.1% expected) - Inflation numbers have a bit of a mixed effect on USD at times, so I would look to trade this on USD/JPY to play it a little safer. Look for the Unemployment Claims numbers to help with this trade in order to have more confidence in it with higher claims providing selling pressure and lower claims helping the buying side.
If PPI Core comes in at 0.3% or higher, USD/JPY should rally by 20-40 pips
If PPI Core comes in at -0.1% or lower, USD/JPY should fall by 20-40 pips

NZ Retail Sales I don't think is a very good news trade nowadays so I recommend skipping it.

A special thanks to the new people that joined the Diamonds room yesterday. I liked the atmosphere and felt we had a lot of good mojo going around. With 4 good shorts between GBP/USD, GBP/JPY, EUR/JPY, and AUD/JPY I think we had a great day and I hope we can keep the profits coming over the next couple of weeks.

To our success,
Sir Pipsalot