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Profit Mongers – Tuesday Trading Signal 09-07-2010

Sir Pipsalot — Tue, 07 Sep 2010 09:02:17 +0000

Hey folks,

The markets were fairly dead Monday due to the US Labor Day holiday, but the shorts on EUR/USD, GBP/USD and AUD/USD all worked to either hit TP’s or are at least clearly in the green right now with EUR/USD and GBP/USD down over 100 pips from yesterday’s signal and AUD/USD only somewhat lower but still poised to fall much more if/when support around 0.9135 gives way (now 0.9155). GBP’s weakness has been attributed to bond flows while EUR/USD in the last few hours is hitting major weakness now that a report from the WSJ indicates that European banks understated their soverign debt holdings substantially during their stress tests. If you’re still long EUR/GBP from last week, I’d close it early with this rough turn of the news (now 0.8323 for +120 to +170 pips).

I expect EUR/USD and GBP/USD to exhibit further bearish price action today, so stick with the shorts after taking some partial profits since we are near interim support levels. Unless AU news offers a hawkish surprise, AUD/USD should catch up with weakness as well.

In news Tuesday:

0030 AU Interest Rate Decision (no change at 4.50% unanimously expected) – There is very little chance they’ll make a move today, but if they do hike it would lead to a 100-200 pip rally. The price action should come from the statement itself. Right now the market is pricing in very little chance of a hike this year, so…

– If the RBA highlights recent improvements with a more hawkish tone, AUD/USD should rally 30-50 pips as markets adjust interest rate expectations to a stronger possibility of a hike before the end of the year.

– If the RBA continues to cite the sluggish global economy or risks of a deeper recession as their predominant concern, then the little hope that exists for higher rates will erode further and AUD/USD should trade lower albeit more gradually than for a hawkish surprise. I would expect a 40-70 point slide over the course of 4-7 hours.

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Sive Morten Weekly Outlook Now with GBP/USD and USD/JPY

Jakob — Mon, 06 Sep 2010 11:15:45 +0000

Sive Morten has been posting his weekly and daily outlook for some time now over at ForexPeaceArmy and a lot of people really appreciate his effort. Due to a lot of requests, Sive Morten has now decided to start posting weekly outlooks for two other major crosses, namely GBP/USD and USD/JPY, along with the EUR/USD. I have been following Sive Morten pretty much since the beginning and I really enjoy his weekly outlook; needless to say that I am pleased with the new additions. Read more about it here.

Profit Mongers – Monday Trading Signal 09-06-2010

Sir Pipsalot — Mon, 06 Sep 2010 08:44:36 +0000

Hey folks,

It looks like to me there’s potential in both directions for the Euro Monday, whereas the AUD/USD and GBP/USD are tilted a bit more bearishly. Honestly though, I like all 3 short with a modest 30-60 pip SL to start the week (EU – 1.2903, AU – 0.9171, and GU – 1.5482 as I type) not because they have a huge chance of selling off, but because IF they turn lower soon, it should mean 100’s of pips lower. So it’s not a high probability trade, but more of a risk reward trade that you want to look for 2-4 times your SL to take profits.

USD/JPY failed to hold onto a sharp but brief rally after NFP and has been pushed back down into consolidation. If you were short as I was and didn’t get stopped out on that post-news run Friday, I’d stay short, but if you did get stopped out (I did), I don’t like it enough for a new entry.

Stocks managed a nice rally fueled by the upbeat employment numbers out of the US and have held onto gains through the weekend so far. With a market holiday Monday, the futures are likely to slowly rally a bit higher to stop some people out, then turn lower into Tuesday. Because of this, I like the idea of a shorter term short anywhere above 1105 (now 1105.75) with a 10-20 point SL and 10-20 point TP. Medium to long term I’m short as well, but I’m a bit nervous about it, and the next 3-10 days should do a lot to either confirm the trade or signal it’s time to get out and look in the other direction.

In news Friday, we saw UK Services PMI come in quite low and push GBP/USD lower 30 pips right away and about 50 pips lower in total over 15-30 minutes which was a bit more than I thought it could nab (I took profits a bit early). We also got US Nonfarm Payrolls come out a bit high, but a positive revision helped push stock futures higher for a good trade, and USD/JPY higher by 50+ pips in short order. However, without the benefit of a strong deviation, and with no help from the Unemployment Rate (as expected), the USD/JPY sold off hard from resistance and gave back all of it’s gains within 45 minutes. There’s no news Monday worth watching, but Australia has their Interest Rate Statement due just after midnight EST on Tuesday, so I’ll have tomorrow’s signal out early to cover that.

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Profit Mongers – Friday Trading Signal 09-03-2010

Sir Pipsalot — Fri, 03 Sep 2010 09:59:34 +0000

Hey folks,

EUR/USD continues to work out it’s potential topping pattern, but a final thrust higher near 1.2900 is likely before a selloff, so I would consider shorting EUR/USD in the 1.2870-1.2910 range if it gets there Friday.

USD/JPY is still a good short around 84.30 or higher as it plays a range and sets up hopefully for a selloff to new lows. See Thursday’s signal for more on my USD/JPY trade.

EUR/GBP has entered an area of resistance here above 0.8300 that may top it out for a few days. If you haven’t already, I’d consider taking come partial profits. I still plan to hold out with my long through the volatility for a final run towards 0.8600 that should come after the pending retracement.

Stocks managed to push a bit higher today but should be setting up for a multi-day high at the least. I’d look for jobs data to create some stock market volatility today, but ultimately top us out and point us lower into early next week. If you shorted recently in the 1070-80 range as I did, things still look fine at this point, but depending on the nature of price movement over the next 2 days, I may want to close early for a smaller than expected gain to be safe.

In news Thursday, we saw Sweden hike interest rates as somewhat expected, but we still saw the 400 pips or so selloff we were looking for. I decided to hold EUR/SEK short based on some longer term breakout technicals as well and am looking for a selloff to 9.2300 – 9.2400 for now. Hopefully we’ll get there by Monday. In news Friday:

0428 UK Services PMI (52.9 expected) – This report is usually good for a solid 40 pip move and sometimes into a trend that will last the rest of the Euro session.
If it comes out at 53.7 or higher, GBP/USD should rally 40 pips over 2-10 minutes.
If it comes out at 52.1 or lower, GBP/USD should fall 40 pips over 2-10 minutes.

0830 US NonFarm Payrolls & Unemployment Rate (-105K expected and 9.6%) – EUR/USD is harder to predict on these reports, but USD/JPY seems to work like a champ just about every time. It’ll rarely be the biggest mover, but it has the most reliability.

–If NFP comes out at -170K or lower, USD/JPY should sell off about 50 pips in the first minute or two, then consolidate and eventually push further for 70-100 pips depending on the situation.

–If NFP comes out at -40K or higher, USD/JPY should rally about 50 pips in the first minute or two, then consolidate and eventually push higher for 70-100 total pips depending on the situation.

–If Unemployment Rate comes out at 9.8% or higher, this will help push a low NFP number into a bigger, faster drop, while holding back a high NFP number’s rally or even reversing it into 2-way action.

–If Unemployment Rate comes out at 9.4% or lower, this will help push a high NFP number into a bigger, faster rally, while holding back a low NFP number’s sell off or event reversing it into 2-way rangebound action

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Profit Mongers – Thursday Trading Signal 09-02-2010

Sir Pipsalot — Thu, 02 Sep 2010 08:12:01 +0000

Hey folks,

Risk appetite got a nice lift today, and while EUR/USD was able to benefit, USD/JPY remains contained around resistance. While I’ll probably be looking to sell EUR/USD sometime soon for a long term trade, I think USD/JPY is the better short here between 84.30 – 84.75 (now 84.36). I would short USD/JPY at market as long as it’s somewhere in that sell range, or set up a limit order to short it if it was already below 84.30 at the time. A SL around 85.00 sounds appropriate with an initial TP around 83.65-75, and a final TP near 82.30. As far as EUR/GBP is concerned, I’m sticking with it long to the final TP a bit ahead of 0.8600, but will let you know if I close it earlier or shift my TP down.

Stocks managed quite a sharp rally today right into my 1070-1080 sell range (high was 1082) on the S&P 500 futures fueled by a variety of factors. I still think we’ll be topping out near this region, (possibly around 1085 in the next 1-2 days), so for the more recent short from this area, I remain short with about a 30 point SL, with a partial TP around 1040-1045 (already hit once, but back in), and final TP around 1000-1010. I also remain short from 1020-1030 from a few weeks ago. It is possible that the stage could be setting for a new rally phase, but I don’t see it as a huge threat just yet, but I’ll keep a close eye on things in case sufficient evidence builds to close my shorts and get neutral or flip long.

In news Wednesday, US ADP came out too close to expectations for a trade, but US ISM Manufacturing came out incredibly high and led to a 6 point rally on S&P futures in the first minute, and 10 points within 13 minutes. USD/JPY even got into the action with a 40 pip move which it hasn’t done for ISM numbers in quite some time. In news Thursday:

0330 Swedish Interest Rates (3/4 economists expecting 0.25% hike to 0.75%) – If you can trade USD/SEK or EUR/SEK, this could be a good one. In their last Interest Rate Decision (2 months ago), the Swedish Riksbank did their initial rate hike, and now there’s a bit of controversy over whether they’ll hike again. Keep in mind though that SEK pairs trade with very different spreads and magnitudes than more common pairs, so familiarize yourself with them first.
–If they hike rates by 0.50% or higher, that’s clearly not expected and EUR/SEK should sell off by 1000 pips.
–If they hike rates by 0.25%, it’s somewhat expected, but EUR/SEK should still sell off by about 300-500 pips.
–If they keep rates unchanged at 0.50%, there should be a strong adjustment pushing EUR/SEK higher by 500-800 pips.

0745 ECB Interest Rate Decision (no change expected) – I don’t even plan on watching this as they never release a statement and have almost zero chance of changing rates at this time. Typically they’ll telegraph their moves well in advance.

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Profit Mongers – Wednesday Trading Signal 09-01-2010

Sir Pipsalot — Wed, 01 Sep 2010 06:37:19 +0000

Hey folks,

Just a short update today as I have had a long night and need some rest.

EUR/USD and USD/JPY are somewhat inderminate as 2-way pressures exist at the moment.

EUR/GBP long hit my first target of 0.8280 today and may cool off a bit before a final run to or near my final 0.8600 TP.

In news Tuesday, most news came out expected except AUD GDP which came out higher by 0.3% and led to a rally exactly as I described with 30 pips of upside initially and 54 pips eventually over 90 minutes. Read yesterday’s signal for more verification there. In news Wednesday:

0815 US ADP Employment Change (15K expected) – ADP typically responds well to a 50K+ deviation, but poorly to a smaller deviation. Estimates are also tilted towards the downside so I’m widening my downside trigger.
If it comes out at +65K or higher, USD/JPY should rally 40 pips or more.
If it comes out at -50K or lower, USD/JPY should fall 40 pips or more.

1000 US ISM Manufacturing (52.7 expected) – This report has performed poorly on USD/JPY, but with a 2.0+ deviation should perform well on US equities good for a 5-10 point move on the ES contract over 30 minutes.

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Profit Mongers – Friday Trading Signal 08-31-2010

Sir Pipsalot — Tue, 31 Aug 2010 05:09:59 +0000

Hey folks,

Just a short signal tonight as I do not have as much time as usual tonight. Check out my signals from Friday and Monday for more details on my biases.

EUR/USD may have topped at initial resistance just ahead of 1.2790, and I am bearish long term, but the retracement seems a bit shallow to me. I’d prefer to get more downside confirmation or wait for a deeper pullback before getting in short again.

EUR/GBP still looks good for a long as long as 4hr chart trendline support now around 0.8165 holds up. If that trendline fails, I’d look to get out or even flip short.

USD/JPY did not break key resistance cited yesterday and instead moved to the bottom of its hourly chart range. Since I’m already very short on stocks, I don’t want to get aggressive on the short side of USD/JPY, so I’d prefer to wait for more of a clear long signal (like a break of 85.92) to help hedge some of the volatility in risk appetite and risk aversion.

Stocks managed to peek into my 1070-1080 sell range, but only overnight Sunday on futures before selling off to now 1045. I’m lowering my buy range on S&P futures to 1000-1010 and maintaining my sell range at 1070-1080.

In news Monday, AU Retail Sales came out slightly high, but not enough to trigger a buy. In news Tuesday:

0830 CAD GDP m/m (0.2% expected) – I normally don’t trade CAD GDP, but with little other news out at 0830, it should perform well with a decent 0.2% deviation.
If it comes out at 0.4% or higher, USD/CAD should drop 40 pips over 3-20 minutes.
If it comes out at 0.0% or lower, USD/CAD should rally 40 pips over 3-20 minutes.

0945 US Chicago PMI (57.0 expected) – Stay away from this one as it gets released early to some people at 0942, and even then it only moves maybe 30 pips usually on a big surprise. If you can get the news early somehow at 0942, I’d prefer to trade it on US Equity futures.

1000 US Consumer Confidence (50.7 expected) – While this trade should work decently well on USD/JPY, like most 10:00AM EST US reports, it will likely work even better on US Equity futures like the ES or YM.
–If it comes out at 56 or higher, USD/JPY should rally 30-40 pips over 20 minutes, while US equities should rally 0.3 to 0.6% initially and about 1% over 20 minutes.
–If it comes out at 45 or lower, USD/JPY should fall 30-40 pips over 20 minutes, while US equities should fall 0.3 to 0.6% initially and about 1% over 20 minutes.

2130 AU GDP q/q (0.9% expected) – This report tends to hit about a 30 pip move initally, then consolidate for awhile, then has a very high likelihood of continuing in the direction of the initial move with slow but steady momentum to new extremes. You can try trading a 0.2% trigger instead of 0.3%, but you need to make sure the y/y (2.8% expected) also is 0.2% away as well.
–If it comes out at 1.2% or higher, AUD/USD should rally 30 pips initally and
closer to 50 pips over 30-90 minutes.
–If it comes out at 0.6% or lower, AUD/USD should fall 30 pips initially and closer to 50 pips over 30-90 minutes.

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Profit Mongers – Friday Trading Signal 08-27-2010

Sir Pipsalot — Fri, 27 Aug 2010 07:12:29 +0000

Hey folks,

EUR/USD’s status is a bit indeterminate for me right now. I see multiple possibilities and conflicting near term outlooks, so I’m choosing to refrain from any bold calls today. I still plan to get short on EUR/USD long term when it seems like a corrective rally is topping, and that may even be the case now, but the picture just doesn’t look particularly clear to me right now.

One reason the EUR/USD picture seems a bit muddy to me is the setup on the EUR/GBP. Right now EUR/GBP seems poised for a nice 40-90 pip breakout higher, potentially leading to more of a substantial rally over the course of days or weeks. Because of this, I’m going long here in the 0.8160 to 0.8210 range (now 0.8195) with a SL around 0.8120. I plan to take partial profits around 0.8280 and final TP around 0.8600.

Stocks are still working downwards, but will likely find a short term low here in the 1030’s. I plan to personally just hold short through any corrective pattern, but as clear shorter term buy and sell points emerge, I’ll let you know. For now, 1070-1080 is the ideal selling range on S&P 500 futures, and while a buy in the 1030-1040 range may work out, I don’t like the long side just yet.

In news Thursday, we saw US Jobless data come in a bit better than expected, but missing our triggers. Still, USD/JPY managed a 25 pip rally and S&P500 futures managed a 5 point rally that held on for about 5 minutes. Reassuring despite the missed trigger. In news Friday:

0430 UK GDP q/q Revised (1.1% expected) – Unfortunately, this 2nd release of UK GDP has an annoying habit of rarely surprising economists. Nevertheless, if it makes an exception today, we should see a good reaction on GBP. Make sure the y/y number (1.6% expected) deviates in the same direction as well to confirm the trade.
If it comes out at 1.3% or higher, GBP/USD should rally 40 pips.
If it comes out at 0.9% or lower, GBP/USD should fall 40 pips.

0830 US GDP Annualized 2nd revision (1.4% expected) – Unfortunately, a modest trigger usually isn’t enough to get things moving on the 2nd revision of GDP, so we’ll have to look for a slightly larger trigger to ensure a move, especially since traders may be more focused on the speech 90 minutes later.
If it comes out at 2.0% or higher, USD/JPY should rally 35 pips.
If it comes out at 0.8% or lower, USD/JPY should fall 35 pips.

1000 Bernanke Speech at Jackson Hole (market wondering if there will be some new announcement) – The street is buzzing with anticipation for this speech to deliver some sort of new program, with some thinking a new phase of Quanitative Easing could be announced. It’s far from expected, but most pundits are still publicly pondering “what-if?”

–If some new expansionary announcement is made, that would be a big buy for EUR/USD for at least 40-50 pips and perhaps more based on the scope of the program. Stocks should also mount a nice 1% rally or perhaps more over the course of 10-20 minutes.

–If the speech disappoints and nothing really new or shockingly dovish is said, the speculators will probably rush to cover their USD shorts and EUR/USD should have a nice short term selloff good for 40-50 pips.

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Profit Mongers – Thursday Trading Signal 08-26-2010

Sir Pipsalot — Thu, 26 Aug 2010 08:09:37 +0000

Hey folks,

It seems the EUR/USD is making an attempt to bottom at the initial resistance I had forecasted around 1.2610. I was hoping that support would give way to a bit deeper support level around 1.2420 (or somewhere in between), but that hasn’t happened just yet. If we can get a deeper extention lower, we should be able to play a long after the bottom is clearly in place. If we’ve bottomed a bit early already, I’ll probably stay out of the long side and start gameplanning for the next short trade. FYI, my short from 1.3070 with the Profit Mongers room closed at the final planned TP at 1.2620 and I’m now neutral waiting for the next opportunity and discussing it here.

Stocks are looking good for a more protracted decline, but they may be staging a short term bottom that could see a pretty decent retracement higher. Shorter term Elliott Wave projections indicate support roughly in the 1030-1040 range and that a bounce should take us towards 1080. With the brief tough of 1037 today on S&P futures, we may have tagged that low and have started pushing up. I don’t think it’s a good enough opportunity for a long (almost 20 point bounce already), but if it ends up having enough juice behind it to push back up to the 1070-1080 range, it would be a good short from there with a 30 point or so SL.

In news Wednesday, we saw German IFO some in somewhat high, but not high enough to hit our buy triggers. Consequently, the EUR/USD managed a decent ~40 pip rally, but failed to break above Tuesday’s highs and reversed into a selloff shortly thereafter. Also, very low Core Durable Goods caused a 28 pip drop in USD/JPY over about 20 minutes, and the New Home Sales number (which I didn’t preview because I thought it was a bad report to trade) did come in very low as well, but only caused a 15 pip downmove which fully reversed and went the other way in less than a minute. In news Thursday:

0830 US Initial and Continuing Jobless Claims (490K and 4495K expected) – This is not a report I’d typically recommend trading, but we’ve seen some decent moves lately when Initial Jobless Claims are a solid 20K+ away from expectations. Also look to the Continuing Claims number to make sure it’s also coming out in the same direction.

–If it comes out at 510K or higher, USD/JPY should sell off 20-35 pips and S&P 500 futures should head lower 2-3 points initially and retain a downward bias for the next 30-40 minutes, possibly culminating in a 10 point move.

–If it comes out at 470K or lower, USD/JPY should rally 20-35 pips and S&P 500 futures should move higher by 2-3 points initially and retain an upwards bias for the next 30-40 minutes, possibly culminating in a 10 point move.

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Profit Mongers – Monday Trading Signal 08-23-2010

Sir Pipsalot — Mon, 23 Aug 2010 09:44:44 +0000

Hey folks,

EUR/USD managed a nice break lower Friday putting our Euro shorts in some solid profit, and while we may see a bit of retracement and consolidation, the window is open for the final push down to the 1.2420-1.2610 support region that I’ve been calling for for over a week now. In the meantime, for those looking for new trades, I would reiterate the “sell-on-rallies” approach and sell any decent 80-100 pip rallies, specifically just ahead of 1.2770 here on Monday if we can bounce high enough. A short from around there with a 40-80 pip SL should make at least 150 pips profit before the support region starts to come into play.

On USD/JPY, unfortunately, the fundamental/sentimental support for a weak yen seems to have fizzled out here over the weekend as PM Kan and BOJ Gov Shirakawa finally did have their meeting, but it ended up being a mere phone call with no talk of forex intervention and no discussion of additional easing. My hope was that the build-up to this meeting would see plenty of JPY weakness, and perhaps something weakening would come out of the meeting, but with the risk aversion in markets late last week, the best JPY could do was merely hold its ground. As a result I’d prefer to exit USD/JPY long either here for a small loss (85.36 as I type), or after a bit of a bounce near break even (around 85.70)… my original SL was 89.65 so I think it’s better to save the 70-100 pips rather than hope for a bounce based solely on technicals.

Stocks saw a bit of downside Friday that ended up as mostly consolidation, and while we may see a bit of retracement higher, as with the Euro for new trades I’d be looking to sell into any decent bounces, especially around support-turned-resistance levels. off the hourly chart. A confirmed break and close below 1066 on the S&P 500 should bring follow-through selling down to at least 1000 and probably more like 950.

In news Friday, we saw CAD Core CPI come in just low enough to hit our buy trigger, and we saw about 25 pips higher in the first 2 minutes, followed by a series of retracements and rallies that range traded from around prerelease to the spike extremes for several hours afterwards. There’s no tradable economic numbers due out Monday, but the later on we will see a good number of smaller, but likely tradable and profitable reports littered throughout the week, and I’ll do my best to give you all a good angle on them.

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