Press review - page 38
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Currency Trade Ideas in a Manic US Stock Market Environment
- Long term stock market channels and US Treasury Bond pattern
- New Zealand Dollar crosses may reverse
- USDMXN responds to support
30 Yr. US Treasury Bond Future Continuous Contract (Dec)Daily
-The 30 Yr. US Treasury Bond future traded above the 7/22 high today and into the day of the July high.
-Price is at resistance but so is the specter of a head and shoulders bottom. Friday’s weak US session urges caution but 131 20/32 (Wednesday low) is the pivot. A push through 135 14/32 would open up a run towards measured levels of 139 14/32 and 140 20/32. These levels coincide with important highs in June.
-Bigger picture, price has responded to the October low and the mentioned measured levels are in line with major support/resistance levels (see below chart).
30 Yr. US Treasury Bond Future Continuous Contract (Dec)
Weekly
Nasdaq Composite and S&P 500 Index
Weekly
-The Nasdaq and S&P 500 are pushing into channel resistance that originates at the 2009 lows.
-The dashed lines are trendlines that connect the origin of a move and first meaningful reaction (defined as more than 6 months of weakness) within that move. The lines identified the final highs in 2007 although the S&P 500 did ‘ride’ the line higher for some time. The steep slopes of the current lines denote a manic market environment. A final ‘blowoff’ into these lines is possible.
-The Nasdaq composite would consist of 2 equal legs from the 2009 low at 3921. The S&P 500 would consist of 2 equal legs at 1179 (the first legs end at the May 2011 highs).
Trading Strategy: A possible outcome from a bond market breakout (not yet confirmed) and US equity indices at major resistance is a reversal from capital appreciation to capital preservation
September Jobs Report To Be Released Next Tuesday
With the federal government back up and running, the Labor Department has announced the rescheduled release dates for some key economic reports that were delayed by the shutdown.The Labor Department said the closely watched monthly jobs report for September will be released at 8:30 am ET on Tuesday, October 22nd. The report was originally scheduled for release on October 4th.
Jobs Report: Expect 200,000 Print As Unemployment Falls To 7.2% On Tuesday
Beyond putting the U.S. on the verge of default, the government shutdown clearly had an economic impact, shaving as much as 2% off annualized GDP growth. The debt ceiling showdown between President Obama and Speaker Boehner also forced federal statistics agencies to delay their relapse of important data, yet the Bureau of Labor Statistics is now ready to issue the September jobs report, scheduled for Tuesday 22, which should show non-farm payrolls expanding by 200,000, according to Barclays BCS -0.72%.
Markets were forced to fly blind over the past few weeks as the government shutdown deprived investors of crucial economic data. Arguably the most important data point, the jobs report, was never released on October 4, as Democrats and Republicans exchanged blows in Washington.
With the shutdown becoming a thing of the past, the Bureau of Labor Statistics released an updated schedule of its upcoming data reports. The September jobs number will be released on October 22, and it could come relatively strong. Despite the negative economic impact of the shutdown, and the hundreds of thousands of furloughed workers, Barclays estimates the economy added 200,000 jobs in September, with the unemployment rate falling one-tenth of a percentage point to 7.2%.
They point to falling jobless claims, which continue to trend lower. The economy did take a hit from the protracted shutdown, with Standard & Poor’s estimating it shaved 0.6 percentage points off annualized fourth quarter GDP growth, or about $24 billion which effectively was taken out of the economy. An index of sales managers is more extreme, noting U.S. GDP was cut by 2%. Major companies, from Boeing BA +0.19%, Lockheed Martin LMT -0.36%, and United Technologies, to Walmart and Costco acknowledged the effects, while the Fed’s beige book revealed business owners were unsettled by rising uncertainty.
A 200,000 print for nonfarm payrolls would suggest the labor market is increasingly resilient. That number would top both the September jobs report, where the economy added 169,000 jobs, and the September ADP report which came in at 166,000. It would also set the bar higher for the October jobs report, delayed one week to November 8, and would serve as further evidence for the Federal Reserve that the economy is improving, despite the self-inflicted pain caused by the shutdown.
Fundamental Forecast for Euro: Neutral
============
British Pound Looks Dangerously Overstretched - How do We Trade?
Fundamental Forecast for the British Pound: Neutral
============
Japanese Yen Strength to Be Undermined by Slowing Inflation
Fundamental Forecast for Japanese Yen: Neutral
============
Gold Eyes Monthly High Ahead of NFPs as Bearish Momentum Falters
Fundamental Forecast for Gold: Neutral
Method #1 – Adjust Risk-Reward Ratios to account for additional volatility
In The Number One Mistake that FX Traders Make, we saw the reason why so many traders fail. And these are generally the same things that are the culprit for trader failure in other markets as well. And that is the fact that traders lose so much more when they are wrong than they win when they are right.
Traders lose considerably more (in red) when they are wrong, than they win when they are right (blue) :
Method #2 – Back up the chart and look at the bigger picture
This method works with a similar theme from the earlier method, and that is that the more uncertainty that may be in a market, the more wild and volatile short-term price movements may become.
Scalpers may be challenged to see the same momentum or trends on shorter-term charts as catalysts and stimuli (the same themes bringing uncertainty in the market) may cause erratic price movements.
Traders can look to longer time frames to obviate volatile short-term uncertainty :
Method #3 – You don’t HAVE to trade if you feel uncertain
As a trader, you don’t ALWAYS have to be trading something :
Stocks: Nothing holding the market back
With the government shutdown and debt ceiling showdown in the rear view, investors can breathe a sigh of relief -- for now.They'll turn their attention back to the economy and earnings.
The September jobs report, delayed by the government shutdown, will finally be released Tuesday. The report was originally scheduled to come out on October 4. According to economists surveyed by Briefing.com, it is expected that 183,000 jobs were added last month and that unemployment rate remained steady, at 7.3%.
This report won't provide any clues as to the effects of the government shutdown. But weekly jobless claims reports have already shown that impact. Last week's report, which covered the first portion of the shutdown, revealed unemployment filings from about 70,000 federal workers. Many will be forced to pay the benefits they received back, as Congress has approved to retroactively pay federal workers.
Stocks may also set some more records. The major U.S. indexes are all up sharply this year and held up well despite fears of a possible debt default. The S&P 500 ended the week at an all-time high while the Dow is about 2% off its peak of 15,709.60 from last month. The tech-heavy Nasdaq was even above 3,900. It hasn't been that high since the dot-com bubble burst in 2000.
Last week, the Nasdaq gained 3%, including 1% growth on Friday. The S&P added 2% -- and posted only one losing day last week -- and the Dow was up about 1% on the week.
Chinese Cabinet Urges Implementation Of Policy Reforms To Boost Growth
The Chinese cabinet has urged the local governments and state departments to implement the planned economic reforms and restructuring measures to help the economy recover from the recent lull. In a statement released after a meeting called by Premier Li Keqiang on Friday, the cabinet, also known as the State Council, said that the foundation for China's economic rebound is not yet strong.
The Asian Development Bank expects growth to moderate to 7.6 percent in 2013 and to 7.4 percent in 2014. Meanwhile, the World Bank projects growth of 7.5 percent this year and 7.7 percent for 2014.
Forex News: Trading Tuesdays NFP Event
Talking Points
- NFP historically is one of the Forex Markets most volatile news events.
- Analysts expect NFP numbers to be reported at +180k.
- Last month’s event miss created a 105 pip decline on the EURUSD.
Forex traders have had to wait patiently for this month’s release of US employment data. Due to the government shutdown earlier in October, NFP (Non-Farm Payroll) figures for the month are set to be released this Tuesday at 8:30am ET. As one of the most anticipated releases on the US economic calendar, Non-Farm Payrolls also known as NFP has been historically known to produce high levels of volatility in the Forex market. The cause of this volatility has evolved from the NFP announcement becominga proxy into the health of the US economy. So based around the number of jobs being added or subtracted to the labor force, traders can look to establish new positions.First, NFP looks specifically at net changes in employment as jobs are created or subtracted in an economy in any given month. The term Non-Farm is used since farm / agricultural workers are not included in the employment count. The decision to not include agricultural jobs lies in these jobs being largely seasonal that could possibly produce small temporary shifts in labor reporting. Below we can see a composite of past NFP events from October 2011 through present. As you can see these numbers have been anything but consistent, causing problems for traders. So to get an idea of what to expect, let’s look at last month’s event in more detail.
Below we can see exactly what occurred with last month’s price action on a EURUSD 5 minute chart, during the NFP news release. NFP numbers were expected to be released at 180k, meaning analysts expected 180,000 new jobs to be added to the economy. However, at the time of release the NFP number was issued lower than expected at 169k. Traders were left to react to this lower number with the market immediately reacting by selling off the EURUSD. By 10:45am ET, the EURUSD had declined in value as much as 105 pips from the event high at 1.3214!
So what should traders look for this month, with NFP totals again being released tomorrow Tuesday the 21st? Expectations are set again at 180k new jobs to be created. Taking a cue from last month’s report, if expectations are missed or come out better than expected, this could again lead to another round of volatility in the EURUSD. Once a direction is established traders can then trade the news using the strategy of their choosing.
Regardless if you intend to trade the news or maybe just sit on the sidelines, remember NFP can be an exciting and will often bring unexpected volatility. If you do decide to trade, stick with your news trading plan and always keep an eye on risk / reward levels while minimizing the use of leverage.
Trading the News: U.S. Non-Farm Payrolls
U.S. Non-Farm Payrolls to Climb 180K, Unemployment Rate to Hold at 7.3%
Labor Force Participation Slipped to 63.2% from 63.4% in July (Lowest Since 1978)
Trading the News: U.S. Non-Farm Payrolls
With U.S. Non-Farm Payrolls expected to increase another 180K in September, a pickup in job growth may fuel a more meaningful rebound in the dollar as it highlights an improved outlook for the world’s largest economy.
What’s Expected:
Time of release: 10/22/2013 12:30 GMT, 8:30 EDT
Primary Pair Impact: EURUSD
Expected: 180K
Previous: 169K
Forecast: 160K to 200K
Why Is This Event Important:
Indeed, an upbeat employment report may heighten the appeal of the dollar as the Fed largely retains the taper timeline laid out by Chairman Ben Bernanke, but we may see the FOMC further delay its exit strategy should the data highlight a slowing recovery.
The resilience in private consumption along with the ongoing expansion in consumer credit may help to boost hiring, and a positive development may spark a bullish reaction in the dollar as it raises the outlook for growth.
Nevertheless, the persistent slack in the real economy may weigh on the labor market, and we may see the Fed carry its highly accommodative policy stance into the following year in an effort to encourage a stronger recovery.
How To Trade This Event Risk
Bullish USD Trade: NFPs Rise 180K or More; Unemployment Rate Holds Steady
- Need to see red, five-minute candle following the print to consider a short trade on EURUSD
- If market reaction favors a sell trade, short EURUSD with two separate position
- Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
- Shift stop to entry on remaining position once initial target is hit, set reasonable limit
Bearish USD Trade: Employment Report Misses Market ExpectationsPotential Price Targets For The Release
2013-10-22 12:30 GMT (or 14:30 MQ MT5 time) | [USD - Non-farm Payrolls]
if actual > forecast = good for currency (for USD in our case)
==========
September Nonfarm Payrolls Miss 148K vs Exp. 180K; Unemployment Rate Drops to 7.2%
September jobs are a disappointment at 148K vs expectations of 180K and private jobs only 126K well below the 180K expected, but August was revised higher this time, from 169K to 193K. Net for the two months, largely a wash.
The unemployment rate, at 7.2 percent, changed little in September but has declined by 0.4 percentage point since June. The number of unemployed persons, at 11.3 million, was also little changed over the month; however, unemployment has decreased by 522,000 since June.Among the major worker groups, the unemployment rates for adult men (7.1 percent), adult women (6.2 percent), teenagers (21.4 percent), whites (6.3 percent), blacks (12.9 percent), and Hispanics (9.0 percent) showed little or no change in September. The jobless rate for Asians was 5.3 percent (not seasonally adjusted), little changed from a year earlier.
In September, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 4.1 million. These individuals accounted for 36.9 percent of the unemployed. The number of long-term unemployed has declined by 725,000 over the past year.
Both the civilian labor force participation rate, at 63.2 percent, and the employment-population ratio at 58.6 percent, were unchanged in September. Over the year, the labor force participation rate has declined by 0.4 percentage point, while the employment- population ratio has changed little.
The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was unchanged at 7.9 million in September. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.
Total nonfarm payroll employment increased by 148,000 in September, with gains in construction, wholesale trade, and transportation and warehousing. *Over the prior 12 months, employment growth averaged 185,000 per month.