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Sir Pipsalot's Daily Market Update 11-06-2009

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Nov 6, 2009.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Outlook Summary:
    Roughly the same for EUR/USD, GBP/USD, Gold, Silver & Stocks:
    Longer term: SHORT with entry opportunities now.
    Shorter term: Somewhat neutral but bias will turn short again upon appearance of lower lows on the 1hr chart.

    Today definitely had some funky action as both the GBP and Euro experienced a lot of whipsaws surrounding their interest rate language. The overall trend down is still most likely, but at this point it's probably best to wait for some lower lows to develop before looking to enter a short. However, if you spot a good top, try to milk it because waiting for a lot of lower lows confirmation could cost you a lot on your entry price if you're looking to hold the trade for awhile. For held short trades, I plan to stick with my planned SL and be patient. If the downtrend remains intact, we will see a more decisive turn down start either Friday or Monday.

    The same goes with both stocks and Silver. Stocks in particular had a quite strong day back into my 1050-1065 sell zone even exceeding it slightly. We could see a bit more of a push to 1071 on the S&P cash (68% retrace), but I'm not expecting a whole lot more upside, so I feel comfortable holding short or even entering here. For this to confirm as more of a multi-week or multi-month type of short, we'll need to see the October 5th 1019 lows give way.

    In news Thursday, as I mentioned, GBP and Euro news just created a lot of whipsaw action. The reason why the GBP ended up gaining so much on the decision was not so much about expanding QE by less than expected, but also them expressing fears about near term inflation. The more hawkish than expected inflation tone took the market by surprise and turned the initial whipsaw into something more sustained heading into the London close. In news Friday:

    0700 CAD Employment (10K expected) - One thing I noticed today was when looking into the CAD Ivey sub-components is that the employment number came in quite low even with the overall index higher than expected. That could be a good leading indicator that CAD employment is set to disappoint. In fact, Kathy Lien and Boris noticed the same thing which makes me feel even more confident about that outlook. With the long history of sharp moves on this report, it might be worth the gamble of getting in long USD/CAD before the report (1 hour, 15 minutes, 1 minute, etc) betting on either a weak number or others like us expecting a weak number and running it up prenews rumor-style. The better your broker is with tight spreads and stop losses around news, the more comfortable you can feel trading this in case it comes out high and USD/CAD sells off on ya.
    If it comes out at 25K or higher, USD/CAD should sell off 40 pips.
    If it comes out at -5K or lower, USD/CAD should rally 40 pips.

    0830 US Non-Farm Payrolls (-175K expected) - FYI, watch out for revisions to prior months and pay attention to Unemployment Rate (9.9% expected) and make sure it agrees in order for the move to behave as I'm describing. What you should trade on this depends on how you want to trade the report. The last several months I've identified a tendency that has paid off consistently on NFP so far. Here's the low-down:
    1) EUR/JPY (and similar yen crosses) will likely have the sharpest initial reaction as EU and UJ spike in the same direction. The triggers I provide will focus on EUR/JPY.
    2) USD/JPY will likely have the most sustained move, so this is the best pair for Felix-style retracement opportunities or chasing if necessary. Typically the move will hold up for over an hour.
    3) EUR/USD (and other USD majors) will usually stage a whipsaw which can set up for an excellent reversal trade. Sometimes it's fast within 1 minute or two, and sometimes it can take 5-10 minutes to reverse. Usually though the initial risk based move turns into a USD affair with EU & GU turning around and heading the other way, sometimes very dramatically.
    Suggested Triggers:
    A) If it comes out at -100K or higher with no major back month downwards revisions and unemployment rate at 9.9% or lower, EUR/JPY should rally sharply by 80-100 pips.
    B) If it comes out at -250K or lower with no majore back month upwards revisions and unemployment rate at 9.9% or higher, EUR/JPY should fall sharply by 80-100 pips.
    C) If it comes out between -200K and -100K with no major back month downwards revisions and unemployment rate at 9.7% or lower, EUR/JPY should rise by 40-70 pips.
    D) If it comes out between -250K and -150K with no majore back month upwards revisions and unemployment at 10.1% or higher, EUR/JPY should sell off by 60-100 pips.
    E) If there are major back month revisions that conflict with the surprise on the current month, I would stay out of the mess and just look to scalp the volatility with your technical tools.


    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, Nov 6, 2009
    Last edited: Nov 6, 2009
  2. Vladon

    Vladon Private, 1st Class

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    Despite my critical remarks previosly (and in the future, if any :)), I have to say that
    I do enjoy your, Sir Pips, signals (when you have a mood to make them properly :)).

    For example, your todays analysis of the market reaction to CA Employment Change
    data release was wonderfull. (But, unfortunately, I missed it. :()
     
  3. kc0793

    kc0793 Recruit

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    brilliant prediction on the CAD mate. Lets see how the NFP does, although, to be fair, its next to impossible to predict how the market will react from one NFP to the other.
     
  4. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    I beg to differ. Numbers came out as scenario D and we saw almost exactly what I described. Let me know guys with a reply if either the CAD prenews recommendation or the NFP guidance helped you make some money today. I have a feeling most people who used my information to guide them through a trade today ended up doing well. I like a nice pat on the back every now and then =P
     
    #4 Sir Pipsalot, Nov 6, 2009
    Last edited: Nov 6, 2009
  5. Vladon

    Vladon Private, 1st Class

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    Well, as I have already mentioned before, your todays CAD prenews recommendation
    was just wonderfull. (Though I, personally, failed to use it, just because I was busy with
    something else and just forgot to look at the charts one hour before the release,
    as you kindly advised us.)

    By the word "wonderful" I mean that I was definitely unable to make such a prediction,
    and if I would play this news, the profit (from 50 to 100 pips) I would make on it, would
    exclusively be due to your insight.

    As to NFP, it indeed played according to your scenario D, and I, personally, made
    about 50 pips on it, but in this case it is more difficult for me to judge if it was done
    due to your recommendation or just because it was too obvious anyway. (Well, may
    be I was a bit more confident in what I do with your recommendation than I would be
    without it. :))

    Anyway, I should say that what you do is very helpfull for the community, and it would
    be nice if you could continue your service as long as possible. :)
     
    #5 Vladon, Nov 6, 2009
    Last edited: Nov 6, 2009
  6. mekino1000

    mekino1000 Recruit

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    Thanks Sir PIS A LOT!!

    Your pre-news prediction worked perfectly on CAD. Emp. Change! I made 40 pips cool b4 the news!! hahahaaaaaaa:):) keep up the good work!!!! I love U!!!!
     
  7. bhasspoken

    bhasspoken Recruit

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    Your News Predictions

    Hi Sir

    Ypu are the top man with your pred. I only wish I knew how to trade them, I have tried but the moves happen so quick I always miss them, any tips on what I should do to get some pips from this.

    Kind regards
    Glen
     
  8. mechtech63

    mechtech63 Corporal

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    Nailed the EUR/JPY for a nice profit. Very nice.

    Don't see how anyone can lose money betting on the farm....:D

    Way to go Sir Pips.
     
  9. bhasspoken

    bhasspoken Recruit

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    No one lost money, its knowing when to trade the events.
     
  10. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Sir Pipsalot's Daily Market Update 11-09-2009

    Hey folks,

    Outlook Summary:
    Roughly the same for EUR/USD, GBP/USD, Gold, Silver & Stocks:
    Longer term: SHORT with entry opportunities now.
    Shorter term: Frustratingly neutral. Wait-and-see mode.

    It looks like we made some excellent predictions with the news items on Friday with great guidance on both CAD Emp and US NFP, but sadly, the longer term downwards bias has yet to prove fruitful. As I said last week, we need a decisive turn lower by sometime Monday (today) or else the odds will favor this being an extension of the prior uptrend instead of a general reversal lower. This is true mainly on EU, GU, Gold, and Silver, but the S&P 500 (stocks in general) could end up diverging... we'll see. Essentially we're in a "wait and see" mode to start the week, and if things don't turn lower soon, many held longer term shorts will have to take a loss.

    On stocks, 1078 (S&P cash) is likely the next potential topping point for stocks. I had thought 1071 would contain this rally (it did Friday), but with further USD weakness and a bit of strength in futures, chances are stocks will work to that next level at least before turning lower. My mental stop bailout point on my shorts though is around 1090.

    As I already mentioned, both news items from Friday worked ideally for us. I recommended a USD/CAD long before their Employment figures and if you got in long an hour before, it peaked out 100 pips higher shortly after the numbers came out low. The US Non-Farm/Unemployment Rate numbers came out poor along in the scenario D arrangement I described and traded just as I predicted with a big spike 80-90 pip spike down on EUR/JPY, a nice, steady 1 hour move lower on USD/JPY, and a clear reversal situation on EUR/USD where it dropped 50 pips quickly, but turned around into a 100 pip rally from those lows topping out 60-90 minutes after the release. Hopefully one of those outlooks helped you find a trade there. There's no news worth trading on Monday, so we'll wait until tomorrow's signal to preview the news items due Tuesday.


    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
     

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