Hey folks,
Well, stocks rallied right into the close right around that biasing resistance level at 1007, but held the line, so I still think the short side is the favorite unless those highs break which will force us to reconsider and probably turn neutral or bullish. The lack of a major advance today allowed the EUR/USD and GBP/USD to potentially top out here. I think the key levels to watch to the downside are 1.4200 on the EUR/USD and 1.6375 to 85 on the GBP/USD. If broken, the USD is likely to continue it's strengthening trend or at least work towards the bottom of the 4 hour chart range on EUR/USD. If those levels fail to give way, we're likely going to test and probably top those August 13th highs before the next big downleg forms.
Stocks really never gained any ground compared to when we looked at them last night from a futures perspective. They rallied up and filled that gap with just a little extra at the close. I think the key downside level on stocks becomes that same 993 level on the S&P that has helped bias the markets for weeks. And again, a significant break of Thursday's highs will be the final straw with any shorts I'm holding onto and I'll likely close them at some point at market on Friday.
Fortunately Silver and Gold look to have already started the next downside move. The question becomes, are they the leading indicator pointing towards impending USD gains and stock losses? Or are they simply wandering lower and a pickup in stocks or the Euro will turn them back around higher? Frankly, it's too early to tell, but if this week's lows give way at $13.51 and $930, that would go a long way to strengthen the overall case for downside on stocks, EU, GU, and the metals themselves.
In news Thursday, out of Norway we had a tricky conflict between the main GDP number coming in low and the Mainland Norway GDP number I recommended to follow coming in high. It turns out the Mainland Norway number worked much better and we managed to squeeze some pips out of it in the Diamonds room. UK Retail Sales came out roughly as expected, so no trade there. On Friday:
1000 US Existing Home Sales (expected at 5.00M) - It's been quite awhile since we've seen a nice surprise on Exisiting Home Sales, but it should be a good trade if we hit the triggers. The USD/JPY will likely work very well initially but sputter out after a few minutes. The EUR/USD is kind of a wild card. My recommendation is to trade the USD/JPY if you want to get in and out quickly, and watch the Euro... if the Euro and Stocks start reacting to the news in the same direction as USD/JPY bit by bit in the first 3-5 minutes, go ahead and jump in on the Euro as a follow-up trade as it can make a nice, slow churn for a good 30-40 minutes if it decides to react to the news.
If it comes out at 5.10M or higher, USD/JPY should rally 30+ pips.
If it comes out at 4.89M or lower, USD/JPY should drop 30+ 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
Well, stocks rallied right into the close right around that biasing resistance level at 1007, but held the line, so I still think the short side is the favorite unless those highs break which will force us to reconsider and probably turn neutral or bullish. The lack of a major advance today allowed the EUR/USD and GBP/USD to potentially top out here. I think the key levels to watch to the downside are 1.4200 on the EUR/USD and 1.6375 to 85 on the GBP/USD. If broken, the USD is likely to continue it's strengthening trend or at least work towards the bottom of the 4 hour chart range on EUR/USD. If those levels fail to give way, we're likely going to test and probably top those August 13th highs before the next big downleg forms.
Stocks really never gained any ground compared to when we looked at them last night from a futures perspective. They rallied up and filled that gap with just a little extra at the close. I think the key downside level on stocks becomes that same 993 level on the S&P that has helped bias the markets for weeks. And again, a significant break of Thursday's highs will be the final straw with any shorts I'm holding onto and I'll likely close them at some point at market on Friday.
Fortunately Silver and Gold look to have already started the next downside move. The question becomes, are they the leading indicator pointing towards impending USD gains and stock losses? Or are they simply wandering lower and a pickup in stocks or the Euro will turn them back around higher? Frankly, it's too early to tell, but if this week's lows give way at $13.51 and $930, that would go a long way to strengthen the overall case for downside on stocks, EU, GU, and the metals themselves.
In news Thursday, out of Norway we had a tricky conflict between the main GDP number coming in low and the Mainland Norway GDP number I recommended to follow coming in high. It turns out the Mainland Norway number worked much better and we managed to squeeze some pips out of it in the Diamonds room. UK Retail Sales came out roughly as expected, so no trade there. On Friday:
1000 US Existing Home Sales (expected at 5.00M) - It's been quite awhile since we've seen a nice surprise on Exisiting Home Sales, but it should be a good trade if we hit the triggers. The USD/JPY will likely work very well initially but sputter out after a few minutes. The EUR/USD is kind of a wild card. My recommendation is to trade the USD/JPY if you want to get in and out quickly, and watch the Euro... if the Euro and Stocks start reacting to the news in the same direction as USD/JPY bit by bit in the first 3-5 minutes, go ahead and jump in on the Euro as a follow-up trade as it can make a nice, slow churn for a good 30-40 minutes if it decides to react to the news.
If it comes out at 5.10M or higher, USD/JPY should rally 30+ pips.
If it comes out at 4.89M or lower, USD/JPY should drop 30+ 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
