[flv:http://www.newsprofiteer.com/101509-uscpi/101509-uscpi.mp4 480 360]
8:30am (NY Time) US Core CPI m/m Forecast 0.1% Previous 0.1%
ACTION: USD/JPY BUY 0.3% SELL -0.1%
We are going to look for a surprise factor of 0.2%; if the CPI number (core) increases to a release at 0.3% then we will BUY of USD/JPY. If the CPI number decreases to -0.1% or less, we’ll SELL USD/JPY. Historically even at a difference of 0.1%, market is likely to to exaggerate, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips.
Since US CPI is considered as global news event, an unexpected higher release will probably be considered as risk appetite whereas an unexpected lower release will probably be considered as risk aversion. Although I will use the USD/JPY pair a the gauge for risk sentiment, I might look to EUR/JPY to execute my trade. With recent market risk appetite sentiment, the best course of action on a slightly negative release is probably wait for the market to drop, then take a reversal, that way you will be going with the trend at a much better position.
DEFINITION:
“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households wikipedia).” It is also known as the “True Cost of Living”.
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{ 5 comments… read them below or add one }
Hi Henry,
Just a question in regards to a good broker, I am with “Interbank FX”.
Do you or anyone else know much about Interbank FX in regards to whether they are good or bad?
I would like to know if I’m with the right people?
My only gripe is that they or I suppose the market have been very good at finding my stop loss almost to the very pip at times. Any words or thoughts on brokers or recommendations?
Thanks Devin.
Devin:
Interbank and most other brokers are “decent”, and I use the word decent in the sense of a grade “C-” barely passing. Interbank provides what other brokers provide, but they have the new backoffice solution which supposedly works itself around the new FIFO rule from NFA, and for that, I will keep the account.
As far as stop hunting is concerned, I run several broker feeds and they usually are within pips of each other, so not much issue there. But then against IBFX is got 4~5 servers, so if you are on a different server, you might have different experience. So what I do is using mental stops.
Henry
Henry when you said to wait for the stock market to open what do you spect to see on the chart to give you a confirmation to jump in and in what direction thanks.
and thanks for your time you are great.
Eddie:
Usually you keep an eye on S&P or Dow Jones futures, and they are up, then possibly risk appetite, and if they are down the risk aversion. Of course they need to be up or down by a lot of point to trigger momentum in the market, so dont go selling when the future is down by 10 points. Also look at all 3 futures to be sure if all of them going same direction.
Henry
Hi Henry
Is there a chance that I can watch you trade the Core CPI live?
Thanks
Ian Grace