Hey Folks,
What a bounce today, in equities, eh? Big yo-yo action on the GBP/USD too. I'm still watchfully neutral on both EU and GU expecting them to whip around within their recent ranges until a key technical break convinces me otherwise.
Yesterday I was romanced by the pre-European equity futures selloff and put the odds of a big bounce somewhat low, but we sure got one. I think this provides us an excellent shorting opportunity as the odds are, this this bounce is over or ending soon. Peering into the structure, this rally should turn into further downside and a break of recent lows. If we manage to rally above 8410 on the Dow, or about 915 on the S&P 500 though, we'll have to step back a bit and reassess. I'm going to recommend another short entry here on stocks any way you see fit. Ways to do this are to sell ES futures (at 898), buy an inverse ETF like SDS (at about 57.40 now), or buy September 90 or 85 puts (at 4.20 or 2.42 respectively). If you're still in short the market from a previous entry (I am of course), I recommend continuing to hold short and consider adding a bit here.
Silver and gold continue to wiggle around within their down trends, but with the sharp bounce on silver today, it's possible its impending countertrend rally might be taking shape, so we'll keep an eye on it in the coming days. In news Tuesday:
0430 UK CPI y/y (expected at 1.8%) - This one should be pretty good either way, but beware of the GBP/USD typical potential of reversing the short term trend after 0430 news (whatever it may be heading into the news) if there is a strong trend heading in.
If it comes out at 2.0% or higher, GBP/USD would rally 40-50 pips.
If it comes out at 1.6% or lower, GBP/USD should sell off 40-50 pips.
0500 German ZEW Economic Sentiment (47.8 expected) - This release used to be quite nice but has become more muted the last several months even on big surprises. I think there's definitely a leak factor in play on this one. Expect a move, but not anything too groundbreaking.
If it comes out at 55 or higher, EUR/USD should rally 30 pips.
If it comes out at 39.9 or lower, EUR/USD should sell off 30 pips.
0830 US Retail Sales ex Autos (expected at 0.5%) - Watch out for conflicts on the headline retail sales data and PPI. It's hard to say exactly how big surprises on PPI might affect things, but I believe higher numbers will lead towards buying, and lower will lead towards selling in EUR/JPY. On this one both USD/JPY and EUR/USD should move in the same direction with the surprise, so EUR/JPY seems like the best way to both cover your bases (in case one of the two doesn't work) or better yet, take advantage of both at the same time. Usually USD/JPY is the sharper, faster move, and the EUR/USD will churn along and catch up.
If it comes out at 1.0% or higher, EUR/JPY should rally 50 pips.
If it comes otu at 0.0% or lower, EUR/JPY should sell off 50 pips.
TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot
What a bounce today, in equities, eh? Big yo-yo action on the GBP/USD too. I'm still watchfully neutral on both EU and GU expecting them to whip around within their recent ranges until a key technical break convinces me otherwise.
Yesterday I was romanced by the pre-European equity futures selloff and put the odds of a big bounce somewhat low, but we sure got one. I think this provides us an excellent shorting opportunity as the odds are, this this bounce is over or ending soon. Peering into the structure, this rally should turn into further downside and a break of recent lows. If we manage to rally above 8410 on the Dow, or about 915 on the S&P 500 though, we'll have to step back a bit and reassess. I'm going to recommend another short entry here on stocks any way you see fit. Ways to do this are to sell ES futures (at 898), buy an inverse ETF like SDS (at about 57.40 now), or buy September 90 or 85 puts (at 4.20 or 2.42 respectively). If you're still in short the market from a previous entry (I am of course), I recommend continuing to hold short and consider adding a bit here.
Silver and gold continue to wiggle around within their down trends, but with the sharp bounce on silver today, it's possible its impending countertrend rally might be taking shape, so we'll keep an eye on it in the coming days. In news Tuesday:
0430 UK CPI y/y (expected at 1.8%) - This one should be pretty good either way, but beware of the GBP/USD typical potential of reversing the short term trend after 0430 news (whatever it may be heading into the news) if there is a strong trend heading in.
If it comes out at 2.0% or higher, GBP/USD would rally 40-50 pips.
If it comes out at 1.6% or lower, GBP/USD should sell off 40-50 pips.
0500 German ZEW Economic Sentiment (47.8 expected) - This release used to be quite nice but has become more muted the last several months even on big surprises. I think there's definitely a leak factor in play on this one. Expect a move, but not anything too groundbreaking.
If it comes out at 55 or higher, EUR/USD should rally 30 pips.
If it comes out at 39.9 or lower, EUR/USD should sell off 30 pips.
0830 US Retail Sales ex Autos (expected at 0.5%) - Watch out for conflicts on the headline retail sales data and PPI. It's hard to say exactly how big surprises on PPI might affect things, but I believe higher numbers will lead towards buying, and lower will lead towards selling in EUR/JPY. On this one both USD/JPY and EUR/USD should move in the same direction with the surprise, so EUR/JPY seems like the best way to both cover your bases (in case one of the two doesn't work) or better yet, take advantage of both at the same time. Usually USD/JPY is the sharper, faster move, and the EUR/USD will churn along and catch up.
If it comes out at 1.0% or higher, EUR/JPY should rally 50 pips.
If it comes otu at 0.0% or lower, EUR/JPY should sell off 50 pips.
TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot
Last edited by a moderator:
