Friday September 1, 2006 - 10:38:07 GMT
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Black Swan Capital - www.blackswantrading.com
â€˘ Key Reports (WSJ):
8:30a.m. August Non-farm Payrolls. Previous: +113K.
8:30a.m. August Unemployment Rate. Previous. 4.8%.
9:40a.m. August ECRI Inflation Gauge.Previous: 124.0.
9:45a.m August University Of Michigan Consumer Sentiment Index. Previous: 84.7.
10:00a.m. August ISM Mfg Index. Previous: 54.7.
10:00a.m. July Construction Spending.Previous: +0.4%.
10:00am July Pending Home Sales.Previous: +0.4%.
â€śIn reality, the market puts us in a contest with ourselves. Until we let go of the false ideas of what makes the market tick and simply respond as the market unfolds, we will continue to be punished.â€ť
FX Trading â€“ Sideways
Well, itâ€™s supposed to be easy. If itâ€™s going up, buy. If itâ€™s going down, sell. The problem is it seems to be going sideways. And unless a trader is very fast, an actively traded sideways market isnâ€™t a pleasant experience, assuming you wish is to maintain at least a few digits in your trading account.
Letâ€™s look at something that is supposed to work, and use today as a real-time experiment. First the setup condition:
Yesterday, it seemed euro bulls got what they wanted. European Central Bank (ECB) President Jean-Claude Trichet seemed appropriately hawkish, using the term â€śvigilance.â€ť The usual score of bank analysts chimed in after Mr. T spoke to tell us, â€śyes indeed, the ECB will hike next time and will most likely hike another time before the year is through.â€ť
All this was seemly good news for euro bulls. But, the euro decided not to play along with the seeming good news, and ended lower on the day.
Back to our real-time experiment of what is supposed to work. If you agree that yesterdayâ€™s price action in EURUSD represented poor price action relative to the news, then it means we should be selling it today.
Thatâ€™s it, itâ€™s that simple. No mumbo-jumbo technical analysis. No long winded fundamental spiel about interest rate differentials, GDP, or jobs. Weâ€™re just keeping it simple.
Today is jobs Friday in the US; a good test for our simple solution to a sideways market.
Jack Crooks, Black Swan Capital Black Swan Subscription-based Service
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