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Trading Sep, 18th Fed's rate statement

  • #1
  • First Post: Sep 17, 2007 12:32pm Sep 17, 2007 12:32pm
A thread to discuss best scenarios under any possible result from Sept 18 Fed's rate statement.

There are 3 scenarios. My plan is to check first 15 min action while getting familiar with the statement on the newswires.

1. Stock market rally on rate cut (0.5%?) + statement
Best trades long EURUSD, EURJPY, USDJPY
AUD and NZD pairs, too?
GBPUSD not advised due to last developments in UK?

2. Stock market selloff on rate cut (0.25% / no-cut) + statement
Best trades short EURJPY, USDJPY
GBPUSD is a possibility, since cable is weak already. I don't think there will be buyers around in this scenario.... But cable may be sold out already (last 1.9950)

3. Stock market bumping on rate cut (0.25%??) + confusing statement
In this case I think the best trade is staying out (for the week?)

Due to last developments in UK, I'm really afraid of trading cable whathever the outcome...

I'm not closed on those pairs and I still haven't decided which to trade in each scenario. Everybody's view is welcome

Cīmon, bring up your views here... 24 hours to go...
  • #2
  • Sep 17, 2007 12:42pm Sep 17, 2007 12:42pm
Another question remains, unsolved on my side: whether or not a, say, 0.5% cut + strong statement can provide sustained rally in the stock market, thus providing a major dollar dumping.
  • #3
  • Sep 17, 2007 1:42pm Sep 17, 2007 1:42pm
Nice thread to chew on for the next 24 hours....

While I am not up to par on my Fundies and possible outcomes....I will stay mute.

As for trading this MONSTER....as for myself, I will be FLAT & in cash.
(except for my minor eur/gbp experiment- which has hit a "ROCK"!!)

My advice, for the 30,000+ members here at FF, that have limited/no experience trading....
STAY OUT!!

I do not see this being close to a Tech opportunity.....I think some very complicated Fundamentals will rule this day, after 2:15edt.

Fxj
Proper Prior Planning Prevents Piss Poor Performance
  • #4
  • Sep 17, 2007 2:06pm Sep 17, 2007 2:06pm
Yeah, we will have to grab this market by the tail tomorrow...

Today oil and gold are clearly pricing in a rate cut, while the stock market is trading negative-to-flat after some serious losses. 10yr spiked in the morning. Put them all together and we have conflicting dollar bias, as it can be seen in the non-trading day in euro, yen and swiss...

Hope tomorrow they all align in some direction, otherwise we're having super volatile bumpy rides. Which for me equals to LOSS.
  • #5
  • Sep 17, 2007 2:07pm Sep 17, 2007 2:07pm
Quoting cesarnc
Another question remains, unsolved on my side: whether or not a, say, 0.5% cut + strong statement can provide sustained rally in the stock market, thus providing a major dollar dumping.
But why do you think a stock rally = dollar dump. It's usually the opposite (which is why we follow DJ and S&P closely). I think that may PREVENT a dollar selloff in the long terms, people have to convert to USD to buy these skyrocketing stocks.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #6
  • Sep 17, 2007 2:17pm Sep 17, 2007 2:17pm
Quoting Plutonite
But why do you think a stock rally = dollar dump. It's usually the opposite (which is why we follow DJ and S&P closely). I think that may PREVENT a dollar selloff in the long terms, people have to convert to USD to buy these skyrocketing stocks.
If risk apetite kicks in, bye bye dollar...

But as I said in my last post, I'm afraid we could have mixed sentiment hitting the market. Like stocks going one way and treasurys the other. This is the worst case scenario to trade dollar pairs... Well, it has been lately. Some major bounces in euro, swiss, cable and yen when this happens...

The best trade I had under this circustance was SL being triggered at B/E
  • #7
  • Sep 17, 2007 3:10pm Sep 17, 2007 3:10pm
All I know is that I got a system and a plan. Don't care what the heck happens tomorrow.

The moment I start giving a crap, I lose money... LOL.
Mr. Trend
  • #8
  • Sep 17, 2007 3:40pm Sep 17, 2007 3:40pm
Quoting Mr Trend
All I know is that I got a system and a plan. Don't care what the heck happens tomorrow.

The moment I start giving a crap, I lose money... LOL.
Yes, it looks like nobody is giving a crap about that...

But at 2:30 pm tomorrow the "WHAT HAPPENED? WHAT HAPPENED?" posts start flowing through the entire forum

  • #9
  • Sep 17, 2007 3:41pm Sep 17, 2007 3:41pm
Quoting Mr Trend
All I know is that I got a system and a plan. Don't care what the heck happens tomorrow.

The moment I start giving a crap, I lose money... LOL.
One of the most beautiful statements this year. The charts will tell you what to do. Thanks Mr Trend!
  • #10
  • Sep 17, 2007 3:54pm Sep 17, 2007 3:54pm
Ok, let's try again...

The purpose of this thread is to discuss which pair could provide the best trades depending on the outcome from tomorrow Fed's rate statements.

Those who already know what to do are invited to share their view. Those, like me, trying to get ready for it are invited to share their doubts.

Those who do not give a crap about that are sound & safe now, so this thread will be useless.
  • #11
  • Sep 17, 2007 3:56pm Sep 17, 2007 3:56pm
Was discussing about cable in another thread and something poped up. There is the UK CPI tomorrow, forecast 1.9% which is below UK's CPI target (2%).

This adds to the no-cable cause in case dollar goes down tomorrow.

And also, cable is close to the lower trendline of its channel in the weekly, which might come into heavy pressure in case CPI comes as forecast or lower.
For the Fed's, I start thinking about Euro and Yen only.....
  • #12
  • Sep 17, 2007 4:07pm Sep 17, 2007 4:07pm
Quoting cesarnc
Was discussing about cable in another thread and something poped up. There is the UK CPI tomorrow, forecast 1.9% which is below UK's CPI target (2%).

This adds to the no-cable cause in case dollar goes down tomorrow.

And also, cable is close to the lower trendline of its channel in the weekly, which might come into heavy pressure in case CPI comes as forecast or lower.
For the Fed's, I start thinking about Euro and Yen only.....
On average, the daily GBPUSD range moves 40% more than the EURUSD. Why would you dismiss a pair that that acts just like the EUR but moves more?
  • #13
  • Sep 17, 2007 4:22pm Sep 17, 2007 4:22pm
Quoting philmcgrew
On average, the daily GBPUSD range moves 40% more than the EURUSD. Why would you dismiss a pair that that acts just like the EUR but moves more?
Because it moves more when it comes to go crazy, too.

I'm not willing to gamble this market. Going on cable requires larger SL, thus smaller position. I prefer going bigger on euro with reasonable SL.

Even during August selloff, euro reacted better, trading supports accordingly, even when it had to crack them. Gives you time to think and adapt better...

Cable saw no fib level, support, trendline or blown up indicators.
  • #14
  • Sep 17, 2007 4:23pm Sep 17, 2007 4:23pm
http://www.forexfactory.com/news.php?do=news&id=47408
  • #15
  • Sep 17, 2007 6:32pm Sep 17, 2007 6:32pm
Quoting NewstraderFX
http://www.forexfactory.com/news.php?do=news&id=47408
Priceless...

Thanks Newstrader

Is it this "3-months Libor" we have to keep eye on?
http://www.bloomberg.com/markets/rates/index.html
  • #16
  • Sep 17, 2007 8:28pm Sep 17, 2007 8:28pm
Great stuff.

Problem with euro$ is that it is already at an extreme high as it nears 1.4000. Because 1.4500 is an all time high.
There should not be very many big players buying euro at this level because any rally will be met with big long term shorts from 1.4000 and above.

And technically speaking we are nearing the end of a 9th wave cycle. All we need to see is one more rally to the 1.4000/1.4050 range where a weekly trend line is. And the entire 9 wave structure has bearish divergence on the indicators. Both monthly and weekly charts.
This is the time to look at highest time frames for direction, and stay away from any charts below daily. Daily suggest there could be a slight dip then bounce. That would be that head fake we are used to seeing on news.

Dave
  • #17
  • Sep 17, 2007 9:05pm Sep 17, 2007 9:05pm
Thankjs NewstraderFX, very well written article.
Thoughts on the TIC data? Sometimes that can be a real market mover; bad TIC data + a dovish fed could be good news for CAD and JPY, and bad for the USD, and perhaps the GBP (via fallout) as well...
  • #18
  • Sep 18, 2007 3:13am Sep 18, 2007 3:13am
I am so staying out of the market today. Is anyone up for a beer?
  • #19
  • Sep 18, 2007 3:23am Sep 18, 2007 3:23am
Quoting WTB
I am so staying out of the market today. Is anyone up for a beer?
No, but you can have some tea on me, since I am so *not* staying out of the market today. I am going to prove to myself once and for all that even the greatest of news should have no impact on what I'm doing. I will disregard Bernanke completely. Never heard of him, even. He does not exist. Long live the independent traders!

I'll let you know if I'm still alive after 3:00pm EST.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #20
  • Sep 18, 2007 3:50am Sep 18, 2007 3:50am
Iron Balls they call him!
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