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Sir Pipsalot's Daily Market Update 1-20-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Jan 20, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    I'm not feeling well tonight, so I'll just provide a brief update. The EUR/USD selloff has continued to be relentless breaking through and holding through (at least for now) the 1.4217 December lows. We should see some support come into play at 1.4115-20, 1.3993, and 1.3800. My thinking is we'll see 1.3800 in the next 2-3 weeks, and 1.3100 in the next 2-3 months, but we'll have to see how this move develops. EUR/GBP is also likely to target 0.8600 over the next 2 weeks as well.

    Stocks rallied almost comically Tuesday following my call to get in short. It could be I'm dead wrong here, but as long as last Thursday's highs stay intact, I think a short is very worth holding or entering. We'll obviously get more feedback on this Wednesday.

    In news Tuesday, we saw UK CPI come in high and rally GBP/USD 38 pips in 6 minutes. The German ZEW actually worked a bit, but that might have just been lucky since the EUR/USD was in a selloff anyways. CAD Interest Rate statement really didn't have any groundbreaking surprises, so not much to work off there. Finally NZ CPI came out low and managed a steady 45 pip decline in 12 minutes that continued on (thanks to USD strength) for 90 total pips a few hours later. In news Wednesday:

    0430 BoE Minutes and Claimant Count Change (unanimous vote and -4.6K expected) - This release might be a bit tumultuous and confusing since there will likely be a reaction to both the UK unemployment data and the minutes. At their last interest rate meeting on the 7th, the BoE decided to keep their APF unchanged and spoke a bit hawkishly implying they may end the program at the next meeting.
    If the minutes reveal a likelihood they will end the APF, GBP/USD will likely strengthen considerably (maybe 40-50 pips)
    If the minutes reveal a likelihood they will reexpand the APF, GBP/USD will likely weaken considerably (maybe 40-50 pips)
    If the Claimant Count Change comes in at -15K or lower (this is good), GBP/USD will likely rally 30 pips or so initially
    If the Claimant Count Change comes in at +5K or higher (this is bad), GBP/USD will likely fall 30 pips or so initially.

    Obviously on UK news here, if there's conflicts between some of the other unemployment figures, or a tug of war between bullish and bearish pressure from the minutes versus the CCC, it would probably be best to stay out. If they both are surprising in a complimentary manner though, game on.

    2100 Chinese GDP Real y/y (10.5% expected) - There's a ton of Chinese data coming out at about the same time here, but the GDP figure is probably going to be the most important. In general, good Chinese news usually helps the AUD (primarily) and the yen crosses (hopefully), whereas bad news hurts them. This trade is probably best done on the AUD/USD or AUD/JPY. Estimates for this quarter are somewhat wider spread than usual, so there's a bit more of a chance to see a surprise here than the last release in October. Sometimes the market will react to Chinese data like this with a sharp spike, but more often than not it's something a bit more gradual compared to other news and it's worth holding onto for the meat of the Asian session.
    If it comes out at 10.7% or higher, AUD should show strength for 1.5-3 hours afterwards.
    If it comes out at 10.6% or higher with help from better than expected RS/IP/CPI, etc, AUD should also show strength for 1.5-3 hours afterwards.
    If it comes out at 10.3% or lower, AUD should exhibit weakness for 1.5-3 hours afterwards.
    If it comes out at 10.4% or lower with help from worse than expected RS/IP/CPI, etc, AUD should also exhibit weakness for 1.5-3 hours afterwards.

    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
     
  2. mechtech63

    mechtech63 Corporal

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    Sir Pips,

    Do you plan to trade on the China data release? You detailed it pretty good, so i assumed you would.
     
  3. mechtech63

    mechtech63 Corporal

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    deleted a repeat post
     
    #3 mechtech63, Jan 20, 2010
    Last edited: Jan 20, 2010
  4. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Yes, I traded the release and the numbers were leaked about 2 minutes beforehand which led to some crazy short term whipsaws. Eventually the better than expected numbers gave AUD pairs some modest gains if you held on.
     
  5. mechtech63

    mechtech63 Corporal

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    I set up a straddle trade on each side 2 minutes prior, with 15 pips SL. It spiked and opened my short trade. I had a 20 pip buffer to guarantee direction before trade trigger....well it only went 2 pips over then retraced and closed my trade for a loss. Only lost $150, since it was just a speculation on if it was profitable this way. Not much action as I had hoped.

    Hope your feeling well Sir Pips.
     

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