Weekly Outlook Video Signal for 8-31 to 9-4

Sir Pipsalot

Former FPA Special Consultant
Hey folks,

Tonight's Video is here: 08-31-2009.swf

A big opportunity for a short is developing in stocks now (read below), and EUR/USD, GBP/USD, Gold and Silver should sell off as well in conjunction. Please watch the video for more on all of this. I recommend maintaining or entering position trades short on EUR/USD, Silver, and Gold while maintaining them on GBP/USD (entering now would require too wide a stop loss). EUR/USD should not exceed it's 1.4450 August highs, while Silver and Gold should not exceed they're $15.20 or $971 August highs. If any of the above start breaching those highs, we'll have to closely reconsider the position, which makes those regions good biasing areas for a stop loss. As far as profit targets are concerned, they're the same as when we entered these positions in early August... 1.3000 and lower on Euro, 1.5000 and lower on GBP, 700 and lower on Gold, and $8 and lower on Silver... but obviously those targets will take some time to develop and may be refined over time.

Stocks have finally done just barely enough to satisfy a topping out scenario and start to increase the odds that the big rally from the March lows is over and we have topped out, or will be topping out soon and heading to new lows (my estimate is 400 on the S&P 500). Right now, I think it's worth a modest swing trade short on stocks since the odds are the 1040ish high on the S&P will not be breached; however, until we manage to trade lower through 1016, we still could get more strength to new highs even if that outcome isn't currently the odds-on favorite. My suggestion is to dabble with a medium term short and pile on more of a position trade once 1016 support is violated on the S&P 500. We could get that break as early as Monday, but any time this week will be good enough to serve as more major confirmation of.

As far as news for Monday is concerned:

2100 Chinese Manufacturing PMI (53.3 last, no estimate) - This number has been steady in the low to mid 53's for awhile, so a pop out of that range may push risk appetite or risk aversion for a good swing trade as long as it doesn't disagree with the shorter term trend in place when the report comes out. I wouldn't expect a typical news spike, but overall pressure that should help with a swing trade.
If it comes out at 54 or higher, AUD/JPY should see buying pressure over several hours.
If it comes out at 52.9 or lower, AUD/JPY should see selling pressure over several hours.

0030 (Monday Night, Tuesday morning) - AU Interest Rate Decision (expected no change at 3.00%) - If there's a big surprise on the decision, there should be a big move, but more likely it will come out as expected and trade in line with whatever commentary the RBA offers up as a window into future decisions.
If it comes out at 3.25% or higher, AUD/USD should rally 80+ pips.
If it comes out at 2.75% or lower, AUD/USD should sell off 100+ pips.

For the rest of the week, I'm looking forward to trading:

Tuesday 9-1:
0030 Australian Interest Rate Statement
2100 Australian GDP q/q

Wednesday 9-2:
0815 US ADP Employment Change
1400 US FOMC Minutes

Thursday 9-3:
0430 UK Services PMI
0745 ECB Interest Rate Decision
0830 ECB's Trichet Speech

Friday 9-4:
0700 CAD Employment
0830 US Nonfarm Payrolls Employment Change

Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot
Last edited: