Sir Pipsalot's Tuesday Market Update 05-04-2010

[Sir Pipsalot]

Hey folks,

The EUR/USD has gotten beat up a bit to start the week, but with the odds still tilted towards either further consolidation or perhaps a more substantial push higher... even if it's only a 50-50 trade at this point (I think the odds are a bit greater) the amount of pips on the upside far outweigh the risk associated with an SL below the 1.3114 lows. Right now the EUR/USD is at 1.3162, and I think a long with a 50-55 pip SL below those lows is a decent trade with initial TP around 1.3270-80 and final TP around 1.3800.

Stocks are poised for a bit of a selloff, but it could really use some confirmation to solidify. Right now S&P futures are at 1198, so a riskier (but potentially rewarding) trade would be a short here with about an 11 point SL (just above Friday's highs). For a safer trade, we need to wait for confirmation from a break below those 1176 lows from last week. Once we break those I'm confident we'll see at least 80-100 points of followthrough in the coming weeks.

In news earlier, we saw the RBA raise rates as somewhat expected, but there was a lot of anticipation of that hike, so there was some profit taking involved. Also, there's mixed language about whether or not they will hike again showing some hawkish stance on inflation, but acknowledging that interest rates have now normalized. In news Tuesday:

0430 UK Manufacturing PMI - I'm not so sure this is consistently tradable... I'm going to skip it this month

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

 

[Lee Barker]

My tech question is all this rapid down force on the eur/usd with it not really pushing that far down must have some affect onto it ( kind of like a spring being wound up ) has to break some time. I see the market moving back up to 1.38 or some thing close to it then moving back down past the 1.30 level.

Have you ever seen when you are trading and you see the market moving to the double 00 area and you think you can place a quick trade because you think its going to hit that psychological area and then it comes so close then pulls back for a bit before it gets there. See that's what i'm seeing here! Looks like its going to hit that 1.30 area but not so fast. Market will mess with you first ( Nature of the Beast )

That's my 2 cents/pence

PS: im going to the foam pit on Thursday to practice my backflips! wish me luck

EDIT: We are 23 pips away from the 1.3 and lets hope the technical kicks in at this level then move back up some!

 

[mechtech63]

All the technicals say that we should see a bounce, however the Euro keeps digging a deeper hole. Seems the plain stone cold fact is that folks are very leary of the Euro and it's gonna take some time to invest in it again. 1.3071 at this writing.

 

[Tyrion]

I made a buy order for 1.3030 and it was already hit and it's still pulling down. now it's at 1.3008. wish I was a little more patient and wait for it to really hit 1.3000 level.only after things should become more clear.buying at 1.3120 level as sir pipsalot suggested and also technical analysis was too soon.though it will be quite strange to see it going below thw 1.3000 level. hope it will finaly bounce up.

 

[Brian Rue]

Yeah, I didnt expect it to drop 200 pips in 14 hours. But at this point I'm extremely leary of trying to pick a bottom. Stochastics has been stuck on oversold for quite some time on several different time frames, but it keeps on tanking. I'm not sure what to make of all this, so until SirPipsalot or Sive Morten give us some guidance, I'll be waiting this out.

 

[Tyrion]

ok, so i finaly lost this trade. i bought it at 1.3030 with SL 50 pips and it droped all the way down to 1.2980 so... nice one. just now i've been reading in one of slovenian finance magazines that our country should have difficulties to gain money for helping greece (we're in EU money zone). looks like it's heading the same way as greece our country so things look wors and worse for the EU. thinking of it I can't even remember why I was buying EUR/USD in such f**cked up situation?! should of wait on this one for couple of days more...

 

[mechtech63]

Like I said, technicles right now hardly mean squat. People are taking SirPips info and pulling the trigger without thinking for themselves. The question is: Where's the bottom? No one can tell you exactly or even closely where that is. You have to wait for it to develop. It's fine to not be on the ground floor of the move up. Better to have confirmation, then jumping to soon. That said, I got jumpy last night and placed a small $1 per pip trade going long. so far down 200 pips. Still open with plenty of leverage to go, but it's a lesson learned.

 

[Lee Barker]

Well i dont know about you but this EURUSD is oversold!!! Its time for a MONSTER... and a Monster pullback. I still hold sirpips to the move all the way back to the 1.38ish area. There is going to be some news saying some toss about the bailout and then the pullback and the combination of the news is going to rally like no mans business!

Mechtech, i hear you about being jumpy! i do it every day! But when i think i can pull 2- 7 pips i only have the smallest lot size! 0.10 =) im down 340 pips on that one and just kept it going just for the hell of it. Counter trade it all the way! Not the best way to trade but it keeps your head working fast and the gray hairs coming.

Cheers

 

[mechtech63]

Well i dont know about you but this EURUSD is oversold!!! Its time for a MONSTER... and a Monster pullback. I still hold sirpips to the move all the way back to the 1.38ish area. There is going to be some news saying some toss about the bailout and then the pullback and the combination of the news is going to rally like no mans business!

Mechtech, i hear you about being jumpy! i do it every day! But when i think i can pull 2- 7 pips i only have the smallest lot size! 0.10 =) im down 340 pips on that one and just kept it going just for the hell of it. Counter trade it all the way! Not the best way to trade but it keeps your head working fast and the gray hairs coming.

Cheers

Well, looks like we run the same way. I also do 0.10 lots. That way I can fade along the way or pick up some profit. I like a good amount of margin. That way if I play it wrong, I know it will come back eventually. Not sure how much EUR/USD will pull back. Seems to hard to hit 1.38's, with all the Euro crap coming down. Then again, the dollar aint all that great either. It's currently the only safe-haven currency, being the CHF and Yen have lost their luster. If the Greece can live up to all that is expected and I mean to the "T", then it's possible. A default or to many other countries getting in line for a loan will make 1.3800 a tough goal to hit. I now have 3 long trades in and running negative, but lots of margin and hope.

Good luck

 

[Ricex]

Looks like people are still putting their faith in worthless indicators rather than using their eyes to look at what is happening. So your stochastic is over sold...... it don't mean sheeeet! people.

Pull up a 4hr chart, zoom out, and ask yourself one question "why on earth would I want to be going long EUR/USD?"

There are no heros in forex, you don't get bonus points for picking bottoms or tops.

Recent COT data shows LONG DOLLAR positions up from $9.78 billion to $16.24 billion!
and your going long the Euro?

Come on folks get a grip.