Profit Mongers @ 8:11 AM, Monday November 28 2011
10:00 US New Home Sales (315k expected, 313k prior, 300k to 375k range)
Affliated Reports:
US New Home Sales % (+0.6% expected, +5.7% prior, -4.2% to +19.8% range)
Last month this one came back above the 300k line where it has oscillated above/below
since June 2010. This one has had lots of smaller deviations which have produced
good moves some times but other times has gone the other way. It is best to wait for
a good significant sized deviation. The last good deviation was back in March 2011
when it came out with a -40k deviation, the USDJPY slid about 20 pips over 40 minutes,
25 on the CADJPY and 20 pips on the EURJPY in a shorter amount of time. This one has
been low for a long time, the housing market has been weak since the economic crisis
started in 2007/2008. If this had been a positive deviation it is likely this move
would have been better, but as this has been weak for so long, negative deviation tend
to cause brief sell-offs that tend to turn around. This is because weak housing market
is old news, everyone knows this and it is already priced in. Some good housing news
would make people start to consider that a bottom is in place a further gains could
come, as unlikely as this is at this point. Anyhow as far as spike trading this, it
is advisable to use a wider sell trigger and a tighter buy trigger. Try to hold on
to a buy deviation for a big long. USDJPY is the safest forex pair to trade but
trying another Yen Cross as a proxy for the Risk On/Off trade would also work as would
trading a stock index or some Housing or Construction sector related ETF, and perhaps
copper as it is an important material for construction. This figure is more forward
looking than the other data on Housing.
If it comes out at 355k or higher, USD/JPY should rally 20-45 pips.
If it comes out at 265k or lower, USD/JPY should fall 20-45 pips.
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