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Sir Pipsalot's Friday Market Update 05-07-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, May 7, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Wow what a day! The EUR/USD posted 7 opportunities to sell it at the hourly chart 10 EMA, and 6 out of 7 of them worked for 60+ pips, while the last one at about 10pm failed for -50. Not a bad way to trade momentum, eh? You don't need me to tell you guys anymore that we've resumed the downtrend, lol. Obviously we can't be too hopeful for picking a solid bounce and shorting there, so we'll have to wait and see if one develops first, then gauge it's potential. In the meantime, I'd keep working the hourly chart 10 ema as long as price is heading lower. In fact, we're there now at 1.2675, so it's not a bad short even now, but usually it's best to let price work back below the 60 sma before looking for further entries. Again, I'm looking for something on the order of 1.1800 or lower on this meltdown.

    Our USD/JPY short worked perfectly as well and I had my TP at 91.20. Obviously there were a ton more pips to the downside on today's meltdown, but I'll take my 250 pips and am quite happy with them. USD/JPY and particularly other JPY crosses like EUR/JPY and GBP/JPY should be under significant pressure as stocks continue their slide.

    Well, looks like I was finally right on the stock trade. My shorts from 1195 and 1171 both closed at a TP around 1090 on futures. I am now reentering short on futures after that late NY whipsaw pushed us back up now at 1123 with a 50 point SL. With the NYSE and Nasdaq virtually having a run on many of their stocks, it's obvious this game of charades is over... Assuming this is the big recovery high we've been looking for (evidence continues to build that it is), then this should be a selloff equal or greater in magnitude to the last major meltdown which means a 70% selloff to UNDER 400 on the S&P 500. No joke.

    In news Thursday, UK Services PMI was a total failure. What is usually a reliable report just barely blipped down and turned around. It happens every now and then though. I think Boko Maru put it best in yesterday's post where he said before or during a big meltdown, news trades often tend to bonkers and reminded everyone back in 2008 we made more money trading in the opposite direction of the news than along with it. I completely agree that we're seeing evidence of that, so moving forward we might have to get a bit more creative on how we approach some trades. In news Friday:

    0700 CAD Employment (25K expected) - This is another report that's been reliable even on quite small deviations, but still exercise some degree of caution given the current frantic conditions. Usually this report is good for at LEAST 40 pips, but usually more like 70-100.
    If it comes out at 40K or higher, USD/CAD should fall 40+ pips.
    If it comes out at 10K or lower, USD/CAD should rally 40+ pips.

    0830 US NonFarm Payrolls (190K expected) - We have not seen a big surprise on NFP for quite some time. Now with the markets noticably in panic mode, the dynamics may be shifting back towards more of a EUR/JPY or GBP/JPY type of move, but the safest place to trade it still should be USD/JPY. Sometimes what will happen though is USD/JPY will move fairly quickly and level out, while EUR/USD is kind of weird to start, but then gets moving in the same direction to keep EUR/JPY going as USD/JPY starts to hit a wall. That's usually the dynamic we see when yen crosses and risk aversion are dominating price action, so look out for something like that. Also watch out for conflicts with the Unemployment Rate (expected at 9.7%).
    If it comes out at 240K or higher, USD/JPY should rally 50+ pips.
    If it comes out at 140K or lower, USD/JPY should fall 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
     
    #1 Sir Pipsalot, May 7, 2010
    Last edited: May 7, 2010
  2. koco

    koco Private, 1st Class

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    Fill on Canada?

    Got anyone fill on Canada?
     

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