Profit Mongers @ 12:17 AM, Friday June 04 2010
Hey folks,
EUR/USD topped out early in Europe at 1.2325, well below the 1.2360 SL for the EUR/USD short. If you got in on my short call either Wednesday, or Thursday, you should still be in profit now with price at 1.2182. In fact, with the lows at 1.2152 today, hopefully some of you hit some initial TP's. Final TP for me on this one is 1.1995 (just under 300 pips). Because there's only 70-100 pips risk on the trade, it's always prudent to take partial profits early at 100-150 pips profit and trail down the SL a bit.
Stocks held up today with a modest rally but didn't muster enough to hit our 1110-1120 sell yet. I still think the S&P futures look poised for a short term break up through 1105 (50% retrace and highs from today and last week), but it may not hold there long, hence the limit short. I will simply requote the trade call from last Friday's signal for emphasis:
[quote=Sir Pipsalot]I think the ideal place to short is in the 1110-1120 range (just about 10-20 points higher from current levels). Pick a SL appropriate for how much profit you're looking to make on the trade. If you're going to take all your profits ahead of this week's lows, I'd try a 20-30 point SL. If you're like me and you're going for 100's of points for most of the position short, use a solid 50 or even 70 point stop.[/quote]
In news Thursday, we saw US employment data come out pretty much as expected, so there was no surprise to trade off of. On Friday we have some big things to look forward to though:
0700 CAD Employment (15K expected) - This trade has a habit of making huge moves. Last month on a very big trigger it made a 110 pip spike... pretty insane. If you were patient and waited for a 50-60% retrace, it also reattempted lower later on for a solid 50 pip retracement trade, but it took awhile to get there. If the spike isn't overly huge, oftentimes the USD/CAD will adjust a bit more gradually over the course of 3-10 minutes as well.
If it comes out at 30K or higher, USD/CAD should sell off 50+ pips.
If it comes out at 0K or negative, USD/CAD should rally 50+ pips.
0830 US NonFarm Payrolls & Unemployment Rate (535.5K & 9.8% expected) - This one is going to be wild. No one has any clue what NFP will do this month. The estimates are all over the board from 220K to 750K... a range 3 times wider than normal. Because of this, we're very likely to see a strong deviation, but the move will only hold on if the unemployment rate agrees, otherwise it is very likely going to reverse and go the other way in the first minutes.
See last month as an example... 50 up on NFP in 30 seconds, then 100 down due to Unemp. Rate in next few minutes.
http://www.forexpeacearmy.com/forex_news_calendar/chartECEvent.php?id=11398
Or 3 months ago when they agree. Move held on and continued:
http://www.forexpeacearmy.com/forex_news_calendar/chartECEvent.php?id=10862&pair=USDJPY&tf=1
--If NFP comes out 600K or higher with Unemployment at 9.7% or lower, USD/JPY should gain 70 pips fairly quickly and probably push further to a 100 pip gain.
--If NFP comes out 600K or higher with Unemployment at 9.9% or higher, we'll likely see an initial upsurge of 30-60 pips on USD/JPY, followed by a reversal to or through the prerelease price, so sell near the top in the first minute or two.
Conversely,
--If NFP comes out 480K or lower with Unemployment at 9.9% or higher, USD/JPY should drop 70 pips fairly quickly and probably push further to a 100 pip slide.
--If NFP comes out 480K or lower with Unemployment at 9.7% or lower, we'll likely see an initial downsurge of 30-60 pips on USD/JPY, followed by a reversal to or through the prerelease price, so buy near the bottom in the first minute or two.
***Note - If the NFP surprise is HUGE (200K+), and the Unemployment Rate surprise is small, the reversal trade mentioned may be too dangerous.
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. Feel free to email me with any questions at sirpipsalot@profitmongers.com
To our success!
Sir Pipsalot
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