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Sir Pipsalot's Thursday Market Update 09-02-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Sep 1, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    Risk appetite got a nice lift today, and while EUR/USD was able to benefit, USD/JPY remains contained around resistance. While I'll probably be looking to sell EUR/USD sometime soon for a long term trade, I think USD/JPY is the better short here between 84.30 - 84.75 (now 84.36). I would short USD/JPY at market as long as it's somewhere in that sell range, or set up a limit order to short it if it was already below 84.30 at the time. A SL around 85.00 sounds appropriate with an initial TP around 83.65-75, and a final TP near 82.30. As far as EUR/GBP is concerned, I'm sticking with it long to the final TP a bit ahead of 0.8600, but will let you know if I close it earlier or shift my TP down.

    Stocks managed quite a sharp rally today right into my 1070-1080 sell range (high was 1082) on the S&P 500 futures fueled by a variety of factors. I still think we'll be topping out near this region, (possibly around 1085 in the next 1-2 days), so for the more recent short from this area, I remain short with about a 30 point SL, with a partial TP around 1040-1045 (already hit once, but back in), and final TP around 1000-1010. I also remain short from 1020-1030 from a few weeks ago. It is possible that the stage could be setting for a new rally phase, but I don't see it as a huge threat just yet, but I'll keep a close eye on things in case sufficient evidence builds to close my shorts and get neutral or flip long.

    In news Wednesday, US ADP came out too close to expectations for a trade, but US ISM Manufacturing came out incredibly high and led to a 6 point rally on S&P futures in the first minute, and 10 points within 13 minutes. USD/JPY even got into the action with a 40 pip move which it hasn't done for ISM numbers in quite some time. In news Thursday:

    0330 Swedish Interest Rates (3/4 economists expecting 0.25% hike to 0.75%) - If you can trade USD/SEK or EUR/SEK, this could be a good one. In their last Interest Rate Decision (2 months ago), the Swedish Riksbank did their initial rate hike, and now there's a bit of controversy over whether they'll hike again. Keep in mind though that SEK pairs trade with very different spreads and magnitudes than more common pairs, so familiarize yourself with them first.
    --If they hike rates by 0.50% or higher, that's clearly not expected and EUR/SEK should sell off by 1000 pips.
    --If they hike rates by 0.25%, it's somewhat expected, but EUR/SEK should still sell off by about 300-500 pips.
    --If they keep rates unchanged at 0.50%, there should be a strong adjustment pushing EUR/SEK higher by 500-800 pips.

    0745 ECB Interest Rate Decision (no change expected) - I don't even plan on watching this as they never release a statement and have almost zero chance of changing rates at this time. Typically they'll telegraph their moves well in advance.

    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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