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Sir Pipsalot's Friday Market Update 11-05-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Nov 5, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    As far as the medium term is concerned on EUR/USD I see potential in both directions for various reasons, but it looks as though my early forecast of the EUR/USD rally sputtering out and turning south has potential. I'm going to refrain from commenting more on the current USD for today though and just focus on the two big upcoming news reports:

    0700 CAD Employment (15.0K expected) - This report will pretty much always push some nice price action on the spike for about a 40+ pip move. When there's a conflict with Unemployment Rate though (8.0% expected), the move is generally short-lived and goes the other way. When Unemployment Rate agrees, the move should extend further ahead of NFP. Also keep in mind they're now reporting sub-components for Full Time (30K expected) and Part Time (8.0K) components, but it's not certain yet if either of these will start stealing the spotlight from the headline number.

    Spike Strategy: Even a modest 15K trigger with a slight conflict on unemployment rate usually pushes USD/CAD a solid 40 pips. I'd set up 2 triggers, one for a 15K deviation with 20 pips slippage control, and 15 pips TP, and the other for a 30K deviation with 30 pips slippage control and 30-40 pips TP (may need to close manually, but a bigger trigger should hold on and trend further more reliably).

    Afterspike Strategy: Relative patience is key on this one. If there's a conflict with unemployment rate, a good retracement is likely so wait to get for a bit to try to get a better price or consider staying out. If there's no conflicts and everything's unidirectional, I'd consider getting in at the end of the first minute (as long as it's not a super-huge spike) with the goal of grabbing a modest piece of further momentum. It also may be wise to look to USD/CAD shortly after NFP for opportunities for the CAD to resume a big move.

    If it comes out at 30K or higher, USD/CAD should fall 40+ pips.
    If it comes out at 0K or lower, USD/CAD should rally 40+ pips.

    ----------------
    0830 US Nonfarm Employment Change & Unemployment Rate (60K and 9.6% expected) - This report is often complicated with a lot of intricacies that are hard to forecast for, but here's the gist:

    1) Employment Change should dominate the intial spike move.
    2) Unemployment Rate (if deviation is 0.2 or more) should dominate the ultimate follow-through.
    3) Revisions to prior numbers haven't been a big deal in the last 6 months, but you never know when we'll start getting some shockers like the old days... keep an eye on it just in case.
    4) USD/JPY has turned sour on news the last couple of months. I would shift focus back towards GBP/USD, EUR/USD, and USD/CHF. I like USD/CHF best for the spike on this one (better initial volatility), and EUR/USD for the afterspike (slower to react, better follow-through).
    5) I'd look for about a 50 pip spike move (maybe a bit more) if a clear trigger on Employment Change is hit. If the surprise is large or Unemployment Rate helps, I'd expect to get closer to 100 pips within about 30 minutes.

    If Employment comes out at 110K or higher, EUR/USD should rally 50+ pips, and USD/CHF should sell off 50 pips.
    If Employment comes out at 10K or lower, EUR/USD should sell off 50+ pips, and USD/CHF should rally 50 pips.

    If Unemployment Rate comes out at 9.8% or higher, EUR/USD should extend lower or potentially reverse lower.
    If Unemployment Rate comes out at 9.4% or lower, EUR/USD should extend higher or poetentially reverse higher.

    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. Vladon

    Vladon Private, 1st Class

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    Just for the history: your recommendation on NFP was absolutely wrong.

    Thank the God, I was just occasionally late to follow it.

    All in all, your performance recently significantly deteriorated, and
    I am, personally, not interested in any of your "predictions" any more.
     
  3. Mark Harding

    Mark Harding Corporal

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    Rude

    Wow - that's pretty rude. I'm personally very happy to have Sir Pips back in the action - thank you as always, SP...
     
  4. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Yah, I definitely got it wrong on NFP this week. My mistake. I've been really busy working on a multitude of projects including my naval career and that's why I haven't been putting out signals as frequently as I used to.

    I think I have a good plan moving forward though to keep productive and put some useful information out there. I want to make sure that if I'm broadcasting something out there with a signal, it's definitely worth your time to read and consider applying. If you have constructive criticism, I'd appreciate it, but if you're not interested in what I have to say or just want to flame... please move on.
     

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