Steve’s Trading Targets: March 2015
In accordance with my 80/20 rule of trading there are certain things I’m looking at right now that will move the markets. Remember, 80% of the time my trades revolve around technical analysis. The other 20% of the time I focus on news and data.
We are ending the attention on ‘growth’ – now it’s all about inflation
After the better than expected NFP (293K v 235K) this is now the fourth consecutive rise in the number of employed in the US. This is very good news for the US economy. Why then did the S&P and major world indices fall?
1. Strong economy means interest rates are more likely to rise more quickly
2. The majority of banks were ‘short’ into the figure
3. Fear and greed, profit-taking at the top of the range
In the majority of my webinars and live trades I try to instil how the markets like to exploit ‘what is known’. The market was expecting a good figure, we got a bumper figure so there was a high probability the majority of traders would go long the indices. When they did the markets aggressively sold off to exploit the fact: this was the most likely outcome and way to make money in overbought markets.
In the S&P we did rally towards the 50% Fibonacci on the 9th, giving the bulls an opportunity to get out of longs or to push to the highs, but this has subsequently been rejected. I don’t think this is the end of the bull market but we are clearly no longer looking at jobs and growth figures but rather focusing on inflation figures which all revolve around interest rates.
Not to say the NFP will not remain in focus but my targets now firmly rest on the US CPI and PPI releases and the FOMC meeting. We need to listen carefully to the tone of the language.
The key to this is to look at the fundamental events that traders will use to form these calls.
Key data: I target the current best opportunities
- 10 March: Carney BoE speech
- 12 March: US retail sales
- 17 March: BOJ press conference (overnight)
- 17 March: German ZEW
- 18 March: BoE rate vote 0/9 hike 0/9 cut 9/9 hold
- 19 March: ECB LTRO
- 24 March: US CPI
- 27 March: US Q4 GDP
- 1 April: US ISM
Key levels: technical
|Break (up)||Bounce (down)||Break||Bounce|
My sentiment and trading target philosophy
The overall direction of the markets right now is not crucial to my trading or making money. I look for short-term trades in order to capitalise on market movements and volatility. I can enter a trade several times with the same view.
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Chief Market Strategist
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