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Sir Pipsalot's Wednesday Market Update 06-23-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Jun 22, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

    Dec 11, 2007
    Likes Received:
    Hey folks,

    EUR/USD continued lower in line with my forecast and tested key level support at 1.2250 twice. It's still quite likely we'll continue lower into the 1.2100-1.2150 support area I've been quoting, but as I mentioned yesterday, 1.2250 was the minimum target and it has been reached, so if you are short from 1.2450, by all means take at least partial profits here (1.2274 as I type). For more on the Euro, please read yesterday's extended signal:


    Stocks (S&P 500) continued lower today providing further evidence of a significant top Monday around 1130 where I recommended a short. For an initial take profit, it's usually best to pick a level that looks potentially supportive that is far enough in profit to equal or exceed your risk by a bit. I chose 1070-1075 as my intial 1/2 TP because I was risking about 50 points, and that's just over 50 points in profit and right around the 61.8% retracement and June 9th high support. If you were risking less on the trade, consider taking profits a bit sooner. Right now S&P futures are trading at 1093 which is 32-37 points in profit. For more on the medium term outlook on stocks and how I plan to trade it, see yesterday's extended signal linked to above.

    In news Tuesday, we saw CAD Core CPI come out as expected, but US Exisiting Home Sales came out quite low. As anticipated, it was not a good spike opportunity. I did expect bad numbers to force a bit of a downtrend on stocks and USD/JPY for 1-2 hours, and while this did happen, it took several hours to really get moving. Fortunately though, stocks and UJ did not reverse upwards, so if you took a short, you probably either patiently made some good money, or at least got out around break even. In news Wednesday:

    0430 BoE Meeting Minutes - There's really not much anticipation over any vote count or APF changes, but any commentary on budget issues, defecit problems, etc could drive a sharp corresponding move into GBP/USD, so keep an eye on the headlines and look out for some volatility here just in case.

    0830 CAD Retail Sales Headline (-0.4% expected) - This report was a bit of a dud in the short term price action last month, but led to a very strong 150 pip + move in the hours following it. With a strong surprise here, it's hard to say exactly how it should move, but we should see either about 40 pips short term, or muffled price action that gives way to a big move like last month.
    If it comes out at 0.2% or higher, USD/CAD should sell off 40 pips.
    If it comes out at -1.0% or lower, USD/CAD should rally 40 pips.

    1415 US FOMC Interest Rate Statement (no changes expected) - The odds are low that the FOMC will make any dramatic shifts with their statement today, as maintaining the status quo seems to be their credo as of late. There are two possible outcomes though that could lead to nice price action:

    --They drop the "extended period" statement in reference to keeping rates extremely low. If they do this, it would be VERY USD strengthening as markets adjust to a sooner rate hike than currently expected. EUR/USD would likely see 80-100+ pips lower if this happens.

    --They come out with a very dovish tone and express strong worries about a double dip recession. If this is the case, the better trade would probably be a USD/JPY short looking for a 40-50 pip move. Also a scalp short on stocks wouldn't be a bad play either.

    1845 NZ GDP q/q (0.6% expected) - Pretty simple 40 pip trade opportunity here.
    If it comes out at 0.8% or higher, NZD/USD should rally 40 pips
    If it comes out at 0.4% or lower, NZD/USD should fall 40 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 sirpipsalot@profitmongers.com

    To our success!
    Sir Pipsalot
    #1 Sir Pipsalot, Jun 22, 2010
    Last edited: Jun 22, 2010

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