Boris and Kathy's FX Blog www.bktraderfx.com
10/31/2006
Today's Email Alerts:
Alert #2
Stopped out of AUD/NZD
The market didnt even give us a chance to wait for Australian data. Comments from NZ Finance Minister about the stubbornly strong Kiwi sent the currency lower and AUD/NZD higher, but only for minutes before it reversed - the spike lasted too short for us to react.
Indeed, the kiwi is stubbornly strong and it has little reason to be. The flush lower down to 1.1500 and the corresponding pop could have been related to pre-Sydney open flows. Seems like the big boys are playing against us. It happens. We'll be sidelined until we find a better opportunity.
Alert #1 Long AUD/NZD
We are very bullish on the Australian dollar given the recent slew of positive data including PPI, CPI, and leading indicators. The economy is doing very well and the RBA is on track to raise interest rates by another 25bp to 6.25 percent. Retail sales and trade balance are due for release tonight and we expect another solid print.
On the flip side, New Zealand's economy has not been performing so well. The RBNZ made it very obvious recently that they have no plans to raise interest rates. This makes AUD/NZD a very attractive buy. Technically we had a breakout of a massive ascending triangle and are buying a retracement of the move.
We are going long AUD/NZD here at 1.1558 with a stop at 1.1520. The first target is 1.1590, move stop to breakeven on the second half of the position when that level is reached. Second target is 1.1660.
Alert #2
Stopped out of AUD/NZD
The market didnt even give us a chance to wait for Australian data. Comments from NZ Finance Minister about the stubbornly strong Kiwi sent the currency lower and AUD/NZD higher, but only for minutes before it reversed - the spike lasted too short for us to react.
Indeed, the kiwi is stubbornly strong and it has little reason to be. The flush lower down to 1.1500 and the corresponding pop could have been related to pre-Sydney open flows. Seems like the big boys are playing against us. It happens. We'll be sidelined until we find a better opportunity.
Alert #1 Long AUD/NZD
We are very bullish on the Australian dollar given the recent slew of positive data including PPI, CPI, and leading indicators. The economy is doing very well and the RBA is on track to raise interest rates by another 25bp to 6.25 percent. Retail sales and trade balance are due for release tonight and we expect another solid print.
On the flip side, New Zealand's economy has not been performing so well. The RBNZ made it very obvious recently that they have no plans to raise interest rates. This makes AUD/NZD a very attractive buy. Technically we had a breakout of a massive ascending triangle and are buying a retracement of the move.
We are going long AUD/NZD here at 1.1558 with a stop at 1.1520. The first target is 1.1590, move stop to breakeven on the second half of the position when that level is reached. Second target is 1.1660.
10/30/2006
Today's Email Alerts:
Alert # 2 - Taking Profit on EUR/JPY
We like the way EUR/JPY has traded, but there is some decent support at current levels. Therefore we are going to bank the trade for a 40 pip profit (we are short from 149.65), closing out at 149.25.
Our website is back up. For all those who wanted to sign up or refer your friends - please begin sending them to http://www.bktraderfx.com/general/newsletter.php
Alert # 1 - Moving Stop to +10 on EUR/JPY
Since early Asia trade the EUR/JPY trade ( we are short one lot at 149.65 ) has moved into profit for us so we are going to move out stop to 149.55 (+10) while we continue to target 148.87.
Alert # 2 - Taking Profit on EUR/JPY
We like the way EUR/JPY has traded, but there is some decent support at current levels. Therefore we are going to bank the trade for a 40 pip profit (we are short from 149.65), closing out at 149.25.
Our website is back up. For all those who wanted to sign up or refer your friends - please begin sending them to http://www.bktraderfx.com/general/newsletter.php
Alert # 1 - Moving Stop to +10 on EUR/JPY
Since early Asia trade the EUR/JPY trade ( we are short one lot at 149.65 ) has moved into profit for us so we are going to move out stop to 149.55 (+10) while we continue to target 148.87.
10/27/2006
Today's Email Alerts
Alert # 2 Update
Over the past 48 hours our hosting provider experienced a major crash destroying our site. As you can imagine it has been a monumental struggle to get it reconstituted. On top of that our email service has been running delays so by the time we get the trade ideas out to you they have approached and sometimes even hit T1.
As we are still in beta stage we ask you to bear with us as we seek better technologies and avenues to get the information to you in a more timely manner. In the meantime as per EUR/JPY trade. Here is what we did for our own account. We took 1/2 the position and if we have continuation we will target T2 with 1/2 the position. We hope to have everything working by Monday but it may take a few days longer - so we ask for your patience as we work out the technical problems.
Alert #1 EUR/JPY - Time for the Turn
Although Japanese CPI came in soft today, most analysts from Japan believe that tonights' number was a one off affair and the underlying action in both price levels and wages is to the upside. Furthermore, Jaoan's “Mr. FX” vice finance minister for international affairs Hiroshi Watanabe noted that he did not expect further yen weakness given the economy's healthy fundamentals.
We believe that given the latest Japanese economic performance the case of higher short term rates is simply a matter of action delayed rather than action denied. Meanwhile euro is having some short term resistance at the 1.2700 level despite today's weak US GDP, so we think time is ripe for a turn in EUR/JPY. So we are going short EUR/JPY( Current price 149.85 ) Our Stop is 150.25 T1 is 149.63 T2 is 148.87
Alert # 2 Update
Over the past 48 hours our hosting provider experienced a major crash destroying our site. As you can imagine it has been a monumental struggle to get it reconstituted. On top of that our email service has been running delays so by the time we get the trade ideas out to you they have approached and sometimes even hit T1.
As we are still in beta stage we ask you to bear with us as we seek better technologies and avenues to get the information to you in a more timely manner. In the meantime as per EUR/JPY trade. Here is what we did for our own account. We took 1/2 the position and if we have continuation we will target T2 with 1/2 the position. We hope to have everything working by Monday but it may take a few days longer - so we ask for your patience as we work out the technical problems.
Alert #1 EUR/JPY - Time for the Turn
Although Japanese CPI came in soft today, most analysts from Japan believe that tonights' number was a one off affair and the underlying action in both price levels and wages is to the upside. Furthermore, Jaoan's “Mr. FX” vice finance minister for international affairs Hiroshi Watanabe noted that he did not expect further yen weakness given the economy's healthy fundamentals.
We believe that given the latest Japanese economic performance the case of higher short term rates is simply a matter of action delayed rather than action denied. Meanwhile euro is having some short term resistance at the 1.2700 level despite today's weak US GDP, so we think time is ripe for a turn in EUR/JPY. So we are going short EUR/JPY( Current price 149.85 ) Our Stop is 150.25 T1 is 149.63 T2 is 148.87
10/26/2006
Today's Email Alerts
Alert # 5 CAD/JPY Profit at the Speed of Light
Sometimes the markets move so fast they take your breath away. Such was the case with today's CAD/JPY call whihc collapsed almost the moment that we made it. If you followed us in to the trade ( it was trading at approximately 105.40 when it hit all the mailboxes ) then T1 was hit only 10 minutes later and T2 was just hit a few minutes ago. All in all the trade banked +17 and + 47 points in less than 2 hours.
For those waiting to reshort the CAD/JPY at 105.50 we recommend you cancel your orders. Now that T2 has been reached the trade has matured and if it were to race back up to those levels we would need to revaluate its viability at that time. So for those of you who took the ride - congrats. For those of you who missed it - worry not - there are 250 days in a year and a thousand more opportunities in a lifetime. Our job is to try to pick the best one to succeed. So for now cancel any outstanding orders and wait until the next time. In FX there is no shortage of trades.
Alert # 4 CAD/JPY Fast Moving Markets
As soon as we sent out the CAD/JPY email, the pair collapsed. You must be wondering what to do next. Here's what we recommend if you didnt catch it.
Wait for a bounce up to 105.45-105.50, sell there, with the same stop 105.80 and the same targets (T1 105.27, T2 104.93.
Alert # 3 CAD/JPY Suddenly Vulnerable
Canadian Business Condition Orders deteriorated markedly in October dropping to -13.0 from -2.0 expected as the expensive loonie is killing the Canadian exporters. Yesterday the CAD received a boost from higher oil prices but after jumping 2 bucks yesterday oil is likely to taper off for teh rest of the week as no new event risk lies on the horizon. In the meantime the reality of slowdown in Canadian growth is likely to weigh on the market.
Japan has CPI data out tonight and there is chance it may print hotter then expected especially after solid pricing gain in the services sector from tonight's release. So we like this CAD/JPY short here at and 105.50 with a stop at 105.80 our T1 is 105.27 and T2 is 104.93. As usual move stop to break even if T1 is hit
Alert # 2 Closing Out the NZD/JPY Short
NZD/JPY just hit our T2 target of 77.85 (+85 points). For those of you who weren't taken out of the trade on small spike overnight off our trailing stop at 78.22(+48 points) go ahead and make sure you take profits here. Either way you should have banked either 75 or 112 points on both lots of the trade. Not bad for day's work.
We'll be back with more ideas as price action warrants. In the meantime know that our website is down and we are transferring to a new host by next Monday when the site will be up and running again. Good luck and good trading!
Alert # 1 Managing the EUR/GBP Long
We are getting some queries about the EUR/GBP long rec. from yesterday. As noted earlier for those of you not taken taken out of the trade at 6695 - go ahead and take T1 at 6716 for +10 move the stop to breakeven and target 6732 as T2.
Alert # 5 CAD/JPY Profit at the Speed of Light
Sometimes the markets move so fast they take your breath away. Such was the case with today's CAD/JPY call whihc collapsed almost the moment that we made it. If you followed us in to the trade ( it was trading at approximately 105.40 when it hit all the mailboxes ) then T1 was hit only 10 minutes later and T2 was just hit a few minutes ago. All in all the trade banked +17 and + 47 points in less than 2 hours.
For those waiting to reshort the CAD/JPY at 105.50 we recommend you cancel your orders. Now that T2 has been reached the trade has matured and if it were to race back up to those levels we would need to revaluate its viability at that time. So for those of you who took the ride - congrats. For those of you who missed it - worry not - there are 250 days in a year and a thousand more opportunities in a lifetime. Our job is to try to pick the best one to succeed. So for now cancel any outstanding orders and wait until the next time. In FX there is no shortage of trades.
Alert # 4 CAD/JPY Fast Moving Markets
As soon as we sent out the CAD/JPY email, the pair collapsed. You must be wondering what to do next. Here's what we recommend if you didnt catch it.
Wait for a bounce up to 105.45-105.50, sell there, with the same stop 105.80 and the same targets (T1 105.27, T2 104.93.
Alert # 3 CAD/JPY Suddenly Vulnerable
Canadian Business Condition Orders deteriorated markedly in October dropping to -13.0 from -2.0 expected as the expensive loonie is killing the Canadian exporters. Yesterday the CAD received a boost from higher oil prices but after jumping 2 bucks yesterday oil is likely to taper off for teh rest of the week as no new event risk lies on the horizon. In the meantime the reality of slowdown in Canadian growth is likely to weigh on the market.
Japan has CPI data out tonight and there is chance it may print hotter then expected especially after solid pricing gain in the services sector from tonight's release. So we like this CAD/JPY short here at and 105.50 with a stop at 105.80 our T1 is 105.27 and T2 is 104.93. As usual move stop to break even if T1 is hit
Alert # 2 Closing Out the NZD/JPY Short
NZD/JPY just hit our T2 target of 77.85 (+85 points). For those of you who weren't taken out of the trade on small spike overnight off our trailing stop at 78.22(+48 points) go ahead and make sure you take profits here. Either way you should have banked either 75 or 112 points on both lots of the trade. Not bad for day's work.
We'll be back with more ideas as price action warrants. In the meantime know that our website is down and we are transferring to a new host by next Monday when the site will be up and running again. Good luck and good trading!
Alert # 1 Managing the EUR/GBP Long
We are getting some queries about the EUR/GBP long rec. from yesterday. As noted earlier for those of you not taken taken out of the trade at 6695 - go ahead and take T1 at 6716 for +10 move the stop to breakeven and target 6732 as T2.
10/25/2006
ITS BEEN ANOTHER BUSY DAY!
Today's Email Alerts:
Alert # 7 Tighten Stop on T2 for NZD/JPY
We are up approximately 65 pips on our second lot of NZD/JPY and although we have already made sure that this winner will never turn into a loser, we want to lock in some profits as well.
Therefore, we are moving our stop on the second lot of NZD/JPY to 78.22, which would ensure that we have banked 48 pips on the second lot. Tack on the 27 pips from the first lot and we have earned a minimum of 75 pips on this entire trade!
Our second target is still at 77.85.
Alert # 6 T1 Hit in NZD/JPY
Just as we expected, the RBNZ Kept interest rates unchanged at 7.25 percent and gave us an extra bonus when they said that Q4 inflation would be unusually low.
Our first target on NZD/JPY was hit easily, banking us 27 pips. Our stop on the second lot of the position is now at breakeven. Our T2 target is 77.85.
Alert # 5 FOMC Instant Comments
For the third meeting in a row, the Federal Reserve left interest rates unchanged at 5.25 percent. This decision was fully priced into the market and not what traders were sitting on the edges of their seat waiting for. Instead, everyone was focused on the FOMC statement and wanted to see the Fed put their concerns about core price inflation on paper. The statement was virtually unchanged expect for two things. The Fed added the line "Going forward the economy seems likely to expand at a moderate pace." and deleted the reference to commodity prices contributing to the high level of resource utilization. Aside from that, they did not change their stance on inflation. The lack of more hawkish comments has disappointed traders as they send the US dollar and yields lower, resurrecting the possibility of a rate cut early next year. However, even though the comments on inflation did not change much, we want to point out that the statement is still slightly more positive than the last, thanks to the more optimistic take on growth. The take away is - Do not expect the Fed to change rates again any time soon and the knee jerk reaction is more a reflection of reversals on trades by speculators who were looking for more from the Fed. For the time being, 1.25 and 120 will still hold in the EUR/USD and USD/JPY and we expect more dollar bulls to begin to move to the sidelines.
Alert # 4 Looking for Weakness in NZD/JPY
New Zealand had crappy CPI numbers last night. The market was banking on a strong CPI release to justify a rate hike by the RBNZ tonight - and judging from last night's softer data, its not likely that we will see one. Japan on the other hand had stronger trade data out last night and should print hotter CPI numbers tomorrow night.
We are selling NZD/JPY here at 78.70, stop at 79.15. First target is 78.43, second target is 77.85. As usual, if the first target is reached, move your stop to breakeven on the second lot.
Alert # 3 For all those still in EUR/GBP
We took a stop at 6695 today, but many of you may still be in the trade since our original stop was 6690 and we moved it up in the middle of the night. IF you are still holding this trade move your stop to 6695 and place T1 target to 6715.
The bullish IFO numbers may have turned sentiment around in this pair and for those of you stil in the trade its definitely worth to hang in there. Let's see if it can rally to our T1 target.
Alert # 2 Stopped on Long EUR/GBP
We are stopped out on EUR/GBP at 6695 (-11 points) on the trade. Comments by BOE's Bean that inflation remains a worry put the bid back into the pound and scuttled the trade. One of our key rules when trading these short term moves is - we are right or we are out.
We are sidelined for the time being, but tons of event risk later in the day should offer some opportunities. Stay tuned.
Alert #1 Update on Long EUR/GBP
EUR/GBP hasn't moved since yesterday with the market clearly ignoring the weak UK CBI data. We are going to move our stop from 6690 to 6695 risking only 10 points on this trade. German IFO comes out at 4AM EST (8AM GMT) and if it is an upward surprise the pair should move our way if not we are going to take a very small loss an look for better idea later on in the day.
Note also that we going to set T1 target at 6715 for the first 1/2 of the position if it goes our way. If the T1 is hit be sure as always to move stop to breakeven.
Today's Email Alerts:
Alert # 7 Tighten Stop on T2 for NZD/JPY
We are up approximately 65 pips on our second lot of NZD/JPY and although we have already made sure that this winner will never turn into a loser, we want to lock in some profits as well.
Therefore, we are moving our stop on the second lot of NZD/JPY to 78.22, which would ensure that we have banked 48 pips on the second lot. Tack on the 27 pips from the first lot and we have earned a minimum of 75 pips on this entire trade!
Our second target is still at 77.85.
Alert # 6 T1 Hit in NZD/JPY
Just as we expected, the RBNZ Kept interest rates unchanged at 7.25 percent and gave us an extra bonus when they said that Q4 inflation would be unusually low.
Our first target on NZD/JPY was hit easily, banking us 27 pips. Our stop on the second lot of the position is now at breakeven. Our T2 target is 77.85.
Alert # 5 FOMC Instant Comments
For the third meeting in a row, the Federal Reserve left interest rates unchanged at 5.25 percent. This decision was fully priced into the market and not what traders were sitting on the edges of their seat waiting for. Instead, everyone was focused on the FOMC statement and wanted to see the Fed put their concerns about core price inflation on paper. The statement was virtually unchanged expect for two things. The Fed added the line "Going forward the economy seems likely to expand at a moderate pace." and deleted the reference to commodity prices contributing to the high level of resource utilization. Aside from that, they did not change their stance on inflation. The lack of more hawkish comments has disappointed traders as they send the US dollar and yields lower, resurrecting the possibility of a rate cut early next year. However, even though the comments on inflation did not change much, we want to point out that the statement is still slightly more positive than the last, thanks to the more optimistic take on growth. The take away is - Do not expect the Fed to change rates again any time soon and the knee jerk reaction is more a reflection of reversals on trades by speculators who were looking for more from the Fed. For the time being, 1.25 and 120 will still hold in the EUR/USD and USD/JPY and we expect more dollar bulls to begin to move to the sidelines.
Alert # 4 Looking for Weakness in NZD/JPY
New Zealand had crappy CPI numbers last night. The market was banking on a strong CPI release to justify a rate hike by the RBNZ tonight - and judging from last night's softer data, its not likely that we will see one. Japan on the other hand had stronger trade data out last night and should print hotter CPI numbers tomorrow night.
We are selling NZD/JPY here at 78.70, stop at 79.15. First target is 78.43, second target is 77.85. As usual, if the first target is reached, move your stop to breakeven on the second lot.
Alert # 3 For all those still in EUR/GBP
We took a stop at 6695 today, but many of you may still be in the trade since our original stop was 6690 and we moved it up in the middle of the night. IF you are still holding this trade move your stop to 6695 and place T1 target to 6715.
The bullish IFO numbers may have turned sentiment around in this pair and for those of you stil in the trade its definitely worth to hang in there. Let's see if it can rally to our T1 target.
Alert # 2 Stopped on Long EUR/GBP
We are stopped out on EUR/GBP at 6695 (-11 points) on the trade. Comments by BOE's Bean that inflation remains a worry put the bid back into the pound and scuttled the trade. One of our key rules when trading these short term moves is - we are right or we are out.
We are sidelined for the time being, but tons of event risk later in the day should offer some opportunities. Stay tuned.
Alert #1 Update on Long EUR/GBP
EUR/GBP hasn't moved since yesterday with the market clearly ignoring the weak UK CBI data. We are going to move our stop from 6690 to 6695 risking only 10 points on this trade. German IFO comes out at 4AM EST (8AM GMT) and if it is an upward surprise the pair should move our way if not we are going to take a very small loss an look for better idea later on in the day.
Note also that we going to set T1 target at 6715 for the first 1/2 of the position if it goes our way. If the T1 is hit be sure as always to move stop to breakeven.
10/24/2006
Today's Email Alerts:
Alert #1 - Getting Long EUR/GBP
We are going long EUR/GBP here at market at 6706 risking to 6690 as UK Industrial Trends printed far worse than expected at -20. This leaves the BOE rate hike in November very much in doubt and should pressure the pound for the rest of the day. Meantime EZ Industrial Orders continued to power on rising 14% on y/y basis and essentially cementing 3.5% money from ECB at the next meet. This is a soft rec without hard profit targets. we'll monitor the trade and adjust accordingly .
Alert #1 - Getting Long EUR/GBP
We are going long EUR/GBP here at market at 6706 risking to 6690 as UK Industrial Trends printed far worse than expected at -20. This leaves the BOE rate hike in November very much in doubt and should pressure the pound for the rest of the day. Meantime EZ Industrial Orders continued to power on rising 14% on y/y basis and essentially cementing 3.5% money from ECB at the next meet. This is a soft rec without hard profit targets. we'll monitor the trade and adjust accordingly .
For Yahoo and Hotmail Subscribers, who arent receiving the emails, please read the following:
With many of today's email services like Yahoo mail and Hotmail, customers can configure their email accounts to process their incoming mail more efficiently. Typically, a person is able to create a list of "known senders," or a "friends list," and email that comes from the people on the list goes straight through to their inbox.
If you are sending mail to someone who has not put you on these "known" lists, your mail is still being delivered but can be subject to many additional filters. If your mail does not get bounced but does not land in the inbox, it is most likely in the bulk folder. This can change with every mailing you send due to the ISPs dynamic content filtering.
At Constant Contact we are working with these ISPs to improve mail delivery for your permission-based email and decrease the number of "false positives" (good mail which is filtered as bad), but we are not able to give an estimated time frame. Although there is not much you can do about landing in the bulk folder at this time, there are some steps you can take to minimize it.
- Turn on the permission reminder to encourage people to add you to their safe list.
- Turn on Constant Contact Authentication and improve email delivery rates to the ISPs and corporate domains that use email authentication to filter incoming mail.
- Use the Anti-Spam Checker to improve email delivery rates to receivers that use content filtering on incoming mail.
- Put a note on your visitor signup page asking potential subscribers to add your sending address to their safe list when they sign up.
With many of today's email services like Yahoo mail and Hotmail, customers can configure their email accounts to process their incoming mail more efficiently. Typically, a person is able to create a list of "known senders," or a "friends list," and email that comes from the people on the list goes straight through to their inbox.
If you are sending mail to someone who has not put you on these "known" lists, your mail is still being delivered but can be subject to many additional filters. If your mail does not get bounced but does not land in the inbox, it is most likely in the bulk folder. This can change with every mailing you send due to the ISPs dynamic content filtering.
At Constant Contact we are working with these ISPs to improve mail delivery for your permission-based email and decrease the number of "false positives" (good mail which is filtered as bad), but we are not able to give an estimated time frame. Although there is not much you can do about landing in the bulk folder at this time, there are some steps you can take to minimize it.
- Turn on the permission reminder to encourage people to add you to their safe list.
- Turn on Constant Contact Authentication and improve email delivery rates to the ISPs and corporate domains that use email authentication to filter incoming mail.
- Use the Anti-Spam Checker to improve email delivery rates to receivers that use content filtering on incoming mail.
- Put a note on your visitor signup page asking potential subscribers to add your sending address to their safe list when they sign up.
10/23/2006
Today's Email Alerts:
Alert # 3 Stopped on GBP/JPY
We got stpped on GBP/JPY (-50) at 223.65 after unexpected comments by Japan's "Mr. FX" Hiroshimo Watanabe that Japan remains in deflation weighed on the yen all afternoon long.
As we noted in our initial commentary GBP/JPY tends to be a "monster" pair to trade and in retrospect on a day when the G-3 calendar is empty and trade flows are very vulnerable to idle commentary we would have been wiser to stay out of teh market altogether. Fortunately, the economic calendar picks up speed tonight with IFO and then later on FOMC announcement so we may see more promising trades in the near future. For the time being we are sidelined
Alert # 2 GBP/JPY Near Top
After yesterday's explosive rally, GBP/JPY is topping out right around its end of August highs, which is also the highest level its been since August 1998 which makes it a pretty significant level and tough resistance. GBP/JPY is a monster to trade because of the wide daily range. However, there is scope for a move down to 222.75 (First target). Catching a short entry around 223.15 would be best (current levels). This is one of our soft recommendations.
The stop would need to be around 223.65. Second target would be somewhere between 222.45-55
Alert # 1 Ouch! Kiwee goes but we are not on board
NZD/USD declined sharply in the last hour as a general wave of dollar strength ahead of the FOMC meeting tomorrow has pushed the pair to .6635. We are unfortunately out of the trade having covered for a small loss before the week-end. However, those of you still in the trade should cover 1/2 the position at market (.6642) for a 33 point gain and move your stops to breakeven targeting T2 at .6612.
With nothing on the G-3 calendar for the rest of the day we are likely to sidelined ahead of the FOMC tomorrow but stay tuned for further updates.
Alert # 3 Stopped on GBP/JPY
We got stpped on GBP/JPY (-50) at 223.65 after unexpected comments by Japan's "Mr. FX" Hiroshimo Watanabe that Japan remains in deflation weighed on the yen all afternoon long.
As we noted in our initial commentary GBP/JPY tends to be a "monster" pair to trade and in retrospect on a day when the G-3 calendar is empty and trade flows are very vulnerable to idle commentary we would have been wiser to stay out of teh market altogether. Fortunately, the economic calendar picks up speed tonight with IFO and then later on FOMC announcement so we may see more promising trades in the near future. For the time being we are sidelined
Alert # 2 GBP/JPY Near Top
After yesterday's explosive rally, GBP/JPY is topping out right around its end of August highs, which is also the highest level its been since August 1998 which makes it a pretty significant level and tough resistance. GBP/JPY is a monster to trade because of the wide daily range. However, there is scope for a move down to 222.75 (First target). Catching a short entry around 223.15 would be best (current levels). This is one of our soft recommendations.
The stop would need to be around 223.65. Second target would be somewhere between 222.45-55
Alert # 1 Ouch! Kiwee goes but we are not on board
NZD/USD declined sharply in the last hour as a general wave of dollar strength ahead of the FOMC meeting tomorrow has pushed the pair to .6635. We are unfortunately out of the trade having covered for a small loss before the week-end. However, those of you still in the trade should cover 1/2 the position at market (.6642) for a 33 point gain and move your stops to breakeven targeting T2 at .6612.
With nothing on the G-3 calendar for the rest of the day we are likely to sidelined ahead of the FOMC tomorrow but stay tuned for further updates.
10/20/2006
HAVE A GOOD WEEKEND!!!!
Today's Email Alerts:
**It seems many people did not receive the NZD/USD email until after the market closed, just square the trade at the market open on Sunday 4pm EST.
Alert # 3: Close NZD/USD Before the Weekend
We are going to close out the NZD/USD short and get flat for the week-end at market (6685) taking a small -10 point loss here. We like this trade but really want to wait until next weeks CPI data to get a better handle on the entry. Meanwhile, everyone enjoy the week-end and we'll see next week.
Alert #2: Kiweeee
Four days of strength is starting to weigh on the Kiwi. This looks like a possible double top. It was also a former resistance zone from Feb. The dollar is firming, there is no Kiwi data until mid next week. We are shorting here at .6673 with today's high as the stop.
25-30 pips seems very doable. First target is 0.6648. Second target is 0.6612 It's a low risk trade that is certainly worth a try.
Alert #1: AUD/CAD T2 Here
Depending upon how wide your broker spreads you in AUD/CAD, some of you may still be in, especially those who did it via the "legs" > short AUD/USD and short USD/CAD. It's time to get out. USD/CAD had a massive move and is finding support near the 100 day SMA.
AUD/CAD is trading at 0.8517, which another 58 pips for you in the bank.
Today's Email Alerts:
**It seems many people did not receive the NZD/USD email until after the market closed, just square the trade at the market open on Sunday 4pm EST.
Alert # 3: Close NZD/USD Before the Weekend
We are going to close out the NZD/USD short and get flat for the week-end at market (6685) taking a small -10 point loss here. We like this trade but really want to wait until next weeks CPI data to get a better handle on the entry. Meanwhile, everyone enjoy the week-end and we'll see next week.
Alert #2: Kiweeee
Four days of strength is starting to weigh on the Kiwi. This looks like a possible double top. It was also a former resistance zone from Feb. The dollar is firming, there is no Kiwi data until mid next week. We are shorting here at .6673 with today's high as the stop.
25-30 pips seems very doable. First target is 0.6648. Second target is 0.6612 It's a low risk trade that is certainly worth a try.
Alert #1: AUD/CAD T2 Here
Depending upon how wide your broker spreads you in AUD/CAD, some of you may still be in, especially those who did it via the "legs" > short AUD/USD and short USD/CAD. It's time to get out. USD/CAD had a massive move and is finding support near the 100 day SMA.
AUD/CAD is trading at 0.8517, which another 58 pips for you in the bank.
10/19/2006
** It's been a busy day, we banked 3 winning trades for a total of 128 pips!
Today's Email Alerts
Alert # 6 AUD/CAD Taking Profits Here
We're taking profits on our first lot of AUD/CAD here at 0.8555 (+20 pips), moving stop to breakeven on second lot. The breakout in AUD/USD is encouraging us to be a bit more conservative on this trade.
And no one ever went poor taking profits!
Alert # 5 Trade Updates and T2 on USD/CAD
Apologies for the bombardment of emails today, but we have waited long for for a busy trading day!
We're taking profits on our second lot of USD/CAD here. The sell-off stopped exactly at the 200-day SMA and unfortunately our BE stop of 1.1347 is not at a critical technical level, it is below it which means it can still bounce, take us out and then continue lower. We refuse to up our stop to a key technical level and risk giving back some of our profits. We have banked 37 pips on the first low and are now cashing in on 32 pips on the second lot (USD/CAD currently at 1.1315).
Trade Updates We have gotten a slew of questions on USD/JPY. We got taken out of our T2 at breakeven. Lots of you are still in. Congrats. You should manage the trade as you see fit since we are not in it with you.
We are also completely out of the EUR/GBP trade for 15 pip profit on the first lot and 25 pip on the second.
We only have an open AUD/CAD short. Its at breakeven right now and starting to trade lower. We still like it.
Alert # 4 Take Profits on USD/CAD
Awful Philly Fed has sent USD/CAD to 1.1310. Take profits on first lot here for +37 pip profit, move stop on second lot to breakeven
Alert # 3 OPEC to Crush USD/CAD
Saudi Arabia announced that they back OPEC's plans to cut production by 1 million barrels a day. THe cuts are to take in effect Nov 1 and more could be announced at their December. Clearly OPEC is having a big problem with the current price of oil and we expect more aggressive cuts from them if prices do not budge.
Here's another soft recommendation > Short USD/CAD, today's high as stop. It's current trading at 1.1347
Alert # 2 EUR/GBP Banking Profits on Rest +25
Euro has rallied off the news that German eco institutes have upgraded GDP growth to 2.3% from 1.9%. We are going to close out the second half of our EUR/GBP long at market (currently .6725) for a gain of +25 point on this part of the position. In total we we took out 40 (+15 and +25) points out of this trade.
Alert # 1 EUR/GBP Taking Profits
For those of you who took our soft recommendation ( a rec where we make a trade suggestion but do not set hard profit targets) on going long EUR/GBP this morning we are going to close out half the trade at 6714 (+14 points) and move the stop to breakeven (6700) in our case.
Today's Email Alerts
Alert # 6 AUD/CAD Taking Profits Here
We're taking profits on our first lot of AUD/CAD here at 0.8555 (+20 pips), moving stop to breakeven on second lot. The breakout in AUD/USD is encouraging us to be a bit more conservative on this trade.
And no one ever went poor taking profits!
Alert # 5 Trade Updates and T2 on USD/CAD
Apologies for the bombardment of emails today, but we have waited long for for a busy trading day!
We're taking profits on our second lot of USD/CAD here. The sell-off stopped exactly at the 200-day SMA and unfortunately our BE stop of 1.1347 is not at a critical technical level, it is below it which means it can still bounce, take us out and then continue lower. We refuse to up our stop to a key technical level and risk giving back some of our profits. We have banked 37 pips on the first low and are now cashing in on 32 pips on the second lot (USD/CAD currently at 1.1315).
Trade Updates We have gotten a slew of questions on USD/JPY. We got taken out of our T2 at breakeven. Lots of you are still in. Congrats. You should manage the trade as you see fit since we are not in it with you.
We are also completely out of the EUR/GBP trade for 15 pip profit on the first lot and 25 pip on the second.
We only have an open AUD/CAD short. Its at breakeven right now and starting to trade lower. We still like it.
Alert # 4 Take Profits on USD/CAD
Awful Philly Fed has sent USD/CAD to 1.1310. Take profits on first lot here for +37 pip profit, move stop on second lot to breakeven
Alert # 3 OPEC to Crush USD/CAD
Saudi Arabia announced that they back OPEC's plans to cut production by 1 million barrels a day. THe cuts are to take in effect Nov 1 and more could be announced at their December. Clearly OPEC is having a big problem with the current price of oil and we expect more aggressive cuts from them if prices do not budge.
Here's another soft recommendation > Short USD/CAD, today's high as stop. It's current trading at 1.1347
Alert # 2 EUR/GBP Banking Profits on Rest +25
Euro has rallied off the news that German eco institutes have upgraded GDP growth to 2.3% from 1.9%. We are going to close out the second half of our EUR/GBP long at market (currently .6725) for a gain of +25 point on this part of the position. In total we we took out 40 (+15 and +25) points out of this trade.
Alert # 1 EUR/GBP Taking Profits
For those of you who took our soft recommendation ( a rec where we make a trade suggestion but do not set hard profit targets) on going long EUR/GBP this morning we are going to close out half the trade at 6714 (+14 points) and move the stop to breakeven (6700) in our case.
10/18/2006
Today's Email Alerts:
Alert # 2 Looking for AUD/CAD Weakness
After a long stretch of strength, we are looking for a near term top in AUD/CAD. Whenever we trade AUD/CAD, it all boils down to Gold vs. Oil or what we call the G-O Spread. Gold prices are having a tough time breaking $600 while oil is showing signs of bottoming out above $58 We expect more weakness in gold and more strength in oil, which should pressure AUD/CAD lower. CAD is also beginning to come in stronger, with leading indicators printing higher this morning. The rally is getting exhausted technically and fundamentally, we have good reason to believe that the pair is due for a correction.
So we are shorting AUD/CAD here at market (0.8575) with a stop at today' high of 0.8615. Our usually conservative first target will be at 0.8547. Second target is 0.8485. Once the first target is reached, dont forget to move your stop to breakeven.
**We got a Q about a technical setup in the AUD/CAD trade that may be counter to our view > perhaps this is true, but with OPEC's emergency cut, oil looks poised for a bounce which should help the CAD. However, we never want people to follow us blindly. If you dont like the trade for your own reasons or disagree with us, feel free to pass on this one.
Alert #1 BOE Minutes Offer Few Clues
Minutes from the MPC meeting in October revealed 7-2 vote suggesting that the BOE clearly has a hawkish bent at the moment. However, the overall feeing from members was that the risks were finely balanced between growth and slowdown. Given that fact the Central Bank may assume a wait and see posture in November rather than hike outright. All of which leads us to consider EUR/GBP to the long side today risking no more than .6685 as the stop.
**For those who asked us about why we didnt take this trade, it is a soft recommendation, meaning we were certain in the view, but for whatever reasons such as risk/reward, pip opportunity, technicals etc, it may not have been attractive enough for us to make it a full recommendation although we may be in the trade ourselves
Alert # 2 Looking for AUD/CAD Weakness
After a long stretch of strength, we are looking for a near term top in AUD/CAD. Whenever we trade AUD/CAD, it all boils down to Gold vs. Oil or what we call the G-O Spread. Gold prices are having a tough time breaking $600 while oil is showing signs of bottoming out above $58 We expect more weakness in gold and more strength in oil, which should pressure AUD/CAD lower. CAD is also beginning to come in stronger, with leading indicators printing higher this morning. The rally is getting exhausted technically and fundamentally, we have good reason to believe that the pair is due for a correction.
So we are shorting AUD/CAD here at market (0.8575) with a stop at today' high of 0.8615. Our usually conservative first target will be at 0.8547. Second target is 0.8485. Once the first target is reached, dont forget to move your stop to breakeven.
**We got a Q about a technical setup in the AUD/CAD trade that may be counter to our view > perhaps this is true, but with OPEC's emergency cut, oil looks poised for a bounce which should help the CAD. However, we never want people to follow us blindly. If you dont like the trade for your own reasons or disagree with us, feel free to pass on this one.
Alert #1 BOE Minutes Offer Few Clues
Minutes from the MPC meeting in October revealed 7-2 vote suggesting that the BOE clearly has a hawkish bent at the moment. However, the overall feeing from members was that the risks were finely balanced between growth and slowdown. Given that fact the Central Bank may assume a wait and see posture in November rather than hike outright. All of which leads us to consider EUR/GBP to the long side today risking no more than .6685 as the stop.
**For those who asked us about why we didnt take this trade, it is a soft recommendation, meaning we were certain in the view, but for whatever reasons such as risk/reward, pip opportunity, technicals etc, it may not have been attractive enough for us to make it a full recommendation although we may be in the trade ourselves
Make your argument
Before Tom Cruise became a Scientology freak show he actually made a few very good movies including A Few Good Men where he plays a young, cocky military lawyer pitted against Jack Nicholson's whose mesmerizing performance as Colonel Jessep drives the film. There is a scene at the beginning of the movie where Kevin Pollak tries to persuade Cruise to take on a very politically sensitive defense case. In a great screen play written by Aaron Sorkin of West Wing and Studio 60 fame, Pollak tells Cruise :"I just want you to make an argument" to which Cruise wistfully replies, " I bet you father is proud of you. I'll bet he is. I'll bet he bores the shit outta the neighbors and the relatives. "Sam, made Law Review. He's got a big case he's making--He's arguing making an argument."
The characters in the movie use the term "argument" in its most positive sense - as a way to prove the merit of your case. Although we are traders not lawyers we make arguments all the time. Each trade is in an argument between the bulls and the bears. We may not utilize elegant presentation skills or posses powerful oratory abilities of our colleagues in jurisprudence but the battle in the markets is no less fierce than it is in the courts.
Arguing is one of the most valuable activities a trader can do. K and I argue all the time . That's our primary methodology of trade selection and it works well. Why? Because a well constructed argument will either fortify the logic of your position or it destroy it by properly questioning some important underlying point that you may have overlooked. In fact I noticed recently that our best trades occur when K and I are generally in agreement - when our arguments are sound. Times when one or the other one of us is doubtful about the setup - the trades are usually losers.
So go ahead make your argument - it will make you a better trader.
Before Tom Cruise became a Scientology freak show he actually made a few very good movies including A Few Good Men where he plays a young, cocky military lawyer pitted against Jack Nicholson's whose mesmerizing performance as Colonel Jessep drives the film. There is a scene at the beginning of the movie where Kevin Pollak tries to persuade Cruise to take on a very politically sensitive defense case. In a great screen play written by Aaron Sorkin of West Wing and Studio 60 fame, Pollak tells Cruise :"I just want you to make an argument" to which Cruise wistfully replies, " I bet you father is proud of you. I'll bet he is. I'll bet he bores the shit outta the neighbors and the relatives. "Sam, made Law Review. He's got a big case he's making--He's arguing making an argument."
The characters in the movie use the term "argument" in its most positive sense - as a way to prove the merit of your case. Although we are traders not lawyers we make arguments all the time. Each trade is in an argument between the bulls and the bears. We may not utilize elegant presentation skills or posses powerful oratory abilities of our colleagues in jurisprudence but the battle in the markets is no less fierce than it is in the courts.
Arguing is one of the most valuable activities a trader can do. K and I argue all the time . That's our primary methodology of trade selection and it works well. Why? Because a well constructed argument will either fortify the logic of your position or it destroy it by properly questioning some important underlying point that you may have overlooked. In fact I noticed recently that our best trades occur when K and I are generally in agreement - when our arguments are sound. Times when one or the other one of us is doubtful about the setup - the trades are usually losers.
So go ahead make your argument - it will make you a better trader.
10/17/2006
Today's Email Alert:
Yen Trade Reaches T1 Move stop to Break Even
USD/JPY tagged our 1st target of 118.72 banking us +46 points since yesterday. We have now moved the stop to break even (119.18) on the rest of the position looking to press our T2 target of 117.85
Yen Trade Reaches T1 Move stop to Break Even
USD/JPY tagged our 1st target of 118.72 banking us +46 points since yesterday. We have now moved the stop to break even (119.18) on the rest of the position looking to press our T2 target of 117.85
10/16/2006
Today's Email Alerts:
Russia Loves the Yen and So Do We
Over night news that the Russian central bank is diversifying a portion of its reserves into the Japanese yen and we think its wise to follow their lead. Over the past two weeks yen news has become decidedly bullish for several reasons
1. Last Friday’s surprising statement by BOJ Governor Fukui that the central bank will consider raising rates by 25bp before the year end.
2. Record yen short positioning readings in the latest IMM data from CME which suggest that the carry may have become too much of a one way trade, setting up the Johnny-come-lately speculative accounts for a possible nasty turn in the pair.
3. Upbeat readings from the latest Eco Watchers survey which over the past two years tended to be an excellent forecaster of near term yen direction.
Therefore we recommend shorting USD/JPY at market currently 119.18 with a stop at 119.80 Our T1 profit target is 118.72 at which point we move the stop to breakeven. Our T2 target is 117.85
Russia Loves the Yen and So Do We
Over night news that the Russian central bank is diversifying a portion of its reserves into the Japanese yen and we think its wise to follow their lead. Over the past two weeks yen news has become decidedly bullish for several reasons
1. Last Friday’s surprising statement by BOJ Governor Fukui that the central bank will consider raising rates by 25bp before the year end.
2. Record yen short positioning readings in the latest IMM data from CME which suggest that the carry may have become too much of a one way trade, setting up the Johnny-come-lately speculative accounts for a possible nasty turn in the pair.
3. Upbeat readings from the latest Eco Watchers survey which over the past two years tended to be an excellent forecaster of near term yen direction.
Therefore we recommend shorting USD/JPY at market currently 119.18 with a stop at 119.80 Our T1 profit target is 118.72 at which point we move the stop to breakeven. Our T2 target is 117.85
10/13/2006
HAVE A GOOD WEEKEND!!
Today's Email Alerts:
Alert # 3 Stopped at Breakeven on rest of USD/JPY
We were stopped at breakeven (119.40) on a retrace in USD/JPY. We are going to stand aside until event risk for US Retail Sales passes. Specs may try to take out the 120.00 option barriers so we prefer to watch for now, but may come back into the trade when time warrants. Overall we were able to bank 23 points and those that managed to get T1 limit hit took out 28 points.
Alert # 2 Update on Taking Profit T1 in USD/JPY
For those who set T1 target at 119.12 its just been hit so you are ahead of us by 5 points (119.17) congrats! In either case everyone go to breakeven and let try to squeeze the rest of the position to 118.25 off this yen bullish news. (BOJ may raise before year end)
Alert # 1 Taking Profit T1 in USD/JPY
Fukui on the wires saying he may raise rates this year and yen is rallying. We are are going to lock in T1 at market 119.17 currently (+23) and go to breakeven stop Still targeting 118.25 for rest of position.
Today's Email Alerts:
Alert # 3 Stopped at Breakeven on rest of USD/JPY
We were stopped at breakeven (119.40) on a retrace in USD/JPY. We are going to stand aside until event risk for US Retail Sales passes. Specs may try to take out the 120.00 option barriers so we prefer to watch for now, but may come back into the trade when time warrants. Overall we were able to bank 23 points and those that managed to get T1 limit hit took out 28 points.
Alert # 2 Update on Taking Profit T1 in USD/JPY
For those who set T1 target at 119.12 its just been hit so you are ahead of us by 5 points (119.17) congrats! In either case everyone go to breakeven and let try to squeeze the rest of the position to 118.25 off this yen bullish news. (BOJ may raise before year end)
Alert # 1 Taking Profit T1 in USD/JPY
Fukui on the wires saying he may raise rates this year and yen is rallying. We are are going to lock in T1 at market 119.17 currently (+23) and go to breakeven stop Still targeting 118.25 for rest of position.
10/12/2006
Today's Email Alerts:
Alert #2 The Time Has Come For USD/JPY
As we said in our morning email, USD/JPY is turning! This is a low risk play for a real turn. Tonight's BoJ Monthly Report and comments from Fukui could help drive further weakness in the currency pair. We expect the central bank to acknowledge the benefits that the slide in yen will bring to the export sector and the economy in general. Also, we have not forgotten that the Eco Watchers "man on the street," udon noodle selling vendor is more optimistic than the previous month - a good sign that the economy is indeed turning.
We are selling USD/JPY here at 119.42 with a stop at 119.80. First target is 119.12, if that is reached, move your stop to breakeven on the second lot. Second target is 118.25.
*** Also, we are looking for successful traders for our new book. It's a Market Wizards for the little guy. You need to have a 2 year profitable track record and a minimum of a six figure account. We are interested in human stories, all correspondence will be confidential. This is not just for FX traders, all markets (Futures, Options, Equities). If you are interested or know someone who qualifies, please email us at bktrader@gmail.com
Alert #1 Trade Deficit and USD/JPY
Pretty bad trade deficit number today. We'll need to see if next week's TIC number matches up. Market thinks that the stock rally could have drawn an increase in net foreign purchases - we'll have to see.
We have a few pairs that are turning with low risk (swing high), worth a look. Shorts EUR/CHF, USD/JPY, EUR/JPY Long AUD/NZD
Alert #2 The Time Has Come For USD/JPY
As we said in our morning email, USD/JPY is turning! This is a low risk play for a real turn. Tonight's BoJ Monthly Report and comments from Fukui could help drive further weakness in the currency pair. We expect the central bank to acknowledge the benefits that the slide in yen will bring to the export sector and the economy in general. Also, we have not forgotten that the Eco Watchers "man on the street," udon noodle selling vendor is more optimistic than the previous month - a good sign that the economy is indeed turning.
We are selling USD/JPY here at 119.42 with a stop at 119.80. First target is 119.12, if that is reached, move your stop to breakeven on the second lot. Second target is 118.25.
*** Also, we are looking for successful traders for our new book. It's a Market Wizards for the little guy. You need to have a 2 year profitable track record and a minimum of a six figure account. We are interested in human stories, all correspondence will be confidential. This is not just for FX traders, all markets (Futures, Options, Equities). If you are interested or know someone who qualifies, please email us at bktrader@gmail.com
Alert #1 Trade Deficit and USD/JPY
Pretty bad trade deficit number today. We'll need to see if next week's TIC number matches up. Market thinks that the stock rally could have drawn an increase in net foreign purchases - we'll have to see.
We have a few pairs that are turning with low risk (swing high), worth a look. Shorts EUR/CHF, USD/JPY, EUR/JPY Long AUD/NZD
10/11/2006
Random Bloggering:
The potential of the EUR/USD hitting a bottom is growing by the day. The currency has now sold off for seven consecutive days, which is the longest stretch of weakness since June when it also faced seven days of continuous losses. Aside from that time, there has only been one instance over the past seven years that the EUR/USD has sold off for more than seven days, which was back in August of 2003.
Today's Email Alerts:
Alert #2:
The Fed's tougher inflation tone has sent the dollar rallying. The FOMC minutes from the September Fed meeting indicated that even though the extent of the housing downturn is uncertain, they do believe that the recent pickup in retail sales should lead to quicker and stronger growth next year. Given the moderately more optimistic outlook and the tough leash they want to keep on inflation, the Fed is not likely to cut interest rates soon.
We banked 17 pips on the first lot of our Euro long trade and got stopped out on the second lot at breakeven. The short term turn trade turned, but just not as much as we would have liked to seen. Nevertheless, we kept this winner a winner and followed our #1 Rule of Never Letting a Winner Turn Into a Loser.
Alert #1:
Market finally broke through the 1.2550 level. Our initial T1 target was 1.2560 but we are going to take it here at market (currently 1.2552) for +17 points and will move to breakeven on rest. Our T2 target remains 1.2625
The potential of the EUR/USD hitting a bottom is growing by the day. The currency has now sold off for seven consecutive days, which is the longest stretch of weakness since June when it also faced seven days of continuous losses. Aside from that time, there has only been one instance over the past seven years that the EUR/USD has sold off for more than seven days, which was back in August of 2003.
Today's Email Alerts:
Alert #2:
The Fed's tougher inflation tone has sent the dollar rallying. The FOMC minutes from the September Fed meeting indicated that even though the extent of the housing downturn is uncertain, they do believe that the recent pickup in retail sales should lead to quicker and stronger growth next year. Given the moderately more optimistic outlook and the tough leash they want to keep on inflation, the Fed is not likely to cut interest rates soon.
We banked 17 pips on the first lot of our Euro long trade and got stopped out on the second lot at breakeven. The short term turn trade turned, but just not as much as we would have liked to seen. Nevertheless, we kept this winner a winner and followed our #1 Rule of Never Letting a Winner Turn Into a Loser.
Alert #1:
Market finally broke through the 1.2550 level. Our initial T1 target was 1.2560 but we are going to take it here at market (currently 1.2552) for +17 points and will move to breakeven on rest. Our T2 target remains 1.2625
10/10/2006
Today's Email Alerts:
Alert #2: Euro Turn Short Term Trade
We are updating the Target on our EUR/USD long trade The first target should be 1.2560 Long EUR/USD at 1.2535, stop at 1.2510. First target is 1.2560, second target is 1.2625. If the first target is reached, move your stop to breakeven.
The dollar has been very strong today leading the Euro to fresh two month lows. We are seeing signs of exhaustion that may give us an opportunity for a small risk turn to the upside. We are going long here at 1.2535.
Alert #1: Watch the Yen
For the second consecutive month The Eco Watchers survey printed above the 50 boom/bust level coming in at 51.0. The man in the street survey of barbers waiters and taxi drivers is our single most favorite indicator of true state of economic conditions in Japan and right now it is signaling all systems go.
The Eco Watchers tends to be an early forcaster of the turn in USD/JPY so for now we just want to watch the price action. In EUR/JPY - where 150 appears to be a cement ceiling for the pair - there may be a tempting trade. For those who want to take a shot at a short keep the stops no wider than 150.60.
Alert #2: Euro Turn Short Term Trade
We are updating the Target on our EUR/USD long trade The first target should be 1.2560 Long EUR/USD at 1.2535, stop at 1.2510. First target is 1.2560, second target is 1.2625. If the first target is reached, move your stop to breakeven.
The dollar has been very strong today leading the Euro to fresh two month lows. We are seeing signs of exhaustion that may give us an opportunity for a small risk turn to the upside. We are going long here at 1.2535.
Alert #1: Watch the Yen
For the second consecutive month The Eco Watchers survey printed above the 50 boom/bust level coming in at 51.0. The man in the street survey of barbers waiters and taxi drivers is our single most favorite indicator of true state of economic conditions in Japan and right now it is signaling all systems go.
The Eco Watchers tends to be an early forcaster of the turn in USD/JPY so for now we just want to watch the price action. In EUR/JPY - where 150 appears to be a cement ceiling for the pair - there may be a tempting trade. For those who want to take a shot at a short keep the stops no wider than 150.60.
10/09/2006
Today's Email Alerts:
FX Volumes to Double in 2007
http://www.ft.com/cms/s/b26bccf4-57b9-11db-be9f-0000779e2340.html
We are adding to the bigger numbers!
" He said the rise in foreign exchange volumes was being helped by the increase of retail trading activity feeding into the institutional markets, as aggregation of individual investors became a force to be reckoned with. Structured retail FX products will be instrumental in driving volume growth,” said Mr Price, who added that he expected 44 per cent of trading to be conducted electronically in 2007, compared with 40 per cent in 2006."
Alert #1 Stopped on GBP/USD Long
UK PPI data printed way below expectations as drop in commodities caused sharp drops in both inputs and output values and quelled expectations of further UK rate hikes. Cable traded weak as result and took out our stop at 1.8660. We still like the anti-dollar trade but in retrospect the euro would have been a better choice. We are sidelined for now.
FX Volumes to Double in 2007
http://www.ft.com/cms/s/b26bccf4-57b9-11db-be9f-0000779e2340.html
We are adding to the bigger numbers!
" He said the rise in foreign exchange volumes was being helped by the increase of retail trading activity feeding into the institutional markets, as aggregation of individual investors became a force to be reckoned with. Structured retail FX products will be instrumental in driving volume growth,” said Mr Price, who added that he expected 44 per cent of trading to be conducted electronically in 2007, compared with 40 per cent in 2006."
Alert #1 Stopped on GBP/USD Long
UK PPI data printed way below expectations as drop in commodities caused sharp drops in both inputs and output values and quelled expectations of further UK rate hikes. Cable traded weak as result and took out our stop at 1.8660. We still like the anti-dollar trade but in retrospect the euro would have been a better choice. We are sidelined for now.
10/08/2006
In Praise of Intolerance
Recently we conducted an interesting experiment. We examined all of our winning trades over the past two years. Guess what we discovered? 90% of all winning trades never went against us by more that 70 points.
In FX a good trade is a trade that’s profitable from the get go. That’s it. It’s that simple. We may use fundamental, technical and positional analysis to select the highest probability setups, but once we are in the trade there is only factor that controls our decisions – price.
You can argue until you are blue in the face as to why the trade SHOULD go your way, but if Mr. Market disagrees – you better pay heed. This week-end we came across a great quote on one of the trading boards on the Web. The poster wrote, “When you are in the prediction business – you never go all in.“ This is the mantra we live by. There is always another day and another opportunity to make money – as long as you control risk
Stops are not a reflection of your incompetence. Getting stopped out does not necessarily mean that you are wrong. It may just mean that you are early. One key difference between amateurs and pros is that pros will make several probative trades in the same direction if they believe that the setup is strong. Amateurs will often walk away in frustration once they get stopped out or worse still will flip their position only to get stopped out when their original thesis proves true.
In almost every other aspect of life intolerance is a horrible character trait. It limits your creativity and leads you to make decisions based on ignorance and prejudice. In fact in America our cultural instinct against intolerance is so strong that we tend to carry it over into our trading – which is the one area of life where intolerance can be truly an asset.
Allows us to explain. Most traders lose because they tolerate their losses. They allow positions to move hundreds of points against their entries, they add to losing positions and more often than not they allow one bad trade to wipe out many trades worth of profits.
Trading is not the art making money. It is the business of not losing money. That may sound simplistic, but in order really understand trading you must accept the fact that wins are often a matter of luck but losses are strictly a question of skill. That is why once the trade moves in our direction by 50% of our risk we move the stop to break even and take some money off the table. If we get stopped at break even and the trade then goes on to made oodles of cash, so be it. We move on and look for the next good idea.
Let us demonstrate to you in very simple terms why capping your losses is so important. Two scenarios. Scenario one you are in a short term day trade with 30 points of risk. It moves in your direction by 15 points then stalls. You place the stop at breakeven and it bounces back and takes you out of the market. Scenario 2 is the same trade except this time you hold your stop 30 points back and refuse to budge. You are either going to make your target or you will get stopped you tell yourself. Surprise, surprise, you get stopped out for –30. But here is the kicker. Suppose you wanted to make 30 points by end of that trading day. Under scenario 1 you would only need to make 30 points in a trade to reach your target. Scenario 2? You would have to make DOUBLE – 60 points to reach that same target. Why? Because you would have to make up the 30 point loss before you could even begin to think about making profits. Repeat this dynamic hundreds of times over a year and you start to appreciate the fact that profitable trading has far more to do minimizing losses that any other factor and therefore the most successful practitioners of the craft are some of the most intolerant people on earth.
10/06/2006
Today's email alerts:
Alert #2 Buying GBP/USD on Knee Jerk NFP Reaction
The dollar has become grossly overbought on what certainly appears to be less than stellar NFP results. Granted prior months reading was revised sharply higher but wage growth remains anemic and this months data of just 51K new jobs hardly demonstrates robustness.
With momentum funds having now driven weak dollar shorts out of the market we think that further dollar buying may be over for now, as there is really very little fundamental reason to be bullish the greenback. Thus without additional reasons to pursue this rally we think the move may retrace. We'd like to take advantage of that idea by getting long GBP/USD at 1.8710 or better with a stop on the whole position at 1.8660 Our Target 1 is 1.8745 Our Target 2 is 1.8790 As always move the stop to breakeven once T1 is achieved.
Alert # 1 Payroll Payoff
Anyone who followed our soft recs on shorting USD/CAD and long EUR/GBP should have taken something off the table and now gone to break-even ahead of the event risk for the day.
Now on to the NFPs - unless we print wildly over or under 100K the number that will truly matter will be wages. Why wages? Because at 4.7% unemployment we have enough jobs but we need mo' money for the US consumer to spend this Xmas because the house ATM game is long long gone. So now wage growth becomes key to the dollar bullish case. Let wait and see what they deliver.
Alert #2 Buying GBP/USD on Knee Jerk NFP Reaction
The dollar has become grossly overbought on what certainly appears to be less than stellar NFP results. Granted prior months reading was revised sharply higher but wage growth remains anemic and this months data of just 51K new jobs hardly demonstrates robustness.
With momentum funds having now driven weak dollar shorts out of the market we think that further dollar buying may be over for now, as there is really very little fundamental reason to be bullish the greenback. Thus without additional reasons to pursue this rally we think the move may retrace. We'd like to take advantage of that idea by getting long GBP/USD at 1.8710 or better with a stop on the whole position at 1.8660 Our Target 1 is 1.8745 Our Target 2 is 1.8790 As always move the stop to breakeven once T1 is achieved.
Alert # 1 Payroll Payoff
Anyone who followed our soft recs on shorting USD/CAD and long EUR/GBP should have taken something off the table and now gone to break-even ahead of the event risk for the day.
Now on to the NFPs - unless we print wildly over or under 100K the number that will truly matter will be wages. Why wages? Because at 4.7% unemployment we have enough jobs but we need mo' money for the US consumer to spend this Xmas because the house ATM game is long long gone. So now wage growth becomes key to the dollar bullish case. Let wait and see what they deliver.
Great insight from an expert that we read regularly, Roubini talks about the difference in styles of how the US central bank and the UK/Australia/New Zealand central banks handle housing bubbles.
http://www.rgemonitor.com/blog/roubini/150552
http://www.rgemonitor.com/blog/roubini/150552
10/05/2006
Today's Email Alerts:
Alert # 3
Payrolls are due out tomorrow and its really a cointoss at the moment. We are looking for a weaker number, but it really doesnt matter which way it swings since what we really want is some action! We posted a full NFP outlook on DailyFX (click here) if you want more info on that.
Otherwise, we took profit on our first lot of USD/JPY at 117.57 and still have a second lot on with a breakeven stop of 117.80. This still looks good to us technically and in line with our weak payroll view. Since its just house's money at this point, we are comfortable keeping it on.
Some other things that we want to point out: Oil is back above $60 - USD/CAD is looking like its topping out with a possible move down to 1.1200 - another high probability setup that requires mentioning but we are on the sidelines given NFPs tomorrow.
Yen linked pairs are all sitting at key support levels which can offer low risk trades if they begin to bounce post payrolls.
Lastly, we want to extend a warm welcome to all of our new subscribers!
Alert #2
BOE held rates at 4.75% as expeceted and ECB is projecetd to got to 3.25% in the next half hour. Most probable impact for the day? Watch EUR/GBP it may extend the recent bounce all teh way to 6770 but risk here should be very tight. If it gives up 6740 the news is probably not euro bullish and you should bail.
Alert # 1
With yen within a few points of our T1 target of 117.50 we are going take profits here on the first half of the trade at market (currently) 117.56 and got to break even on our stop. If all CB rate annoucemnet news goes our way T2 should be within our reach if not we'll at least take something off the table. Given the fact that this is the yen we are trading a bird in hand is worth two in the bush.
Finally a big shoutout to all the Booker crew. Welcome we ra every glad to have you on board.
Alert # 3
Payrolls are due out tomorrow and its really a cointoss at the moment. We are looking for a weaker number, but it really doesnt matter which way it swings since what we really want is some action! We posted a full NFP outlook on DailyFX (click here) if you want more info on that.
Otherwise, we took profit on our first lot of USD/JPY at 117.57 and still have a second lot on with a breakeven stop of 117.80. This still looks good to us technically and in line with our weak payroll view. Since its just house's money at this point, we are comfortable keeping it on.
Some other things that we want to point out: Oil is back above $60 - USD/CAD is looking like its topping out with a possible move down to 1.1200 - another high probability setup that requires mentioning but we are on the sidelines given NFPs tomorrow.
Yen linked pairs are all sitting at key support levels which can offer low risk trades if they begin to bounce post payrolls.
Lastly, we want to extend a warm welcome to all of our new subscribers!
Alert #2
BOE held rates at 4.75% as expeceted and ECB is projecetd to got to 3.25% in the next half hour. Most probable impact for the day? Watch EUR/GBP it may extend the recent bounce all teh way to 6770 but risk here should be very tight. If it gives up 6740 the news is probably not euro bullish and you should bail.
Alert # 1
With yen within a few points of our T1 target of 117.50 we are going take profits here on the first half of the trade at market (currently) 117.56 and got to break even on our stop. If all CB rate annoucemnet news goes our way T2 should be within our reach if not we'll at least take something off the table. Given the fact that this is the yen we are trading a bird in hand is worth two in the bush.
Finally a big shoutout to all the Booker crew. Welcome we ra every glad to have you on board.
Fundamental Divergence
Anyone who has traded for more than a week is familiar with the concept of divergence. In technical analysis it basically boils down to this - price and momentum begin to register different readings. For example Price may make new highs but RSI does not. Almost all double tops and double bottoms are examples of divergence.
Does it work all the time? Absolutely not. Momentum may slacken - but instead of a turn in price it may simply signal a pause. That's why trading divergence with stops is essential for long term success.
Nevertheless divergence is the underlying foundation of most technical setups. The primary reason for its popularity is the asymmetrical nature of risk in the trade. If you can catch the turn in the pair the reward can be 2 or 3 times the risk - so only a 50% rate of accuracy gives you a tremendous edge.
As nice as technical divergence is - we like to trade fundamental divergence. What is that exactly? Fundamental divergence occurs in the currency market when economic news is unambiguously bad but price action responds positively. This setup is most effective when price is already in overbought territory and bad news makes it go even higher and works worst when price is oversold because the impact of bad news on oversold conditions is far smaller then on overbought conditions.
Basically - if price action doesn't make logical sense its usually wrong. Yesterday was a perfect example of this rule in action.
This setup is by no means fool proof. Sometimes price can and will trade against the news decimating your equity if you don't nip it in the bud. That why we always use swing highs/lows as my technical reference points and put our stops there.
Hey - sometimes we may trade fundamentally but we always manage our money technically :).
10/04/2006
Today's Email Alerts
Alert # 3 Shorting USD/JPY
We want to short USD/JPY once again since the risk / reward is far too attractive to not give this one a try. The 118 barrier seems to be rock solid as we the pair fails to break above that level and the upside down hammer is looking pretty bearish as well. Unless North Korea tests a bomb overnight, we think that this is a nice high probability trade. Dollar bearish fundamentals are too long to list least of which is that NFPs has the potential to stink quite a bit on Friday.
We are shorting here (make sure you get a price at 117.80 or above), with a 118.30 stop (today's high). First target is very conservative, but still respectable 30 pips at 117.50. Target 2 is 116.85.
Alert # 2 CADJPY +53 pips on first lot, +123 pips on second
Time to get out of CAD/JPY. It's trading at 104.55 at the moment. We banked 53 pips on our first lot and 123 pips on our second.
If you went long at 1.1225 in USD/CAD. It traded as high as 1.1293, above the 1.1280 first level of resistance we mentioned yesterday. We recommend taking some if not all of your profits here.
Alert # 1 Pressing the Stop to 105.20
CAD/JPY has moved deep into our profit target territory. We are maintain our take profit at 104.45 for the second half of the position, but having recently moved the stop to break even we lower once again to 105.20 (+60 in the money) to ensure that the trade will be positive on the whole position. Oil dropped below 59 yesterday so hopefully further liquidation will get us to our T2 target.
Alert # 3 Shorting USD/JPY
We want to short USD/JPY once again since the risk / reward is far too attractive to not give this one a try. The 118 barrier seems to be rock solid as we the pair fails to break above that level and the upside down hammer is looking pretty bearish as well. Unless North Korea tests a bomb overnight, we think that this is a nice high probability trade. Dollar bearish fundamentals are too long to list least of which is that NFPs has the potential to stink quite a bit on Friday.
We are shorting here (make sure you get a price at 117.80 or above), with a 118.30 stop (today's high). First target is very conservative, but still respectable 30 pips at 117.50. Target 2 is 116.85.
Alert # 2 CADJPY +53 pips on first lot, +123 pips on second
Time to get out of CAD/JPY. It's trading at 104.55 at the moment. We banked 53 pips on our first lot and 123 pips on our second.
If you went long at 1.1225 in USD/CAD. It traded as high as 1.1293, above the 1.1280 first level of resistance we mentioned yesterday. We recommend taking some if not all of your profits here.
Alert # 1 Pressing the Stop to 105.20
CAD/JPY has moved deep into our profit target territory. We are maintain our take profit at 104.45 for the second half of the position, but having recently moved the stop to break even we lower once again to 105.20 (+60 in the money) to ensure that the trade will be positive on the whole position. Oil dropped below 59 yesterday so hopefully further liquidation will get us to our T2 target.
10/03/2006
We love this comment from our Technical Analyst at DailyFX.com so much we had to post it on our blog:
"Bollinger Bands is the tightest ever for the EUR/USD since its inception and if we look back 10 years with synthetic prices, there are only two instances when volatility was this low – December 1996 and August 1998. Both instances led to breakouts within 2 weeks and moves of over 1,000 pips in less than 2 months."
This is a unique development that we choose not to ignore.
"Bollinger Bands is the tightest ever for the EUR/USD since its inception and if we look back 10 years with synthetic prices, there are only two instances when volatility was this low – December 1996 and August 1998. Both instances led to breakouts within 2 weeks and moves of over 1,000 pips in less than 2 months."
This is a unique development that we choose not to ignore.
Tuesday's Email Alerts
Alert # 3 - More to this Break in USD/CAD
The break higher today in USD/CAD is looking very constructive. The currency pair has cleared all moving averages on the daily as well as the 50% fibo resistance stemming from the 1.0932-1.1458 rally - which we find quite meaningful. The currency is finally reacting to the drop in oil!
As long as it holds above 1.1150, any buy on dip opportunity would probably be a smart move. First level of resistance is not far though at 1.1280, which were former highs, but above that, we culd see it hit 1.1330 if not more.
Alert # 2 Tightening Stop in USD/JPY
USD/JPY was moving our way in the wee hours and stopped 10 pips short of our first target after North Korea announced plans to conduct another nuclear test. Although we still like the USD/JPY to the short side, if it manages to break above 118.00, the odds for our stop being taken out would be extremely high.
Therefore, we want to tighten up the stop to 118.10 and reduce the risk on the trade to 35 pips.
Alert #1 Moving Stop in CAD/JPY
With Market within points of our T1 target of 105.18 we are going to take the profit on half the position right here at 105.25 banking 53 points. The rest of the trade stays in play with stop at break even
We are still aiming a second target of 104.45.
Alert # 3 - More to this Break in USD/CAD
The break higher today in USD/CAD is looking very constructive. The currency pair has cleared all moving averages on the daily as well as the 50% fibo resistance stemming from the 1.0932-1.1458 rally - which we find quite meaningful. The currency is finally reacting to the drop in oil!
As long as it holds above 1.1150, any buy on dip opportunity would probably be a smart move. First level of resistance is not far though at 1.1280, which were former highs, but above that, we culd see it hit 1.1330 if not more.
Alert # 2 Tightening Stop in USD/JPY
USD/JPY was moving our way in the wee hours and stopped 10 pips short of our first target after North Korea announced plans to conduct another nuclear test. Although we still like the USD/JPY to the short side, if it manages to break above 118.00, the odds for our stop being taken out would be extremely high.
Therefore, we want to tighten up the stop to 118.10 and reduce the risk on the trade to 35 pips.
Alert #1 Moving Stop in CAD/JPY
With Market within points of our T1 target of 105.18 we are going to take the profit on half the position right here at 105.25 banking 53 points. The rest of the trade stays in play with stop at break even
We are still aiming a second target of 104.45.
10/02/2006
Today's Email Alerts
Alert # 2 - Moving Stop in CAD/JPY
On Friday, we recommended a CAD/JPY short at market which was approximately 105.80. The trade is moving in our favor and we want to move our stop to breakeven on both of the lots at the moment. This makes sure that this trade never becomes a loser.
We are still aiming for a first target of 105.18 and then a second target of 104.45.
Alert # 1 - USD/JPY Double Top
USD/JPY is forming a double top and we are really liking it on the short side. The potential for further weakness can be seen on multiple timeframes. The double top can be seen on the daily. Also check out the 4 hour charts. There is a major break in trend with MACD pointing to the downside. Fundamentals also support a turn in the yen with a stronger Tankan report. Risk is small at this point.
We recommend shorting USD/JPY at market (currently 117.75), with a stop at 118.30. Our first target is 117.28, second target is 116.30. When the first target is hit, move stop to breakeven on second lot.
As for our CADJPY positioning, we are 35 pips in the money. We still like it and are holding on tight
Alert # 2 - Moving Stop in CAD/JPY
On Friday, we recommended a CAD/JPY short at market which was approximately 105.80. The trade is moving in our favor and we want to move our stop to breakeven on both of the lots at the moment. This makes sure that this trade never becomes a loser.
We are still aiming for a first target of 105.18 and then a second target of 104.45.
Alert # 1 - USD/JPY Double Top
USD/JPY is forming a double top and we are really liking it on the short side. The potential for further weakness can be seen on multiple timeframes. The double top can be seen on the daily. Also check out the 4 hour charts. There is a major break in trend with MACD pointing to the downside. Fundamentals also support a turn in the yen with a stronger Tankan report. Risk is small at this point.
We recommend shorting USD/JPY at market (currently 117.75), with a stop at 118.30. Our first target is 117.28, second target is 116.30. When the first target is hit, move stop to breakeven on second lot.
As for our CADJPY positioning, we are 35 pips in the money. We still like it and are holding on tight
10/01/2006
Friday's Email Alerts (09/29/06)
CADJPY Short Alert
Earlier we had said that we are looking at a CADJPY short and the more that we think about it, the more we like it. CADJPY has barely responded to the turn in oil. We are sure there are tons of speculators in the CAD as there was in oil. We also expect the strong loonie to begin to have a drag on upcoming economic data. As a big exporter, canada not only hurts from a drop in the prices of its core export, but also in an appreciation of its currencies .
As for the JPY, this weekends Tankan (Sun) could be strong. If so, that would certainly help rally the currency, which is already seeing upward pressure from MoF comments and Yuan appreciation.
As such, we are shorting CADJPY at market (105.80) with a stop at 106.40.
First target is 105.18, if that is reached, move your stop to breakeven Second target is 104.45.
Setting up for test of range lows in EUR/USD
After the disappointing German retail sales and Eurozone CPI numbers this morning, the market's sentiment has turned Euro bearish. The uptick in this morning's US PCE deflator number is adding to the currency's weakness. Although we want to point out that US personal spending grew by the weakest pace since November, the market is ignoring that at the moment. We see a test of 1.2625 and possibly 1.2600. Beyond that however, losses may remain limited. Watch out, if the Dow begins to top out, the US dollar could bottom as well. We are also watching CADJPY - Appears to be a double top. All cad pairs are beginning to turn
CADJPY Short Alert
Earlier we had said that we are looking at a CADJPY short and the more that we think about it, the more we like it. CADJPY has barely responded to the turn in oil. We are sure there are tons of speculators in the CAD as there was in oil. We also expect the strong loonie to begin to have a drag on upcoming economic data. As a big exporter, canada not only hurts from a drop in the prices of its core export, but also in an appreciation of its currencies .
As for the JPY, this weekends Tankan (Sun) could be strong. If so, that would certainly help rally the currency, which is already seeing upward pressure from MoF comments and Yuan appreciation.
As such, we are shorting CADJPY at market (105.80) with a stop at 106.40.
First target is 105.18, if that is reached, move your stop to breakeven Second target is 104.45.
Setting up for test of range lows in EUR/USD
After the disappointing German retail sales and Eurozone CPI numbers this morning, the market's sentiment has turned Euro bearish. The uptick in this morning's US PCE deflator number is adding to the currency's weakness. Although we want to point out that US personal spending grew by the weakest pace since November, the market is ignoring that at the moment. We see a test of 1.2625 and possibly 1.2600. Beyond that however, losses may remain limited. Watch out, if the Dow begins to top out, the US dollar could bottom as well. We are also watching CADJPY - Appears to be a double top. All cad pairs are beginning to turn
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