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Sir Pipsalot's Thursday Market Update 08-26-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Aug 25, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    It seems the EUR/USD is making an attempt to bottom at the initial resistance I had forecasted around 1.2610. I was hoping that support would give way to a bit deeper support level around 1.2420 (or somewhere in between), but that hasn't happened just yet. If we can get a deeper extention lower, we should be able to play a long after the bottom is clearly in place. If we've bottomed a bit early already, I'll probably stay out of the long side and start gameplanning for the next short trade. FYI, my short from 1.3070 with the Profit Mongers room closed at the final planned TP at 1.2620 and I'm now neutral waiting for the next opportunity and discussing it here.

    Stocks are looking good for a more protracted decline, but they may be staging a short term bottom that could see a pretty decent retracement higher. Shorter term Elliott Wave projections indicate support roughly in the 1030-1040 range and that a bounce should take us towards 1080. With the brief tough of 1037 today on S&P futures, we may have tagged that low and have started pushing up. I don't think it's a good enough opportunity for a long (almost 20 point bounce already), but if it ends up having enough juice behind it to push back up to the 1070-1080 range, it would be a good short from there with a 30 point or so SL.

    In news Wednesday, we saw German IFO some in somewhat high, but not high enough to hit our buy triggers. Consequently, the EUR/USD managed a decent ~40 pip rally, but failed to break above Tuesday's highs and reversed into a selloff shortly thereafter. Also, very low Core Durable Goods caused a 28 pip drop in USD/JPY over about 20 minutes, and the New Home Sales number (which I didn't preview because I thought it was a bad report to trade) did come in very low as well, but only caused a 15 pip downmove which fully reversed and went the other way in less than a minute. In news Thursday:

    0830 US Initial and Continuing Jobless Claims (490K and 4495K expected) - This is not a report I'd typically recommend trading, but we've seen some decent moves lately when Initial Jobless Claims are a solid 20K+ away from expectations. Also look to the Continuing Claims number to make sure it's also coming out in the same direction.

    --If it comes out at 510K or higher, USD/JPY should sell off 20-35 pips and S&P 500 futures should head lower 2-3 points initially and retain a downward bias for the next 30-40 minutes, possibly culminating in a 10 point move.

    --If it comes out at 470K or lower, USD/JPY should rally 20-35 pips and S&P 500 futures should move higher by 2-3 points initially and retain an upwards bias for the next 30-40 minutes, possibly culminating in a 10 point move.

    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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