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Sir Pipsalot's Daily Market Update 12-16-2009

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Dec 16, 2009.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    The EUR/USD extended a bit further lower yesterday on concerns that Austria's 4th largest bank may require nationalization. The trend has very obviously turned down as we've discussed over the last several weeks. Some projections and expert analysis put this at a very large trend shift that could see the EUR/USD lose 3000 pips or more, and I tend to agree that's a good possibility, so it's definitely worth looking at from a long term standpoint. In the meantime, the next decent opportunity for entry will be after a relief rally on EUR/USD which should hopefully retrace at least 38% of the move down so far, but possibly more. Right now, 38% sits right around 1.4740 with other key fibs around 1.4820 and 1.4900. Entering short at any of these levels if we can get enough of a bounce has a good shot at working well.

    In stocks, the picture continues to look muddy short term with a good chance of a long term selloff just around the corner. For now I await a break below 1084 on the S&P 500 to signal further downside pressure is at hand, or a rally up to the 1120's to add short for a medium to long term trade. One key pattern I brought up yesterday is that FOMC interest rate decision days tend to be stock market bullish, so a swing trade long from here (1103.75 on ES futures) looking for 8-10 points is more likely to work than fail.

    In news Tuesday we saw UK CPI and German ZEW come out too close to expectations for a trade. AU GDP came in barely low enough to hit our sell trigger, and we got about 35 pips of downside as predicted. After some retracement though, the AUD/USD eventually broke much lower on the back of a dovish speech from an RBA member. In news Wednesday:

    0430 UK Claimant Count Change and ILO Unemployment Rate (12.5K and 7.9% expected) - This release is complicated because a lot of numbers all get released together. In my opinion, these are the two most important of the bunch and have the best chance of moving the market if either deviate significantly, and especially if they agree.
    If CCC comes out at 0K or negative or ILO UR comes out at 7.7% or lower, GBP/USD should rally 40 pips.
    IF CCC comes out at 25K or higher, or ILO UR comes out at 8.1% or higher, GBP/USD should fall 40 pips.

    0830 US CPI Ex Food & Energy (0.1% expected) - Look out for US Housing Starts on this one too (expected at 574K). If the numbers disagree especially with Housing Starts coming in 40K or more from expectations, I'd stay out. On a side note, the high PPI numbers Tuesday may lead to some prenews strength for USD as the market gambles on a higher CPI to accompany it.
    If Core CPI comes out at 0.2% or higher and US HS isn't horrible, USD/JPY should rally 30-40 pips.
    If Core CPI comes out at 0.0% or lower and US HS isn't much higher than expected, USD/JPY should fall 30-40 pips.

    1415 US FOMC Interest Rate Decision - The market in general expects nothing from the FOMC. In other words, they're expecting no change to any of it's policies. Therefore, any policy change on interest rates, general attitude towards the economy, quantitative easing, or unwinding of special programs would have a large effect on markets.

    If they hint at tightening interest rates sooner rather than later, USD should see broad based gains just about everywhere (sell EUR/USD)

    If they hint at holding off on interest rates indefinitely (more dovish stance) despite additional signs of the recovery, USD should weaken broadly (buy EUR/USD)

    If they shift policy towards tightening of liquidity provisions or more aggressive unwinding of special programs, risk aversion should take hold (sell EUR/JPY)

    If they decide to expand or extend any of their special programs or QE, risk appetite should flourish (buy EUR/JPY).


    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. Elma

    Elma Recruit

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    Hi Sir,

    Can you pls recommend which website will post the news result immediately just after every news announced so that we can act accordingly based on your recommendation to buy or sell.

    I found that some website post the news result too late so when we want to act the market already in the half way move of the news impact.

    Thanks
     
  3. Rubin Hood

    Rubin Hood Private

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    Thanks again for sharing your wisdom Pipsalot!

    Just a note that your general outlook in your daily posts is very valuable. The likely direction of the market on a given day is good to know from someone experienced as you.

    I do miss your videos though! I joined this community around the time you stopped so I only saw one. Do you think you'll continue?

    Thanks!
     
  4. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    For fast and accurate news reporting, usually you have to pay for a service that specializes in it. I recommend either Trade The News - Live Audio Breaking Market News Analysis and Futures Calls or The Secret News Weapon

    I'll probably restart daily videos after we get through the holidays in January. I'm working on a better way to host them first and once that's in place, I'll start doing them again regularly.
     
  5. Rubin Hood

    Rubin Hood Private

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    Excellent news! Can't wait.
     

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