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Sir Pipsalot's Daily Market Update 2-3-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Feb 2, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey guys,

    The EUR/USD has reestablished it's downtrend, however it's likely to undergo a bit more retracement. I think the best trade here is to wait for a bit further retracement and aim to short it there. Right now I'm eyeing the 1.4117 to 1.4215 zone as the ideal area to reenter short EUR/USD. I have closed my previous swing short and am waiting for the bounce to leg back in. From a position trading standpoint, just hold through the volatility as the case for EUR/USD below 1.2000 over the next year gets stronger and stronger.

    Stocks are nearing a satisfactory retracement to start reentering short (S&P futures at 1097.50 as I speak). It's possible we could see another decent leg higher before we resume lower though, so my plan is to enter some now with about a 30 point SL, and add some more short if it rallies a bit higher. A good point of resistance a bit higher to look to sell more is right around 1106-1108. I plan to TP partially around 1070, 955 and 869 with this trade. If you're looking to do something a little lower maintenance, look to sell June 2010 puts on the SPY near the money with plans to TP some at double, triple, quadruple, and keep a portion as a long term trade aiming to roll it over to a later expiration and eventually cash out 10x if the market really melts down. I'm employing both strategies.

    Silver and Gold are forming a nice bounce and will probably make for a great short if/when we get the opportunity to short the bounce on the Euro.

    In news Wednesday:

    0430 UK Services PMI (56.5 expected) - This trade should be good for 40-50 pips if the trigger is hit; however, Manufacturing PMI came out huge and was rejected, so if it's not working well quickly... consider bailing while you can.
    If it comes out at 57.5 or higher, GBP/USD should rally 40-50 pips
    If it comes out at 55.5 or lower, GBP/USD should fall 40-50 pips

    0815 US ADP Employment Change (-30K expected) - It's been many months since we last saw US ADP give a decent surprise, so it's hard to say for sure how the market will react. Judging from last month's reaction to the bad NFP reading though, we should see somewhat of a unified USD response with USD/JPY being the safer pair to trade.
    If it comes out at 20K or higher, USD/JPY should rally 40 pips.
    If it comes out at -80K or lower, USD/JPY should fall 40 pips.

    1645 NZ Employment Change q/q (-0.1% expected) - Given the time of release, if the triggers hit this report we'll likely see a reasonable spike, but then consolidation into a tigher range as the NY session closes.

    1930 AU Retail Sales m/m (0.3% expected) - A quick sharp reaction is usually the norm on this report.
    If it comes out at 0.8% or higher, AUD/USD should rally 40-50 pips.
    If it comes out at -0.2% or lower, AUD/USD should fall 40-50 pips.

    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. If you have any questions, you can also email me at sirpipsalot@profitmongers.com

    To our success!
    Sir Pipsalot
     
  2. DTruth

    DTruth Recruit

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    I owe u!!!

    Thanks a lot sir, u are generous. I hope u were able to rise above ur personal stuff.
     
  3. mechtech63

    mechtech63 Corporal

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    Thumbs up dudes.

    So glad there are great folks like the one's at FPA.

    Thank you Sir Pipsalot, Felix and Crazy Cat. I'd be losing money without you.
     

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