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Sir Pipsalot's Thursday Market Update 03-25-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Mar 24, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Well the EUR/USD managed to break that support and hit my final 200 pip TP this evening. If you shorted EUR/USD along with me on Monday night or Tuesday, you can take profits here in the low to mid 1.3300's, or if you want to hold out for more, feel free to trail the SL down maybe 20 pips behind the 20 EMA on the 1h chart to tighten things up a bit to lock in profits (1.3375 as I speak). If I wasn't already out, I'd probably have a final TP set just ahead of 1.3200. There seems to be a lot of potential reasons for strong support at various levels in the 1.3000-1.3200 region, so I'd rather get out just ahead of that area (in fact, I'm already out now).

    On the EUR/USD, the stage is set for an oversold EUR/USD to set a low and stage a more major retracement; however, that which is oversold can and often does become more oversold. Right now I think the 1h chart is the key to this move... as long as we hold below the 20 EMA on the 1h chart, I think selling on any touch or near touch of the 5 EMA or 10 EMA is a good trade for 20-40 pip scalps, or as entries for a swing trade with a trailing SL. Just keep in mind that the longer this extends, the more likely each successive trend following trade is to fail.

    For the reversal play on EUR/USD, I think a clear break of the 20 EMA on the hourly will target the 60 SMA. Right now that would mean a break of 1.3350-60 would target another 70-100 pips higher in follow-through buying.

    Keep in mind though that the long term direction on the Euro I've been preaching since Dec/Jan is short now and will be for quite some time. From a long term investing standpoint, the USD strength still has quite some way to go. I will not be playing any bounce opportunities personally unless they set up very obviously (i.e. double bottom at clear support), as I will focus on further short entry opportunities.

    In stocks, we had a bit of a retreat today, but we require a futher decline below 1159 on ESM0 (S&P 500 futures) to initially confirm a turn lower, and potentially 1136 to provide sufficient confirmation for a more extended decline. I think a patient sell after a clear break of 1159 is a decent short-medium term trade while a sell after a clear break of 1136 makes for a solid medium to long term trade.

    In news Wednesday, everything came out too close to expected for a trade, but housing numbers continue to disappoint (4 months straight and at new all time lows on NHS) which goes a long way to support my bearish long term market view, but has little short term implications. In news Thursday:

    0530 UK Retail Sales Ex Automotive Fuel m/m (0.6% expected) - This release has just gotten more complicated now as they're releasing a new figure including Gasoline (0.8% expected m/m). The traditional figure we've always seen has always excluded gasoline, but with the new release we now have to watch all 4 releases (each have m/m and y/y components) to look out for conflicts. Even without conflicts though, UK Retail Sales lately has potential for a strong retracement, so consider waiting for something 50% or closer to prerelease in the first 3-20 minutes. If everything comes out the same direction though, and we have a bit of a trend on our hands, I wouldn't be surprised to see this trend nicely without a retrace similar to what we saw in Dec 2009. Long story short, and consolidative price action will likely foreshadow a strong retrace for better entry, while more of a trend leading into the news confirmed by it may make it more worthwhile to jump in early without a retracement.
    If it comes out at 1.2% or higher, GBP/USD should rally 40 pips.
    If it comes out at 0.0% or lower, GBP/USD should fall 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
     
  2. mechtech63

    mechtech63 Corporal

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    I going to try and sound real dumb here by asking what EMA means. :embarrassed:

    OK, I figured it out...now that it is hypertexted.
     
    #2 mechtech63, Mar 24, 2010
    Last edited: Mar 25, 2010

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