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Sir Pipsalot's Monday Market Update 08-30-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Aug 29, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    EUR/USD may be approaching a top here Monday with fib retracement resistance in the 1.2790's, but the retracement could also play out with a rally to around 1.3000, so it's a bit premature to jump in short without more confirmation of a high already in place.

    EUR/GBP did see some upside after my long Friday, and has since settled back into the upper end of my 0.8160-0.8210 buy range. If/when we work through resistance at last Wednesday's 0.8236 highs, we should see plenty of follow-through to the upside. I still consider a long as described in Friday's signal to be a good trade to enter here on Monday as well.

    USD/JPY may be poised to break through momentum-based resistance at 85.92 (Aug 19th high). USD/JPY is now at 85.43 as I type after a disappointment on its Interest Rate statement. If it breaks up through 85.92 and holds on, that would indicate we will start retracing higher on USD/JPY some % of the 900 pip selloff from early June. That should take us at least as high as 87.00 (near 38% retracement) and possibly in the area of 88.20 (50% retracement). I would look to buy USD/JPY on dips after a clear breakout higher through 85.92.

    Friday saw some great action on stocks as we briefly dipped a few points below 1040 into my 1030-1040 buy range on S&P futures, and subsequently rallied up 27 points from there into the close. Now we've rallied just barely into my sell range from 1070-1080 (now 1071) which I'm sticking with at least for Monday. My plan for new trades is to short in this region with a stop a bit above 1100 and TP around 1040 initially. I'm in a more long term short though from 1120 as well.

    In news Friday, we saw both US and UK GDP revisions come out too close to expected for a trade. At 1000, Bernanke's speech at Jackson Hole failed to announce any new policy action, which prompted USD short covering and a EUR/USD selloff of 40-50 pips as I had forecast, but the speech was inherently quite dovish and Bernanke stated that the Fed was willing to take further action, and even brought up deflation, so ultimately the price action reversed course as those statements are definitely USD weakening. In news Monday:

    0830 Various Small US Reports - I'm not trading these, but if there's a huge (about 1.0% or greater) surprise on Spending or Income, we could see some corresponding action on USD/JPY and S&P futures.

    2130 AU Retail Sales and Building Approvals m/m (0.4% RS, and -0.7% BA's) - Retail Sales always dominates the initial price action on this release, but usually when there's a conflict with Building Approvals, the move is more limited and more subject to reversal, so if Building Approvals comes out at 5% or higher, bias towards the long side, and if it comes out at -6% or lower, bias towards the short side. By bias, I mean expect a bigger, longer move in that direction, or a smaller, shorter move in the opposite direction.

    --If RS comes out at 0.8% or higher, AUD/USD should rally 30-50 pips.

    --If RS comes out at 0.0% or lower, AUD/USD should fall 30-40 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, Aug 29, 2010
    Last edited: Aug 29, 2010

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