Sir Pipsalot
Former FPA Special Consultant
- Messages
- 511
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
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
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