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$ For the Week of 11/13-With Trade Ideas

  • #21
  • Edited 10:13am Nov 13, 2006 9:19am | Edited 10:13am
Quoting faure
The old saying, buy the rumor sell the news (or fact), comes to mind.
Exactly-We've seen that many many times. That's one reason why I'm looking to possibly get long inthe GBP if it goes to the 8960-80 area...

If it turns out that the rumor doesn't get bought into...it'll be that much better a trade if the numbers are $-....

This article shows that the thinking really varies on how the retial sales number will look tomorrow:

http://www.bloomberg.com/apps/news?p...EeE&refer=home

As noted in the article-the market will likely be looking at the retail sales number with gasoline sales factored out. Since gas prices are down that sector should show a decrease. If you want to trade retail sales, you must be aware of how the number looks with gasoline sales factored out. No prediction on how the number is gonna look, but if you want to trade this report-that's the number to be looking for...
  • #22
  • Nov 13, 2006 10:16am Nov 13, 2006 10:16am
Quoting NewstraderFX
Exactly-We've seen that many many times. That's one reason why I'm looking to possibly get long inthe GBP if it goes to the 8960-80 area...

If it turns out that the rumor doesn't get bought into...it'll be that much better a trade if the numbers are $-....
Looking at it from a technical angle it seems to me that 9000 is going to be important - either a bounce or a big move lower. Today's it's already bounced off 9000 but is still hanging around there. I think the US PPI & Retail Sales might cause a lot more fireworks than what some might expect.
  • #23
  • Nov 13, 2006 5:05pm Nov 13, 2006 5:05pm
I was personally banking on the overbought theory. and UK PPI helped as well.

As I stated earlier, I noticed that when new highs are attained, it does not stay long so when it peaked at 9150 and reversed down, I shorted it @ 9085 but later it went up again to 9175.. I should have shorted at 9175 but I have to properly manage money so I did not.

I was "lucky"...



.
.
.

Later, we will be getting a UK data first.. It should be a good trade. And if both UK and US data are in line - we may see a strong trend one-way! Just a hunch: I bet a pip that the data will create a tag of war between GBP and USD...
  • #24
  • Edited 9:25am Nov 14, 2006 9:10am | Edited 9:25am
I Think This Put the Brakes on a Good Trade:


http://bloomberg.com/apps/news?pid=2...X2A&refer=home

Stripping out the gas sales from the core number showed that retail sales actually rose-which is not suprising as people spent the money they saved on gas on other things. As you can see there was a tremendous $+ move in the GBP after the initial spike up and IMHO-the market reacted to retail sales with the gas stripped out.

There may be some good clues here regarding the CPI:

http://bloomberg.com/apps/news?pid=2...RtQ&refer=home

http://bloomberg.com/apps/news?pid=2...FEc&refer=home

These articles will show you that prices have come down and demand has gone up. Both retailers made more profits as sales rose even though prices lowered.

You may want to think about market positioning here. These reports are telling us that retailers are making more money as prices have gone down. Maybe the market will start positioning itself for some negative numbers on the CPI...
  • #25
  • Nov 14, 2006 9:15am Nov 14, 2006 9:15am
i think it is clear now that this week is for $$$
  • #26
  • Edited 10:36am Nov 15, 2006 10:15am | Edited 10:36am
It's Only As Good As the Last Fundamental:

What we've seen the $ do against the GBP today is likely a combination of the UK reports and some buying into rumors of FOMC minutes that will be somewhat hawkish.

The market could be right, but after the effect from the minutes fades-we'll see the market position itself for the all important CPI data tom. Many places are calling for some lower readings due to the PPI numbers-so if the minutes do turn out to be neutral or dovish-there's plenty of potential for the $ to go the other way.

A somewhat hawkish tone will be in keeping with what we have seen recently-no action but careful wording that if inflation remains above target-they'll act.

Poole Says Fed Policy Makers' Stance on Interest Rates Is `About Right' Federal Reserve Bank of St. Louis President William Poole said the central bank's interest-rate stance is ``about right,'' though higher borrowing costs will be needed should the Fed fail to bring inflation down.

Let's see how they turn out.
  • #27
  • Edited 11:57am Nov 15, 2006 11:43am | Edited 11:57am
The rumors of a hawkish report were definately confirmed by the price action today. That still doesn't mean the market is correct in it's assumption...just that they reacted to their believe.

As with all fundamentals, the effect is likely to be short lived-or the effect tends to live only as long as pricing action begins towards the next fundamental. If the tone is hawkish and the market starts buying into the core CPI consensus (which keeps inflation above the Fed's target) the $ will definately strengthen further.

The core PPI was way down:

<TABLE class=tborder style="MARGIN-TOP: 12px" cellSpacing=0 cellPadding=3 width="100%" align=center border=0><THEAD><TR><TD class=alt1 noWrap></TD><TD class=alt1>8:30am </TD><TD class=alt1 align=middle>USD</TD><TD class=alt1>Core PPI m/m</TD><TD class=alt1 align=middle>http://www.forexfactory.com/forexfor...isc/mi_med.gif</TD><TD class=alt1 align=middle>-0.9%</TD><TD class=alt1 align=middle>0.2%</TD><TD class=alt1 align=middle>0.6%</TD></TR></THEAD><TBODY></TBODY></TABLE>


Could we see the same thing in the core CPI? Is it possible the market may start to buy into this possibility of a similar number in the core CPI? Sure. The best clue will be given during the London trading session tom. The market was definately caught by suprise by the core PPI reading and although there isn't anything published that I can find indicating the market see's the core CPI lower then .1, the possibility is still there.

We've seen the $ weaken to 9170 recently against the GBP, so there is alot of potential there. Wouldn't you love to be in the mind of some f these bankers and hedge funds now...
  • #28
  • Nov 15, 2006 1:06pm Nov 15, 2006 1:06pm
The hawkish minutes that were just released were fully priced in after today's earlier rally. Sell the news and say goodbye to the dollar for now.
  • #29
  • Nov 15, 2006 2:37pm Nov 15, 2006 2:37pm
Quoting faure
The hawkish minutes that were just released were fully priced in after today's earlier rally. Sell the news and say goodbye to the dollar for now.
Agreed, they were bought into-they also said recent data have allayed some inflation fears and they are still data dependent...obviously tomorrow's core CPI will be important...I'll be very curious to see how the market prices it...tomorrow's London session should be really interesting...

Unless the market starts to price in a lower reading on the core CPI...I wouldn't sell the $ just yet. I want to see what the mood in London is...from a trading perspective the best thing is for the $ to stay where it is, then get a nice $- core number...
  • #30
  • Nov 15, 2006 11:12pm Nov 15, 2006 11:12pm
Quoting NewstraderFX
Agreed, they were bought into-they also said recent data have allayed some inflation fears and they are still data dependent...obviously tomorrow's core CPI will be important...I'll be very curious to see how the market prices it...tomorrow's London session should be really interesting...

Unless the market starts to price in a lower reading on the core CPI...I wouldn't sell the $ just yet. I want to see what the mood in London is...from a trading perspective the best thing is for the $ to stay where it is, then get a nice $- core number...
Agreed, today's session will be super important as far as positioning before, and very volatile after, the release. I'm inclined to think any dollar firming before the release could leave it somewhat vunerable.

Just looking around, current opinion is decidedly much more focused on dollar strength as opposed to last friday when the popular " the dollar is doomed" sentiment rose its head. Funny how quiet the "prophets of dollar doom" have been this week.

My only position right now is short usd/cad at just above 1400 since yesterday. A few minutes after I went short, 4Cast issued a report saying that they had just gone long, because 1400 was now breached and that 1458 was the next stop. That made me feel better, so I doubled up. I'm holding into the CPI.
  • #31
  • Edited 6:51am Nov 16, 2006 6:39am | Edited 6:51am
US core CPI Speculation Trumps UK Retail Sales:

The UK number (largest gain in retail sales seen in a year:http://www.bloomberg.com/apps/news?p...0NY&refer=home) pushed the pound up around 40 pips, but the London traders showed no interest in further $ weakening from that point as the $ returned to it's recent equalibrium around the 1880 level, where it has held ever since. The above story is really interesting, in that it says traders are still betting on a UK rate increase. The growth estimates in the economy mentioned in the article are falling excatly into the range predicted by the NIESR (which expects to see rates at 5.25% early next year)

What's also interesting is that lowered energy costs are factoring into UK retail sales, according to the analysis, whereas the last US retail report showed little evidence this is happening yet.

The trading today should tell everyone is that no one (at least in London over today's session) has any thought of a below consensus core CPI reading. The BoE statement yesterday is also likely weighing into this:

http://www.bloomberg.com/apps/news?p...d=afAQbaIPB6Z0

There is also a headline on BB that says notes may fall on speculation report will show that inflation is slowing...I'm assuming it's referring to the CPI report.

At this point-an excellent trade could be in the cards if the core CPI does show this...I'm not saying this will happen and certainly traders aren't expecting it...but should it pan out that way-the $ could really slide...
  • #32
  • Nov 16, 2006 6:53am Nov 16, 2006 6:53am
Quoting NewstraderFX

...but should it pan out that way-the $ could really slide...
Thanks NewstraderFX for your insights. I learn so much in your "world economy classes" More so than I did in Business School...

....by a $ slide you mean the EUR, Pound would go up? EUR is heading lower this morning and hanging under the 1.2820 - 1.2830 area. It can't go higher than this resistance. Should your scenario come into play, do you think it will break? I'm not looking for specific advise on how to trade this, but I was thinking about your "$ slide comment" what it meant.

Thx in advance.

Peter.
  • #33
  • Nov 16, 2006 7:36am Nov 16, 2006 7:36am
Quoting NewstraderFX
US core CPI Speculation Trumps UK Retail Sales:


At this point-an excellent trade could be in the cards if the core CPI does show this...I'm not saying this will happen and certainly traders aren't expecting it...but should it pan out that way-the $ could really slide...
Nice analysis NewstraderFX keep it up!!!
  • #34
  • Edited 10:10am Nov 16, 2006 9:29am | Edited 10:10am
Quoting Trader Valsky
Nice analysis NewstraderFX keep it up!!!
Thanks for the sarcasm Val...lol

Obviously the trade was lousy-but if u traded smart u stayed out if it...When I said it could be a good trade...that means to be alert for one-it doesn't mean jump in like newb at the first sign...

Let's get back to why it may not have been good time not to trade-

The major CB's are kind of pointing in the same direction-no immediate rate increase and inflation showing signs of slowing...since they're all pulling in the same direction...why would one rise against the other? Kind of makes sense if you think about it...Perhaps a good lesson learned for all of us...

You can think about this as well: After the UK sales report what happened? London took the GBP down after the initial spike up. Same thing kind of happened after the CPI number...

Val-if u jumped in like a newb...too bad man...remember that "could be a good trade" means exactly that-if it turns out not to be a good trade-try to figure out why and go from there...
  • #35
  • Edited 11:12am Nov 16, 2006 10:13am | Edited 11:12am
Just a thought-we saw the pound taken down twice after initial spikes today once after the UK retail sales and then again from the CPI...lets see what happens after the Philly Fed...

There you go-the GBP got to 20 and I shorted it for around 17 pips...
  • #36
  • Edited 2:03pm Nov 16, 2006 12:43pm | Edited 2:03pm
Here's some more interesting info on US-China relations:

The commission also urged Congress to press complaints against China at the World Trade Organization for what it called Beijing’s intervention in international currency markets and failure to enforce intellectual property rights.

American manufacturers have long complained that Beijing’s artificially low currency makes Chinese goods cheaper in the U.S. and American products more expensive in China. Critics say a Chinese flood of pirated movies, computer programs and other copyrighted material has cost thousands of American jobs and hindered the U.S. economy’s ability to compete.

The commision referred to is the U.S.-China Economic and Security Review Commission. Search for their site and review some of the reports. Makes for fascinating reading, if ur into it...

Check out if Bush does make some statements at the WTO...might be cause for some movement in the $...it's likely that we will hear much more about this and remember the overall goal is to either appreciate the yuan or depreciate the $ against it...

Here's another BB blurb-to me it's further evidence that the Fed policy is to hold rates steady as long as possible while continuing to talk tough on inflation:

http://www.bloomberg.com/apps/news?p...6c&refer=bonds

Finally, listen to a Fed gov speak on inflation-where it has been, where it's going and why: Globalization, Deregulation and Financial Innovation

javascript:bringupPlayer('vid=vMtVX.FfI8As') (you'll need to paste that into the search window on BB)
  • #37
  • Nov 16, 2006 6:39pm Nov 16, 2006 6:39pm
Have any of you notice that GBPUSD was 1.9175 last week and it took only 3 days to bring it down to 1.8840s

EURUSD is relatively flat for the week pivoting around 1.2800...

US even had a series of "bad" US Retail Sales, and CPI yet USD reached this point.

This points to me that GBP had a worst week than USD and USD is strong this week.

But of course this is coming in late...
  • #38
  • Nov 16, 2006 7:01pm Nov 16, 2006 7:01pm
Quoting NewstraderFX
Thanks for the sarcasm Val...lol


Val-if u jumped in like a newb...too bad man...remember that "could be a good trade" means exactly that-if it turns out not to be a good trade-try to figure out why and go from there...
Its no joke NewstraderFX I really appreciate your idea in fact you are very right about your 4cast regarding the CPI core and $ slide when the number came out I managed to bank 20pips coz I'm a scalper without your idea plus the confirmation of one of r co-traders here Moe I wouldnt end up profitably once again keep it up coz I admire your work buddy, happy trading to you!
:-)
  • #39
  • Nov 16, 2006 9:31pm Nov 16, 2006 9:31pm
Oh, well my bad then Val-I was actually hoping for a 0 or negative reading to push the $ down, down like way to the ground...I was tryin to trade this-I was waiting all week for it and it was a no-trade for me...that .1 should have been worth more then 20 pips...

Glad u made a few pips off it though...I would imagine it was the kind of trading enviorment were a broker would fill u at the top of the slide, where u stop and u turn and you go for a ride, then u get to the bottom and you see it againnnnn.....yeah yeah yeah...do u don't u want me to make u....comin down fast but don't let me break u...tell me tell me tell me the answer well u may be a broker but u ain't no dancer....look out HELTER SKELTER....

u know-that kind of trade...

whew it's been a bad week of no good trades...thanks Paul, u used to be cool...at least u were at one time that's better then never at all...

It was the friggin chinese they started buying $'s with both chopsticks they don't want a weak $ can u dig it...ah f **k it i'm still buyin them cheap chinese counterfit batteries.....
  • #40
  • Nov 17, 2006 1:28am Nov 17, 2006 1:28am
Well it s difficult to know where the market will go of course, but according to the yesterday news... the gbpusd moved crazy and we had turnovers on our brokers chart of about 100 pips... must have caught some stop losses and stuff...
anyway gbpusd will go up from now start buying ladies and gentlemen, pound yen too and gbpchf too

explanations: BOE says what it thinks now, and tells the truth about what it thinks, but actually, England will have more inflation then they expect because of new petrol rising prices, and everyone knows that pertrol prices will rise... so anyway this is the main reason.

" you don`t have to speak in a complicated way to be right..."

Have an exciting friday trading
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