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Forex Trading Signal 08/18/09

Discussion in 'Current Forex Trading Signals' started by Crazy Cat, Aug 18, 2009.

  1. Crazy Cat

    Crazy Cat Former FPA Special Consultant

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    Hey folks,

    As expected, the EU and GU traded lower yesterday and broke through last week's lows. Now having blown lower, they've naturally recovered a bit. I'm not really expecting a very steep retracement here, so as I told the Diamonds room earlier, I thought "As I mentioned in the room last night, I entered a swing trade short on GU at 1.6440 with a SL at 1.6540 and TP at 1.6040. I do not expect to be stopped out." My best guess is as the European session gets rolling, we'll see yesterday's slight move up hit some downside pressure, especially on GBP/USD... but you never can be too sure. One reason to expect this is potential anticipation of UK CPI where the BoE may have given us heads up on some lower than expected numbers to come with their quarterly inflation report last week.

    Gold, and Silver have now turned more comfortably to the downside. As you know, I've been long term bearish Gold and Silver since about the beginning of June through the subsequent ups and downs. Even though the properly anticipated bounce from their July lows went a bit higher than I expected, it looks like it's going to be much more down than up from here over the coming days, weeks, and months. I would see any further bounce on Gold (maybe to mid 940's) and Silver (maybe to 14.30 to 14.50) as good swing trade short opportunities as we should generally see lower highs and lower lows near term.

    Stocks have finally validated my calls for a strong top soon and boy did they ever. With a clearly defined break of 992 coming right around the open of trading, we've confirmed that we're starting some form of significant downside. It's not quite too late to get in short since this is freshly confirmed, but it always helps to sell on bounces after a confirmation rather than chasing them and getting nervous. My targets are support at 968, then 957, then 930. If we somehow head much lower than 930 and the move is very impulsive, that will open up the possibility that the August 7th highs may be IT for this bear market rally from March. The odds still favor a rally from the low to mid 900's for one last attempt at new highs, but once we start testing trendlines below 900 on the S&P, those odds will start shifting dramatically towards another painful bear market. Long story short here... for the rest of the week, we're either getting a little more downside, or a lot, so look for shorts no matter what your timeframe. In news Tuesday we have 2 potential trades:

    0430 UK CPI y/y (expected at 1.5%) - Based on last weeks inflation report, the GBP is quite sensitive to CPI issues, so any 0.2 surprise could get a strong reaction on GBP/USD. We may also see some GBP weakness in anticipation of the report as some may be leaning towards a low number. Whichever way the market moves before UK CPI, if there's a clear short term trend established, AND the news pushes the GBP even further in that direction, usually the news move will spike and reverse. If the news causes a short term trend reversal, then it's more likely to continue and extend over the course of 40 minutes to an hour.
    If it comes out at 1.7% or higher, GBP/USD should rally 40-50+ pips.
    If it comes out at 1.3% or lower, GBP/USD should sell off 40-50+ pips.

    0500 German ZEW (expected at 45) - Lately, on decent surprises, the ZEW has been moving EUR/USD about 35 pips quickly, and then it seems all but forgotten after a retracement. While a I feel this indicator may start working better either this month, or sometime soon in future months, it's not a good idea to expect a huge resurgence to its glory days until we get at least one solid release as evidence.
    If it comes out at 50 or higher, EUR/USD should rally 35 pips.
    If it comes out at 40 or lower, EUR/USD should sell off 35 pips.
    If it comes out at 35 or lower, EUR/USD should sell off in a more protracted manner.

    0830 Various pieces of US news including PPI, Housing Starts and Building Permits - This news is likely to be a bit of a cluster**** and unless everything comes out in a clear direction (and maybe not even then), I'm not so sure it will be easily tradable. After Monday's scary equities selloff, most of the early NY action will be trying to get in front of the direction of the stock market open which will make fundamentals less important. We're skipping this news in the Diamonds room.

    TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
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    To our success,
    Sir Pipsalot
     
  2. onu29t

    onu29t Recruit

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    Have joined forex diamonds but no response

    Hi Sir Pips,

    I've joined forex diamonds but I have not received any response yet, could you please have a look at my subscription.

    Cheers
     
  3. mechtech63

    mechtech63 Corporal

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    Signals

    Sure EUR/USD is down-trending?

    The small up-trend you spoke of looks to be constant.
    Glad I have enough margin to cover this unexpected turn...for now.

    Hope it turns soon.
     
  4. michael cole

    michael cole Recruit

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    GU ... Ouch!! I'm fading it. looking to add.
     
  5. onu29t

    onu29t Recruit

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    Got Stopped out of the GBP/USD...1.6550 should I short again?

    Hi Sir Pips,

    Got Stopped out of the GBP/USD... 1.6550 should I short again at 1.6575?

    Cheers
     
  6. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Yes, I'm pretty confident the EUR/USD is in a clear downtrend now, but as everyone knows, even trends have a lot of 2 way action along the way. That's why it's important to be careful about chasing things short. There's only twice I've specifically mentioned it was a good time to enter a position or swing short on EU, and that's August 4th to 6th around 1.4380 and August 13/14th around 1.4250-1.4300. If you're hurting on margin, you obviously chose to sell at some other point and got caught in a bounce. I expected the recent decline to kick back in sooner and with less retracement than we've seen, so I got caught stopping out on a trade or two on GBP/USD, but the overall position is still short.

    Be real careful guys, if you trade position, you have to trade much smaller lot sizes and be more patient. The Euro's pending several thousand pip decline if fully realized will likely take 6-9 months to fully form. Along the way we will see some wicked bounces, so you don't want to just blindly short at a break of support and expect to never have it run against you.

    I feel I've done a particularly good job calling the top on this over the last few weeks and have chosen very good spots to enter in both occasions. If it seems like most people are still losing money from these signals with the very good advice on trends and position, I might as well stop giving that advice here and keep it limited to the Diamonds room where we try to teach how to follow such advice responsibly.
     
    #6 Sir Pipsalot, Aug 19, 2009
    Last edited: Aug 19, 2009
  7. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Yes, I got stopped out on that one too... sometimes it's easy to forget the GU tends to sell off hardest AND bounce hardest. The much better than expected UK CPI really was a headwind on that one. The big picture is still short there, but I'm not positive on the best spot/time to reenter right now.

    I didn't mention yesterday that I'm also in a swing trade short on the EUR/USD though, and that hasn't had as much of a run-up, so I'm still comfortably in it.

    The great thing about position trading is that you don't have to time your trades perfectly... just get in with the proper money management in the right direction and work the position no matter what it wants to do that day. Timing the market with specific swing trades is something I do in addition to the overall position trade that has it's own varying results, but usually helps increase returns.
     
    #7 Sir Pipsalot, Aug 19, 2009
    Last edited: Aug 19, 2009
  8. michael cole

    michael cole Recruit

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    SP - The daily signals are the best! I have learned alot from you and your advice has been profitable for me. Thanks
     
  9. jlnh

    jlnh Recruit

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    Plunge Protection Team

    Sr Pips,

    Are you considering possible influence thru manupilation by the PPT?
     
  10. mechtech63

    mechtech63 Corporal

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    Sir Pips,

    I'm in shorts and swinging it on the EUR/USD, yes you have to keep margin in mind. Even with the bounce I'm still at 350% margin at the peak of the bounce.

    Good advice at keeping the lot size smaller. I have been growing my lot price as I grow my cash, but good idea to reduce on these choppy trends. Any pair should go up and down as it trends, it's only natural, we humanly assume it is a slope with no bumps. I have enjoyed some nice profits from these bumps, just gotta play them when they hit.

    Happy trading
     

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