8:30am (NY Time) US Core Retail Sales Forecast 0.2% Previous 0.3%
ACTION: USD/JPY BUY 0.8% SELL -0.3%
Since we have both retail sales coming out at 8:30am, we have to make sure there is no conflict with the numbers between the headline and core releases in order for us to get into a trade. Usually the Core Retail Sales is more accurate reflection of Retail sales because it excludes the Automotive components, which could be influenced by the recent cash for clunker program. US Core Retail Sales is the real focus of the economy which is a measure of consumer discretionary spending.
The headline Retail Sales is expected at 0.9% with previous release of 0.6%. We are not looking for a deviation in the headline release, but it does not hurt if both Core and Headline show surprises in the same direction, up or down.
DEFINITION
(Retail Sales Core)
Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.
[flv:http://www.newsprofiteer.com/081309-usretail/081309-usretail.mp4 480 360]
UPDATE: The Core Retail Sales came out at -0.6%, much worse than expectation as the entire market went into a risk aversion mode, we saw JPY strength across the board as GBP/JPY dropped over 200+ pips. By looking at market reaction and calculating both market cycle time and long term market trend, I decided to jump in the market and picked up about 30+ pips in 40 minutes of trading; it was quick, painless, and I have to admit it, impressive. Watch my video please….
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