CAD Retail Sales Play

CAD Retail Sales comes out on the Thursday. Here are the charts.

I want to make this play. Check out the previous months below. Tell me what you think. Should I play the initial spike only or let it ride until about 8:50am

The last three months, we've seen a good move with this piece of news.

That was due mainly to the fact that the actual results were very far from the consensus:

Jun: Est=0.4, Act=1.7, Difference=1.3 (very good CAD rally)
Jul: Est=0.1, Act=-0.6, Difference=0.5 (very good CAD rally)
Aug: Est=0.2, Act=-0.2, Difference=-0.4 (poor CAD rally followed by reversal)

From Jan to May, the moves are not so great and can result in losses.

From my analysis of data:
Difference of 0.45 or better will result in healthy no-whipsaw move in the 1st minute. The trend can linger for 5 minutes.
Difference of 0.4 results in a 1 minute move followed by reversal. Chance of reversal is inversely proportional to the difference. The smaller the difference, the bigger the chance.

This coming Sep 21, Expected Retail Sales = 0.5. It is convenient if the Official Number would come out lower than 0.0 or better than 1.0. Also watch out for USD's strength. IF USD is strong vs other currencies(EUR,GBP,CHF,JPY), expect USDCAD wont dip down farther than it could (review latest CAD CPI result).

I am personally not confident in this piece of news. The Threshold difference (aka Trigger) is too large. ie, it requires a large discrepancy between estimate and actual numbers to make a good trade. I'd recommend a small lot trade.

Thanx, very detailed. I going 2 go on your recomendtion. I'm only going to trade if the difference is an acceptably high/low number. nothing in between the range you stated. I'll let ya know how it turns out. Thanx for the analysis.

Drizzle,

BTW. I am not an expert analyst. I am merely reflecting much of what I gathered on several other boards/websites.

Not being modest, but being true about it.

I understand. What you said does make a lot of sense though. Those are some points that I over looked. I'm going with the trade because it makes sense to me. Because if it didn't, then I would be on the sidelines. I am not holding you responsible in any way, nor will I judge your trading skills based on this play I have decided to make. I follow ur postings on FF and you always have some meat to your analysis, regardless of the market direction, its still rational analysis every time.

Re the CAD retail sales, I have the Reuters mkt estimate at 0.6% m/m for core, which explains the s-t retrace.