Profit Mongers @ 11:53 PM, Monday August 02 2010
Hey folks,
My bias towards a breakout higher and continued strength from the EUR/USD and GBP/USD expressed yesterday really paid off with a very strong push higher on both pairs. For now though, the EUR/USD may see one more small push higher, likely to around 1.3250 resistance before potentially topping and setting up for a very strong downmove. In the meantime it is consolidating about in a pretty tight range, so I would look to buy the bottom of that range here in the 1.3160's with a 20-50 pip TP and look for 20-90 pips on the TP depending on how long you want to hold the trade.
Stocks pushed higher and hit both of my TP's on my long from 1100 at 1115 and 1125. Now it's time to either start positioning short a bit early which is risky but will yield large rewards if I am correct and we top out soon near 1130. Alternatively, we can wait until we get some downside confirmation and get into a trade with much higher odds and certainty, but less enticing risk/reward ratios.
Typically when I see two similarly valid approaches to a trade, I like to combine them and do a little of both. I plan to enter up to 4 units short on stocks. So far I've entered short 2 units here on the S&P 500 in the 1120-1130 range (now 1119.75 on futures). One unit has a 20 point stop (risky/speculative), and another has a 50 point stop (more reasonable for a swing/position trade). TP's planned are 1085-1095 on the tight SL short, and 1055-1065 on the wider SL short. If a top develops with reasonable confirmation of a turn lower, I will enter the final 2 units short whether the first two stopped out or made profit.
In news Monday, we saw both AU Retail Sales and Interest Rates come out pretty much as expected in a fairly unexciting manner. There's no news due out Tuesday that is particularly noteworthy, but there are a cluster of smaller US reports during the NY session that could get USD/JPY moving if there's a surprising development there. Wednesday will see 3 news trades worth watching, so I'll have those previewed in tomorrow's signal. Until then, take care.
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
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Sir Pipsalot
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