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Sir Pipsalot's Wednesday Market Update 2-10-2010

Discussion in 'Commercial Trade Journals' started by Sir Pipsalot, Feb 10, 2010.

  1. Sir Pipsalot

    Sir Pipsalot Former FPA Special Consultant

    Dec 11, 2007
    Likes Received:
    Hey folks,

    We saw a bit more rebounding in most markets today with the EUR/USD falling just short of the 1.3850 level I mentioned yesterday. For the immediate downtrend to hold up, this area will need to hold... otherwise we're in for a potentially much longer retracement period that could take any number of forms. Given the still strong likelihood that we will continue lower and this has just been a more medium term bounce, I still advocate shorting rallies, but not if 1.3850-57 breaks decisively. At that point I'd shift to a more neutral stance. Right now there are some rumors of a Eurozone bailout of Greece to the tune of 20 billion Euros, and while that may be USD weakening, it could whipsaw into Euro weakness as well.

    Stocks managed to rebound a bit further as well, but still very likely have at least one more push to new lows ahead of them as discussed in Tuesday's signal. If I'm right and this has just been a shorter term countertrend pullback, we'll likely resume downtrends from here on both stocks and EUR/USD.

    In news Wednesday, there are 3 releases to focus on:

    0430 UK Industrial Production m/m (0.2% expected) - Watch out for leaky price action before the news (sometimes happens on this indicator). A 0.5% trigger is almost always good for about 20 quick pips, but is pretty unreliable looking for a whole lot more, so I'm going to recommend slightly wider triggers.
    If it comes out at 1.0% or higher, GBP/USD should rally 40 pips.
    If it comes out at -0.6% or lower, GBP/USD should fall 40 pips.

    0530 BoE Inflation Report - The market is expecting the BoE to both hike inflation estimates and make downgrades to growth estimates. Of particular interest though will be any hints on whether or not the BoE is likely to reinstitute QE programs to maintain it's inflation forecasts.
    If they imply they have no intention of restarting QE/APF, GBP should strengthen notably.
    If they imply they are strongly considering restarting their QE/APF, GBP should weaken notably.

    1930 AU Employment Change (EC) & Unemployment Rate (UR) (15K & 5.6% expected) - For awhile it seemed like the UR was more important, and now more recently the EC number seems to have more pull, but in all reality, both numbers have market driving potential, so make sure they agree or at least do not conflict.
    If EC comes out at 35K or higher or UR comes out at 5.4% or lower, AUD/USD should rally 50 pips.
    If EC comes out at -5K or lower or UR comes out at 5.8% or higher, AUD/USD should drop 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

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