Forex Trading Signals for 21-09-2009 --->3 days
There seems to be a notable pullback on Gold, and Silver possibly functioning as a leading indicator of USD strength, and if you guys remember, this 1.4700 area was the level I've eyeing for quite some time to be the potential top of this EUR/USD rally. Short term, I think we could get action in either direction here on Monday and Tuesday, but long term the big opportunity is short. I'm not quite ready to pull the trigger and shove in a huge trade short just yet because we may have a final push to new highs here in the next day or two.
As far as the GBP is concerned, let me remind you guys of the new stance from Wednesday's Forex Trading Signal 9-16-2009:
Quote:
Originally Posted by Sir Pipsalot
Last night we also had a very big tape bomb from the Bank of England's Governor King. In testimony he basically said they're considering cutting interest rates which was a big surprise to the market and has lead to considerable GBP weakness. I anticipate further gains in EUR/GBP of several hundred pips over the coming weeks and months as the GBP weakens. It also may be a good chance to get in early on the big USD turn by getting in short GBP/USD while we wait on EUR/USD. I think going long EUR/GBP (currently around 0.8910) and/or short GBP/USD (currently around 1.6460) make good sense for position trades, but I'm probably going to wait a bit on the GBP/USD short and wait until I enter EUR/USD sometime in the next week or so.
So far the long on EUR/GBP has been good for about 140 pips, and it's halfway to it's ultimate 0.9200 target. If you had gotten short on the GBP/USD (I did not) it's up 260 pips. My plan was to wait until we're ready to short EUR/USD to also short GBP/USD, and if we do get an ending rally on EUR/USD, that may float up GBP/USD enough to short it from a higher level than the current 1.6200. However, the reason I'm short term neutral on USD in general is that we may have topped out already and it's all downhill from here. With some key confirmations, I won't mind chasing it on the way down a bit.
On Silver and Gold, as I said we've had some notable pullbacks, and at this point, there's some key question marks. Is this a decent retracement before the final push higher, or is it the start of the downward reversal we've been waiting for? We'll have to wait at least another day to know for sure, but I'm holding the 2nd half of my long from $976 with a break even stop and a $1035 take profit.
On stocks, as with the other markets, we may have topped out, but it's a bit more likely there that we have another rally leg yet to go. Often times stocks will peak out a bit later than the correllating currencies, so I'm not in a rush to get back short on stocks unless we break down through 1035 on the S&P.
FOREX TRADING MISTAKES
Monday 21 September 2009
Thursday 17 September 2009
Forex and stock signals 17-09-2009 >5 days
the EUR/USD is in wave 3 up and will need to form a clear 5 waves before it tops out. As far as I can tell, wave 3 is either just starting to top out around this 1.4720 resistance, or it has a bit more to go before a period of wave 4 retracement/consolidation comes in and the following final wave 5 thrust higher. As we saw back in December, it's quite possible we will see a very strong spike up on the EUR/USD to cap off the end of the move, so instead of focusing on a specific level to get short the EUR/USD, I recommend waiting for an ending pattern to emerge and time the short when a clear potential top is in place. In the meantime, shorter term longs on the EUR/USD could still see some upside, but they're getting riskier and riskier. If we get a decent dip today (as long as 1.4560 holds), that would be a risky but good buying opportunity to make some pips, especially if the final wave 5 is a sharp blowoff rally like it was in December.
Keep in mind though guys that the big money will be on the short side at some point soon. On the EUR/USD it looks like we are topping off Primary wave 2, intermediate C, minor 5, minute wave 5, and we're now working in the shaky waters of the minuette degree 3-4-5 finish to top off all of those degrees and enter a primary wave turn which mathematically should see the EUR/USD sell off harder than it did from mid 2008 to early 2009 which means something below 1.1300 on the Euro if it tops out around 1.4800.
The EUR/GBP long idea I mentioned yesterday is up slightly and likely consolidating a bit before making another sharp rise. I recommend getting long or holding long on EUR/GBP looking for 0.9200. A stop loss somewhere between 0.8800 and 0.8850 seems appropriate for the trade. As far as shorting GBP/USD is concerned, you could try to get in early here, but I'd rather wait until the USD as a whole bottoms out and ride the double momentum of GBP weakness and USD strength. Of course I'll let you know when I jump in long USD.
Gold continues to push to new highs, now around $1019. As the Euro works to a top, Gold should push higher but top out around the same time the Euro does give or take a few days. Until then, I'm holding long but $1035 should be enough for me to get out with decent profits and get neutral to await the turn.
Stocks have continued their terminal climb and I have taken a bit more profits around the close today from my 1029 swing trade long on stocks. Now I'm only in 1/4 of that trade. It looks like the S&P 500 could have enough mometum to hit 1100. Right now the last of the bears and cautious institutional money that has sat out most of this rally is finally, frustratingly getting pressured into buying this market for fear of missing out. This is very typical of a bear market rally to fool the common investors into finally getting long at the top before the next plunge. Once the dumb money buying pressure wears off, we will likely form a significant top and start a 60-70% decline over the course of a year or so. Trying to time this top hasn't been perfect, but bear market rallies are typically hard to time the end of precisely.
In economic news Wednesday, unfortunately all the data we were watching came out too close to expected to get much market reaction. In news Thursday:
0430 UK Retail Sales m/m (0.1% expected) - Sometimes this indicator can spark a very large move on GBP/USD, and other times it's a bit more subdued. One common feature either way though is that the move in line with the number tends to max out around 40-50 minutes after the release (around 05:10 TO 05:20 EST). If the move in the first 1-2 minutes is muted and it only moves about 30 pips, then I would wait for a nice deep retracement to get in the direction of the surprise. If the move in the first 1-2 minutes is a very sharp 50 pips or more, then a steep retracement may not happen and you might want to consider getting in on a slight retracement or just chasing it down and following the momentum.
If it comes out at 0.6% or higher, the GBP/USD should rally 40-50+ pips.
If it comes otu at -0.4% or lower, the GBP/USD should fall 40-50+ pips.
0830 US Housing Starts (598K expected) - This number has not had a huge reaction in currencies lately, but it does help drive sentiment and pressure from a more gradual perspective. This number should help pressure EUR/USD, USD/JPY and EUR/JPY up slowly on a good number, and down slowly on a bad number. I think a good way to play this is to let the first 1-5 minutes of volatility die down so you can get in closer to prerelease, then swing trade one of those pairs in the direction of the number (if the trigger is hit) and hold it for 45-90 minutes. As stocks get ready to open around 0930, the housing numbers will likely lead to a premarket move, or a move shortly after the open which is inidicative of a shift in risk appetite and will be reflected in most or all of those currency pairs. Also, make sure the building permits number comes out in the same direction (expected at 583K).
If the number comes out at 648K or higher, EUR/JPY should gradually rally 50-100 pips.
If the number comes out at 548K or lower, EUR/JPY should gradually fall 50-100 pips.
Keep in mind though guys that the big money will be on the short side at some point soon. On the EUR/USD it looks like we are topping off Primary wave 2, intermediate C, minor 5, minute wave 5, and we're now working in the shaky waters of the minuette degree 3-4-5 finish to top off all of those degrees and enter a primary wave turn which mathematically should see the EUR/USD sell off harder than it did from mid 2008 to early 2009 which means something below 1.1300 on the Euro if it tops out around 1.4800.
The EUR/GBP long idea I mentioned yesterday is up slightly and likely consolidating a bit before making another sharp rise. I recommend getting long or holding long on EUR/GBP looking for 0.9200. A stop loss somewhere between 0.8800 and 0.8850 seems appropriate for the trade. As far as shorting GBP/USD is concerned, you could try to get in early here, but I'd rather wait until the USD as a whole bottoms out and ride the double momentum of GBP weakness and USD strength. Of course I'll let you know when I jump in long USD.
Gold continues to push to new highs, now around $1019. As the Euro works to a top, Gold should push higher but top out around the same time the Euro does give or take a few days. Until then, I'm holding long but $1035 should be enough for me to get out with decent profits and get neutral to await the turn.
Stocks have continued their terminal climb and I have taken a bit more profits around the close today from my 1029 swing trade long on stocks. Now I'm only in 1/4 of that trade. It looks like the S&P 500 could have enough mometum to hit 1100. Right now the last of the bears and cautious institutional money that has sat out most of this rally is finally, frustratingly getting pressured into buying this market for fear of missing out. This is very typical of a bear market rally to fool the common investors into finally getting long at the top before the next plunge. Once the dumb money buying pressure wears off, we will likely form a significant top and start a 60-70% decline over the course of a year or so. Trying to time this top hasn't been perfect, but bear market rallies are typically hard to time the end of precisely.
In economic news Wednesday, unfortunately all the data we were watching came out too close to expected to get much market reaction. In news Thursday:
0430 UK Retail Sales m/m (0.1% expected) - Sometimes this indicator can spark a very large move on GBP/USD, and other times it's a bit more subdued. One common feature either way though is that the move in line with the number tends to max out around 40-50 minutes after the release (around 05:10 TO 05:20 EST). If the move in the first 1-2 minutes is muted and it only moves about 30 pips, then I would wait for a nice deep retracement to get in the direction of the surprise. If the move in the first 1-2 minutes is a very sharp 50 pips or more, then a steep retracement may not happen and you might want to consider getting in on a slight retracement or just chasing it down and following the momentum.
If it comes out at 0.6% or higher, the GBP/USD should rally 40-50+ pips.
If it comes otu at -0.4% or lower, the GBP/USD should fall 40-50+ pips.
0830 US Housing Starts (598K expected) - This number has not had a huge reaction in currencies lately, but it does help drive sentiment and pressure from a more gradual perspective. This number should help pressure EUR/USD, USD/JPY and EUR/JPY up slowly on a good number, and down slowly on a bad number. I think a good way to play this is to let the first 1-5 minutes of volatility die down so you can get in closer to prerelease, then swing trade one of those pairs in the direction of the number (if the trigger is hit) and hold it for 45-90 minutes. As stocks get ready to open around 0930, the housing numbers will likely lead to a premarket move, or a move shortly after the open which is inidicative of a shift in risk appetite and will be reflected in most or all of those currency pairs. Also, make sure the building permits number comes out in the same direction (expected at 583K).
If the number comes out at 648K or higher, EUR/JPY should gradually rally 50-100 pips.
If the number comes out at 548K or lower, EUR/JPY should gradually fall 50-100 pips.
Wednesday 2 September 2009
FOREX TRADING SIGNALS 9-2-2009
yesterday I said "The EUR/USD remains somewhat on the edge here where much more strength will turn things short term bullish, but recent advances have been anemic enough to make it look more like topping action than a rally in the works. Usually things look tough before a turn though, so we'll continue to maintain our short bias and position trade short on EUR/USD as long as 1.4450 stays intact." Our patience and diligence has proven fruitful and now that stocks have confirmed a more major turn, that gives the EUR/USD and GBP/USD a lot more fuel to complete their turns into a downtrend that started back in early August when I called those trades here. Like stocks though, their short term declines may hit a bit of a speedbump and some consolidation or short term bounciness may occur. Similar to stocks, I like the idea of a swing trade sell at higher prices on the EUR/USD around 1.4300 with a 50-100 pip SL. The idea on EU and GU now is to get short on good bounces to get in line with the larger trend.
Silver and gold are still holding up decently well, but as stocks start rolling over further, and the USD picks up even more steam, the metals will see some extensive downside. The key levels from the weekly signal remain unchanged and both are great sells at their current levels.
In news Tuesday, we saw a lot of positive news just get slammed... from German Retail Sales, to US ISM and Pending Home Sales... good news could only manage a meager spike up and subsequently got hammered on a reversal down. Fortunately, given the low liquidity right now, I kind of saw this potential coming and recommended skipping these trades. The one I did want to trade, AU GDP actually did pretty decent all things considered and managed 44 pips up over 25 minutes after hitting our buy trigger. In news Wednesday:
0815 US ADP Employment Change (-250K expected) - This one is usually good for a modest move on USD/JPY, and if the surprise is very large, it could get a bit of a short term trend going.
If it comes out at -100K or higher, USD/JPY should rally 40-50 pips
If it comes out at -180K or higher, USD/JPY should rally 30 pips
If it comes out at -320K or lower, USD/JPY should fall 30 pips
If it comes otu at -400K or lower, USD/JPY should fall 40-50 pips
1400 US FOMC Minutes - Not much we can forecast here from an economic number standpoint, but obviously the market will be looking for insight into the FOMC's thinking and rationale in terms of when they're going to unwind their special programs, and why they slowed their rate of Treasury purchases. If there's some clear desire present to move forward (albeit slowly) with their exit strategy, and their slowing of Treasury purchases is a first step in that direction, it would be a USD positive.
**TIP**NEW INVESTMENT VEHICLE (.COM DOMAIN NAMES ) checkout the news at THE DOMAIN APPRAISERS>
Silver and gold are still holding up decently well, but as stocks start rolling over further, and the USD picks up even more steam, the metals will see some extensive downside. The key levels from the weekly signal remain unchanged and both are great sells at their current levels.
In news Tuesday, we saw a lot of positive news just get slammed... from German Retail Sales, to US ISM and Pending Home Sales... good news could only manage a meager spike up and subsequently got hammered on a reversal down. Fortunately, given the low liquidity right now, I kind of saw this potential coming and recommended skipping these trades. The one I did want to trade, AU GDP actually did pretty decent all things considered and managed 44 pips up over 25 minutes after hitting our buy trigger. In news Wednesday:
0815 US ADP Employment Change (-250K expected) - This one is usually good for a modest move on USD/JPY, and if the surprise is very large, it could get a bit of a short term trend going.
If it comes out at -100K or higher, USD/JPY should rally 40-50 pips
If it comes out at -180K or higher, USD/JPY should rally 30 pips
If it comes out at -320K or lower, USD/JPY should fall 30 pips
If it comes otu at -400K or lower, USD/JPY should fall 40-50 pips
1400 US FOMC Minutes - Not much we can forecast here from an economic number standpoint, but obviously the market will be looking for insight into the FOMC's thinking and rationale in terms of when they're going to unwind their special programs, and why they slowed their rate of Treasury purchases. If there's some clear desire present to move forward (albeit slowly) with their exit strategy, and their slowing of Treasury purchases is a first step in that direction, it would be a USD positive.
**TIP**NEW INVESTMENT VEHICLE (.COM DOMAIN NAMES ) checkout the news at THE DOMAIN APPRAISERS>
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