Weekly Wrap-Up and Look AheadBrian Kahn - Friday, August 31st, 2012
As I warned, whether the Fed does something or doesn't do anything, it is bullish. The markets got back most of what they lost yesterday and the Fed is still in play. I wonder how long they can stay in play. Oh yeah, forever! On a side note (because who really uses an economic calendar anyway), CHIPM came in as expected although the business barometer was says we are well below where we thought we would be and the next few months don't show much chance of improvement. Again, this type of language keeps the Fed in play.
Next up is the ECB on Monday (holiday in the USD and CAD). Then AUD gets in the mix with interest rate and employment numbers. ISM Manufacturing in the US and European bond auctions. Thursday will be a blast with ECB and BOE reporting interest rates and ISM Services as well as claims. Finally, Friday has USD and CAD employment.
So you tell me: are you ready to trade this? Most of this is "announcements" versus data, so I am going to stick with the "caution mode" and unless I see something super, super juicy line up in my forex day trading scope, I am going to error on the side of caution.
In equities, our tight range gets tighter. 1400 is support and 1425 is resistance. I don't think shorting at the lows is a good idea (see anyone who was short yesterday near the close). I do think caution is warranted, but that is through the correct strategy at the correct time.
Bottom line, trading plans are essential with PRE-defined risk to reward and a plan to manage the trade from beginning to end per your trade time horizon.
Happy Trading and Be Environmentally Cool
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
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Educational purposes only - no buy, hold or sell recommendations.
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