Profit Mongers @ 12:39 AM, Monday November 15 2010
Hey folks,
Ah, back after a nice break from the action. It looks like the EUR/USD played out post-FOMC like I had suspected all along... it turned into a selloff. The initial rally afterwards was indeed shortlived, and the EUR/USD looks poised for a more substantial selloff even after the 500-600 pips we've seen so far. I'm not in short yet though, as I am waiting/hoping for a bit more of a bounce up from here (currently 1.3675). My plan is to get short somewhere between 1.3760 and 1.3900 to position for a selloff down to the 1.3300's initially, 1.2800 eventually, with a small possibility of a complete reversal to new 2010 lows below 1.1890. I think there's enough chance of a further bounce today (Monday) to warrant waiting for a rally to get short. If that doesn't develop and we resume and sustain selling off below 1.3600 today, I'll take a fresh look at all options in Tuesday's signal.
In news, there's one item worth our attention:
0830 US Retail Sales Ex Autos (0.4% expected) - Unfortunately, it's been quite some time since we've seen a surprise here, with the last 2 tradable deviations coming in March and June. Since then, the character of US news moves has started to shift with the USD/JPY no longer as responsive on news as it used to be.
Spike Strategy - I'd trade a 0.5 trigger looking for 40 pips on either USD/CHF or EUR/USD. We'll possibly see a larger, more momentous spike on a 1.0 trigger. The ES contract (S&P 500 futures) should see a 5+ point spike with a good chance for follow-through for a 10 point move within 5-10 minutes.
Retracement Strategy - Retail Sales tends to offer pretty frequent retracements, so I'd look to get in if a trigger is hit after about a 50% retracement.
If it comes out at 0.9% or higher, USD/CHF should rally 40 pips (EUR/USD down 40). ESZ10 should rally 5-10 points.
If it comes out at -0.1% or lower, USD/CHF should drop 40 pips (EUR/USD up 40). ESZ10 should drop 5-10 points.
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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