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Sir Pipsalot's Wednesday Market Update 06-30-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Jun 30, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    Hey folks,

    It looks like some very palpable risk aversion is creeping into markets and threatening to reassert the long term down trend in many markets. Technically though, the picture hasn't really confirmed further downside is emminent. Despite the seemingly widespread gloom, EUR/USD touched the upper edge of my 1.2100-1.2150 support zone and bounce handily now at 1.2215. There is some serious event risk getting a lot of attention tomorrow (feel free to read more here):
    Health of Banks May Be Laid Bare as They Start Repaying ECB 12-Month Loans - Bloomberg

    However, the lack of dramatic EUR/USD downside seems to point towards a potential sell the rumor, buy the news situation where good to even moderately bad numbers may still see a short covering bounce, but very bad news there could push us down with a lot of momentum.

    Stocks took a major dive today right into the area around the major long term 1035 support. Chances are we'll see at least a dead cat bounce here for 5-10 points, (1039 as I type... I actually bought a bit after the close around 1035 looking for 7 points), but any significant break of the 1035 area will set up for the next phase of a long term downtrend targeting about 950 first, and 890 to follow. Ultimately this downtrend should it confirm is projected to fall as low as 400 on the S&P over the next 1-2 years.

    In news Tuesday, we saw US Consumer Confidence come in very low, which sparked a serious bout of risk aversion that lasted throughout the day, particularly in stocks. EUR/USD only sold off 30-35 pips since it ran into aforementioned 1.2150 support, but EUR/JPY was good for 70 pips down over 30 minutes. In news Wednesday,

    0515 EST - ECB should announce results of their 3 month loan facility around this time and the news here should fuel some volatility on the Euro and the broad market in general. Essentially, the ECB rates are higher than market rates, so only banks with a lot of trouble really should need the cash to pay back the ECB's 12 month facility which becomes due today.
    200-250 billion Euros or less would be somewhat reassuring and we should see a EUR/USD rally afterwards.
    300 billion Euros or more may incite further risk aversion and cause EUR/USD weakness

    0815 US ADP Employment (60K expected) - I'd look to trade this report pretty straight up on USD/JPY.
    If it comes out at 110K or higher, USD/JPY should rally 40 pips
    If it comes out at 10K or lower, USD/JPY should fall 40 pips

    2130 AU Retail Sales (0.3% expected) - It's been few months since we've seen a big enough surprise to trade here, but if we get one, it should still be good for a 40-50 pip move.
    If it comes out at 0.9% or higher, AUD/USD should rally 40-50 pips.
    If it comes out at -0.3% or lower, AUD/USD should fall 40-50 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
     
  2. NATAN SHAIN

    NATAN SHAIN Private

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    What About ?

    Hi
    What About Gbp Gdp At 4:30 ?
     
  3. PipStar

    PipStar Sergeant

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    It's been postponed until 12th July.
     
  4. koco

    koco Private, 1st Class

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    Cad Gdp

    Sir Pipsalot,

    why did you regret CAD GDP today? It made 31 pips and I regret that I didn't trade it. What was the reason not even mention it?
     
  5. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

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    I don't trade CAD GDP because it's very hit and miss. This month it didn't even have a strong enough deviation to trade, it just worked out mainly because USD was going up due to risk aversion from the US ADP report just 15 mintues earlier.
     
  6. koco

    koco Private, 1st Class

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    Ok, thank you for explanation sir Pipsalot. Yep, it does make sense.
     

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