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Sir Pipsalot's Daily Market Update 1-18-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Jan 18, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    We continue to be spot on here with our EUR/USD analysis, calling for the short to develop further to the downside and picking near term targets. To quote part of Friday's signal:

    "we made it through the 1.4460 key level cleanly, so now we should see further downside into the 1.4300's near term. If we get a small rally back up to the 1.4450-60 area that starts to top out, it would make for a good swing trade short from there. Near term support may come into play at the 61% and 78% fibs of the recent upswing at 1.4384 and 1.4339, so those are good areas to either put some TP's or even strategically scalp long."

    [​IMG]

    As you can see from the chart above, this scenario has played out nicely and a short back off the fib around 1.4384 is probably the way to play it right now as I type. If that trade doesn't work for a lot of pips, a short off the next fib at 1.4422 or at the 1.4450-60 resistance area should give another shot. I'm actually playing this both ways and have called some scalp longs off the fibs, but in general my TP targets are a bit bigger on the shorts and tighter on the longs due to the probable resumption of the longer term EUR/USD downtrend.

    For now, obviously there's support around 1.4338, but a break lower into the 1.4200's is quite likely over the next few days even if we get stuck and consolidate for the time being. Specifically 1.4263 and 1.4217, the recent 4h low, and the low from December, are the key levels to watch. I believe we'll test them and possibly break them this week. The fundamental picture and sentiment is very bleak right now for the Euro, and with the weakness on EUR/GBP, we're likely to continued pressure.

    Right now on stocks, I'm watching the ESH0 contract (S&P 500 March), and the recent lows on the 1h around 1127.75 seem to be developing into a nice biasing point. A break below that level (currently at 1133.75) will put the 1147 high as a very probable muti-week high meaning we can get short on the break with a 20-25 point SL and fade in if there's a rally, or scalp short by seling rallies.

    In news Friday, everything came out too close to expected to give us anything to work with. There's also no key news out Monday, so the first trade I plan to preview this week is Tuesday's UK CPI.

    That's all for today's update. If you'd like to learn more about trading or trade along with myself and my collegues, come join us at Profit Mongers. Our subscription is very reasonable at $179 per month, and right now you can sign up for a 2 week trial to get started for only $29. This offer is for new customers only.

    To our success!
    Sir Pipsalot
     
    #1 Sir Pipsalot, Jan 18, 2010
    Last edited: Jan 18, 2010

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