Sir Pipsalot's Thursday Market Update 2-18-2010

Sir Pipsalot

Former FPA Special Consultant
Hey folks,

The EUR/USD sold off from the top of it's 4h chart range and has worked into support here in the 1.3500's. If you got short in the 1.3700-1.3800 range as I suggested yesterday, take some profits and hold out some short with a generous trailing SL for now as a breakout lower to 1.3450 and even 1.3000-1.3100 are posibilities. Selling 4h chart rallies works well in a downtrend, but buying 4h chart dips into support in a downtrend is lower probability; however a long from the 1.3500's here I think it may work out alright. Personally though, I plan to just hold a bit short from yesterday and trail my SL down to 1.3625.

Stocks worked up to 1100 and are likely to push just a bit higher to maybe 1104. With options expiration Friday, it seems like the max pain scenario is further consolidation, so that means that's what we'll most likely see. Next week holds good potential for another down leg to new reaction lows.

In news Wednesday, we saw the market sell off nicely ahead of 0430 UK news as I highlighted. Selling GBP/USD an hour before the report and closing either right before or right after the news was good for just over 40 pips down. The actual news was noticably bad on the Claimant Count Change, but with the big prenews anticipation and no help from the Unemployment Rate figures, there was a bit too much short covering after the fact for a good short term move down. In news Thursday:

0700 CAD Core CPI y/y (1.9% expected) - We had set this trade aside, but last month it worked beautifully on a fairly modest 0.2% deviation. With inflation numbers starting to move the market more, it's a good time to start trading this indicator again. As long as the m/m number comes out in the same direction (0.0% expected), we should see a decent reaction.
If it comes out at 2.1% or higher, USD/CAD should fall 30+ pips.
If it comes out at 1.7% or lower, USD/CAD should rally 30+ 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

To our success!
Sir Pipsalot
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