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Sir Pipsalot's Thursday Market Update 05-20-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, May 20, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    The EUR/USD bounce continued as expected Wednesday, and ran right into 1.2430 during the Asian session which was right at the top of a hourly chart channel boundary (connect highs from May 12th and 13th), which is just 20 pips shy of the March 2009 lows as well. Cactus Jack (one of my trading partners) happened to notice topping action on EUR/USD while I was helping some traders in the chat room, and when we both looked at it, it looked like a good trade for 70 pips or so, but I'm not fully sold we've finished this retracement just yet. While it's definitely possible the bounce may have topped out there; another compelling technical level to bring about a retracement high would be right around 1.2500 (38% retrace of latest leg down, and corresponds to the May 9th lows).

    Very short term, the EUR/USD may find some support here around 1.2320-30, or could continue to work down within this down channel that is quite wide on the hourly (connect May 16th and May 18th lows). With that uncertainty, a short term trade from here (1.2345) seems haphazard, so I'd prefer to try a short from the next decent level at 1.2500 if we can get there. For SL, 50-150 pips depending on how much you want to reach for. Decent areas for TP's could be 1.2430, 1.2330, 1.2250, 1.2160, or if you want to reach for a chunk of a more sustained selloff, try a TP a bit ahead of 1.1000 and I'll help you fine tune a more precise level when we work closer to there.

    USD/JPY continues its clear downside as well with encouraging signs we should see more. Those who got short with me from my signal last week around 93.20 should be out for +100 and +200 now and holding out for +600 on the final portion.

    In stocks, we have not seen another bounce to the 1140's, and it looks like odds are starting to favor that possibility even less then they did yesterday. Those who are short (should be most who decided to trade along with me recently) could wait until around 1040 for big TP's, but it's smart to take some profit now at 1116 or better. Since the larger trend may have shifted towards a very substantial selloff (70%+ potentially), consider holding a portion of your short with a very large TP (450 points or so). When an identified trend is moving along and you grab pieces of the downside, it can be very profitable to accumulate a short position by keeping 10-25% of each trade in short with an ambitious multi-month TP.

    In news Wednesday, I didn't preview the US CPI trade, but it turned out to be a bit of a dud anyhow on a mediocre deviation. In news Thursday:

    0430 UK Retail Sales with Gasoline m/m (0.2% expected) - The UK has recently started to release Ex Gasoline retail sales figures, but the BoE and the market as a whole have not embraced them as more valuable than the total retail sales... at least not yet. Like many UK trades lately, it's been making a habit of reversing on itself in the first minute or two and at the very least carving a nice retracement, so trading against the news on this one as we have in the last couple of weeks seems opportune.

    --If it comes out high, try shorting about 40 pips above prerelease in the first minute or two looking for 20-30 pips profit. A second surge up 5-20 minutes later could provide a second similar trade with a bigger profit potential.

    --If it comes out low, try going long about 40 pips below prerelease in the first minute or two looking for 20-30 pips profit. A second surge down 5-20 minutes later could provide a second similar trade with a bigger profit potential.

    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 20, 2010
    Last edited: May 20, 2010
  2. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Update

    Hey guys, I actually have looked at it more closely and think some profits should be taken on the stock short here if you're in any full trade still from the last few weeks at 1150 entry or above. Take anything 1116 or better for a partial TP now (currently 1110). My next substantial TP is around 1040 and after that, I'll only have a little in for the bigger potential selloff, so I'll be looking for more trades at that point.
     
  3. NATAN SHAIN

    NATAN SHAIN Private

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    help

    hi
    what to do on eur/usd ?
     

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