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Sir Pipsalot's Thursday Market Update 07-29-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Jul 28, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    EUR/USD continues to consolidate in a tightening trading range roughly from 1.2950 to 1.3050. The longer it coils up, the more momentous the impending breakout should be. Once a more confirmed break of either level occurs, look to get in on that momentum on any pullback to retest the broken level (support becomes resistance, or vice versa).

    USD/JPY has now dipped lower to an area worth reentering long (now around 87.25), but as with most trades, the second entry isn't quite as high probability as the first. There's a chance we have carved out an A-B-C-D-E retracement channel over the past few weeks that topped out around 88.00 instead of breaking up to 89.00 before topping out. If that's the case, a buy here won't work very well; however, I still believe the odds are decent that we'll get that final push higher. If you're not already in long, I'd consider a long nearby here with an SL around 86.70, 50-70 pip initial TP and final TP around 89.00.

    Stocks today dipped down right to my buy limit at 1100 near the close today. Based on the trade I mentioned in Tuesday's and Wednesday's signals, I'm long now for a short swing from 1100 looking for 15-25 points with a 15 point SL. While it's possible stocks have topped out a bit early, it is more likely from both a time and price perspective that we'll see somewhat higher highs into next week.

    In news Wednesday, we saw Core Durable Goods out of the US come in low, and we saw about 25 pips quickly, a slow full retracement, followed by resumption downwards. While the move was smaller than anticipated, the prerelease level served as resistance and held on for further downside to develop later in the day which was reassuring.

    With NZ Interest Rates today, they hiked 0.25% as expected, but came out with VERY dovish language calling the economic recovery "patchy" and claiming that the pace of future rate rises may be more moderate. Essentially, they're saying "don't expect us to raise rates next meeting!" and the market obliged by selling NZD/USD readily for a 70 pip selloff over 15 minutes. Assuming the EUR/USD doesn't work itself into a breakout long, I'd be looking to get short NZD/USD if it manages a rally here ahead of or early on in the European session. A short anywhere in the 0.7250-0.7280 range makes good sense with a final target in the 0.7170's.

    There's no noteworth news set for release Thursday, but in tomorrow's signal we'll preview Friday's US Advance GDP release and I'll give some insight into the Chicago Purchasing Manager's Index (PMI).

    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
     

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