Economic Data Calls for May 1, 2019

Weekly Calendar Calls

Here’s what we are looking for in tomorrow’s economic reports (May 1, 2019) — Good Luck Trading!

1. AU PMI Manufacturing (18:30 ET) Bearish AUD -- Risk of downside surprise given weakness in Chinese data and RBA dovishness

2. NZ Q1 Unemployment (18:45 ET) Bearish NZD -- Risk of weakness given drop in employment component of PMI, RBNZ dovishness & lower Manpower index

3. UK PMI Manufacturing (04:30 ET) Bearish GBP -- Risk to downside given drop in CBI orders

4. ISM Manufacturing (10:00 ET) Bearish USD -- Likely to be weaker given softer Chicago and Philadelphia Fed surveys

5. FOMC Rate Decision (14:00 ET) No Trade -- Biggest event risk of the day. Fed could be less pessimistic but rate decisions are best traded reactively

Economic Data Calls for April 1, 2019

Weekly Calendar Calls

Here’s what we are looking for in tomorrow’s economic reports (April 1, 2019) — Good Luck Trading!

1. AU PMI Mfg (05:30 ET) No Trade -- Likely to be weaker but manufacturing PMI is always difficult to predict

2. German & EZ Manufacturing (04:30 ET) No Trade -- Revisions are hard to predict but changes are market moving

3. UK PMI Manufacturing (04:30 ET) Bearish GBP -- Potential downside surprise given very weak CBI

4. EZ CPI and Unemployment Rate (05:00 ET) Bearish EUR -- Potential downside risk given lower German CPI

5. US Retail Sales (08:30 ET) Bullish USD -- Potential upside surprise give stronger wage growth and gas prices

6. ISM Manufacturing (10:00 ET) Bullish USD -- Potential upside surprise as stronger Philly Fed offsets weaker Empire State

Economic Data Calls for March 1, 2019

Weekly Calendar Calls

Here’s what we are looking for in tomorrow’s economic reports (March 1, 2019) — Good Luck Trading!

1. AU PMI Mfg (16:30 ET) No Trade -- Manufacturing PMI is difficult to predict but can be market moving

2. NZ Building Permits & Terms of Trade (16:45 ET) Bullish NZD -- Potential upside surprise as trade balance improved in Q4

3. GE Unemployment (03:55 ET) Bearish EUR -- Potential downside surprise as job growth eased in manufacturing and services

4. UK PMI Mfg (04:30 ET) Bullish GBP -- Potential upside surprise given rise in CBI index

5. EZ CPI (05:00 ET) Bullish EUR -- Potential upside surprise given rise in German CPI index

6. US Personal Income and Spending (08:30 ET) Bearish USD -- Potential weakness given weak average hourly earnings and retail sales

7. CAD GDP (08:30 ET) Bearish CAD -- Potential weakness given significant deterioration in trade and retail sales

8. US ISM manufacturing (10:00 ET) No Trade -- Tough call this month as stronger Empire state is offset by drop in Philly Fed index

Economic Data Calls for Feb 1, 2019

Weekly Calendar Calls

Here’s what we are looking for in tomorrow’s economic reports (Feb 1, 2019) — Good Luck Trading!

1. AU PMI Manufacturing and PPI (16:30 ET and 23:30 ET) Bearish EUR -- Potential for upside surprise given slightly stronger CPI

2. EZ PMI Manufacturing Revisions (04:00 NY Time) No Trade -- Revisions are difficult to predict but can be market moving

3. UK PMI Manufacturing (04:30 NY Time) Bearish GBP -- Potential for downside surprise given drop in CBI total orders index

4. EZ CPI (05:00 NY Time) Bearish EUR -- Potential for downside surprise given lower German CPI

5. US Non-Farm Payrolls (08:30 NY Time) No Trade -- NFPs are highly volatile and best traded reactively

6. US ISM Manufacturing (10:00 NY Time) Bearish USD -- Potential downside surprise after sharp drop in Chicago PMI and Empire Surveys

*Good morning/afternoon everyone!* The U.S. dollar is trading lower against most of the major currencies this morning as risk appetite improves after yesterday’s brutal selling. Stock futures are up, helping to bolster pairs like EUR/USD and USD/JPY. However as we begin the NY session, the decline in Treasury yields could also tip the scale and push USD/JPY lower. Yen crosses on the other hand will take their cue from stocks today. The currency most vulnerable to weakness is the Canadian dollar because oil prices are down more than 2% after President Trump tweeted that he hopes Saudi Arabia and OPEC will not cut oil production because he thinks oil prices should be much lower based on supply. Despite a softer Eurozone ZEW survey, EUR/USD is trading above 1.1250 on the hope that progress could be made on the Italian budget front. the expectations component of the ZEW surely also increased. The best performing currency this morning is sterling which is up on higher wages (despite a higher unemployment rate) and continued Brexit optimism. On the Brexit front, we are getting closer to a deal but with some counterproductive headlines, traders are still reluctant to overload sterling positions but when an announcement is made, we can almost be assured that there will be a strong followup rally. AUD and NZD are also up from yesterday but having risen strongly in Asian trade, they are mostly consolidating and even weakening slightly. We also have our eyes on the Swiss Franc which appears to be topping below 1.0130. *The MAIN THEMES I see today are* +EUR +CHF -CAD -JPY *Trading Biases* +EUR, +CHF, +GBP, -CAD, -JPY mildly +AUD, +NZD, -USD *Today’s Initial Trades* Here’s the summary – 1. Buy EURCAD at 1.4885, Stop at 1.4857, Target 1.4912 2. Buy EURUSD at 1.1247, Stop at 1.1219, Target 1.1275 3. Buy AUDCAD at .9531, Stop at .9503, target .9559 4. Sell AUDCHF at .7270, Stop at .7298, Target .7242

Swing

*Good morning/afternoon everyone!*

The U.S. dollar is trading lower against most of the major currencies this morning as risk appetite improves after yesterday’s brutal selling. Stock futures are up, helping to bolster pairs like EUR/USD and USD/JPY. However as we begin the NY session, the decline in Treasury yields could also tip the scale and push USD/JPY lower. Yen crosses on the other hand will take their cue from stocks today. The currency most vulnerable to weakness is the Canadian dollar because oil prices are down more than 2% after President Trump tweeted that he hopes Saudi Arabia and OPEC will not cut oil production because he thinks oil prices should be much lower based on supply. Despite a softer Eurozone ZEW survey, EUR/USD is trading above 1.1250 on the hope that progress could be made on the Italian budget front. the expectations component of the ZEW surely also increased. The best performing currency this morning is sterling which is up on higher wages (despite a higher unemployment rate) and continued Brexit optimism. On the Brexit front, we are getting closer to a deal but with some counterproductive headlines, traders are still reluctant to overload sterling positions but when an announcement is made, we can almost be assured that there will be a strong followup rally. AUD and NZD are also up from yesterday but having risen strongly in Asian trade, they are mostly consolidating and even weakening slightly. We also have our eyes on the Swiss Franc which appears to be topping below 1.0130.

*The MAIN THEMES I see today are*

+EUR
+CHF
-CAD
-JPY

*Trading Biases*

+EUR, +CHF, +GBP,
-CAD, -JPY
mildly +AUD, +NZD, -USD

*Today’s Initial Trades*

Here’s the summary --

1. Buy EURCAD at 1.4885, Stop at 1.4857, Target 1.4912
2. Buy EURUSD at 1.1247, Stop at 1.1219, Target 1.1275
3. Buy AUDCAD at .9531, Stop at .9503, target .9559
4. Sell AUDCHF at .7270, Stop at .7298, Target .7242

Your 1 Pip Fortune

Boris Schlossberg

There are only a few things that I fairly confident about and the idea that the next 20 years will be terrible for long term investors is one of them. Over the past three decades investors have enjoyed unparalleled good luck as declining bond rates, rapidly improving technology and a massive fresh, new pool of savings from one billion Chinese consumers made investing in equities a very lucrative proposition.

Stocks have compounded by almost 8% annually for the past 30 years and all you had to do was drop money every single year into an index fund and you were guaranteed to be rich (or at least much wealthier than when you started). We are now living in the golden age of the index investing with more than 3 Trillion dollars allocated to that instrument. But I have news for you, whenever 3 Trillion dollars is allocated to anything in the financial markets it’s almost certainly a sucker bet, because contrary to the Wall Street propaganda markets are much more like a zero sum game than you think. Here is paper from McKinsey that provides the intellectual foundation for my skepticism about the future of investing but you don’t even have to read it. Just look at the table below that shows 70 plus years during the last century when equities produced “bupkas” as we say in New York.

screenshot-2016-12-02-14-32-05

So don’t bet on buy and hold, because it most likely will not work.

Which bring me to active trading. Now I am first to admit that I am talking my book here. I love daytrading and would probably do it even if I could make more money as an investor. Guilty as charged. I believe that day trading is a superior way to make money not only because it is far less volatile, but also because it is an absolute return game and does not depend on the upward drift of the market in order to make you money.

But it is, by no means easy.

I remember a few years ago I horrified a member of my chat room when I told him that the only way to make 100 pips by day trading is to do 100 trades. He was aghast that it would take so much work to achieve such a paltry profit.

The other day, I suddenly remembered that conversation during our daily webinar and decided to look at my personal trading account which I have banged around for more than 1600 trades over the past year. True enough the average NET profit was 1.1 pips. Feel free to check it out here (just make sure to run the data up to November 7th, because my massive winning trade in USD/MXN wildly skews the average to the upside from the election onward).

When you think about it, my day trading results are not at all surprising when you put them into the contest of the real world. After all, consider toothpaste, gasoline, even running a restaurant. When the business person accounts for all the costs of the business what drops to the bottom line is just 3 cents on every dollar of revenue.

When you start thinking about day trading as a business rather than as lottery based amusement that’s when you get a much more accurate idea of not only how to succeed, but what to expect.

And that’s another reason to be grateful for day trading. When done right it provides us with a much more accurate view of the financial world.

Economic Data Calls for July 1, 2016

Weekly Calendar Calls

Here’s what we are looking for in tomorrow’s economic reports (July 1 2016) — Good Luck Trading!

1. AU PMI Manufacturing (19:30 NY Time) -- No Trade -- Australian PMI is hard to predict

2. Chinese PMI Manufacturing (21:00 NY Time) -- No Trade -- Chinese data is very market moving but hard to predict

3. EZ PMI Revisions (03:55 NY Time) -- No Trade -- Revisions to PMI can be very market moving but difficult to predict

4. UK PMI Manufacturing (04:30 NY Time) -- Bullish CAD -- Potential upside surprise give strong rise in CBI Index

5. US ISM Manufacturing (10:00 NY Time) -- Bullish USD -- Potential upside surprise give rise in Empire State, Chicago Fed and Philadelphia Fed survey

EUR/USD Should Fall to 1 Month Lows

EUR/USD Should Fall to 1 Month Lows

Chart Of The Day

EUR/USD Should Fall to 1 Month Lows

With the way things are going in Greece, the EUR/USD should not only fall to 1 month lows but even reach 1.08. By now it should surprise no one that at the time of publication we are STILL waiting on Greece. The deadline for the Greek Parliament’s vote on the reform proposals was supposed to be midnight and now there’s talk that it may not happen until tomorrow. We have long said that the risk of a no vote is a realistic one and even if they accept the proposals, it only allows new debt negotiations to begin. The debt negotiations could still turn sour especially after the IMF indicated that they cannot participate in a new bailout without debt relief for Greece – a point that the Germans have resisted aggressively. So the talks could break down again and for this reason we remain bearish euros. Tomorrow’s Eurozone trade and consumer price reports will take a backseat to the ECB meeting and Greek Parliament vote. If the Parliament votes yes, we expect EUR/USD to rally at which point we will sell into the rally looking for a pullback as the debt negotiations resume. With Europe still struggling to contain the Greek crisis, we expect cautious and dovish comments from the ECB.

Technically, there is near term support for EUR/USD at the July low of 1.0915 but the more significant support level is the May low of 1.0820. As long as the currency pair holds below the 50-da7 SMA at 1.1160 or 1.12, the downtrend remains intact.