Written by dustin pass
Thursday, October 14th, 2010
TRADE CALL RECAPS
For our last live trade calls, we were looking at the Canadian and US Trade Balance reports this morning. For these reports, we recommended only trading the Canadian Trade Balance report, and for that report we were looking to sell the EURCAD and USDCAD if the number came out at least $1.5 Billion better than expected. The actual number came only $0.88 Billion better than expected, so it did not meet our safe sell trigger. The US Trade Balance also did not meet our safe triggers.
OUR NEXT LIVE ON THE NEWS TRADE CALLS
Our next live trade opportunities come tomorrow when both the US Retail Sales and US CPI reports are released at 8:30 am EDT (12:30 pm GMT). Our main focus will be on the US Retail Sales report as that typically meets our triggers more often and there is more of a reaction to that data. For the US Retail Sales report, our focus will be on the Retail Sales Less Autos number, which is expected to be 0.5%. We will trade the EURJPY currency pair as it typically provides a better move on this data and we will look for a buy on the EURJPY if the number comes out better than expected.
We will most likely prefer a buy trigger on this report as better than anticipated data could help the stock market. I anticipate a 30-50 pip spike either way, but it may just be a temporary move if we get a sell trigger. We will want to use some caution on this trade tomorrow as there are several other pieces of US data coming out at the same time that could affect the market.
The US Retail Sales report has met our safe trigger seven times in the last year, and the EURJPY moved 30 to 85 pips each time. This report last met our safe trigger in June and we had traders report profits of up to 48 pips on the trade. Below is a chart showing the movement of the EURJPY at the time of June’s release:
The video of June’s trade is below:
httpv://www.youtube.com/watch?v=0ZH3Wzxudp4
The other data coming out at this time that we will focus on will be the US CPI data. For this data, the focus will be on the Core CPI number and the currency pair you should trade is the EURJPY as it typically moves much better than the GBPUSD. A higher than expected number will be good for the USD and signal a long on the EURJPY, and a lower than expected number will be bad for the USD and signal a short on the EURJPY.
We will likely prefer a buy on this particular trade as the EURJPY is currently in an uptrend. We would typically anticipate a 20-40 pip move if this meets the raised safe trigger; however, this trade as it hasn’t moved as much recently. Also, with all of the other US data coming out at the same time, if you decide to trade this particular release you should raise your safe triggers to at least 0.2% if not higher. It would be best to just use this release as a confirmation for the Retail Sales data if that trade should trigger.
This report has met our raised safe trigger two times in the last year, and the EURJPY moved 20 to 40 pips each time. This report last met our safe trigger in February and we had traders report profits of up to 10 pips on the trade. Below is a chart showing the movement of the EURJPY at the time of February’s release:
The video of February’s trade is below:
httpv://www.youtube.com/watch?v=8JQl8ffdx6U
This is our current outlook for these trades; however, it is subject to change as market conditions may change by tomorrow. Be sure to log in to the Profit Center (live trade room) 15 minutes prior to the releases to get my commentary on these potential trades.
Good Luck!!!!
HOW TO TRADE THE FREE CALLS
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