U.s NFP later today

[bbmac]

ForexCrunch.com 's further NFP trading tips are as under:

1.New traders – stay away: Trading during this volatile period is very risky. Take a break and enjoy the weekend.

2.Action before the release: Strange moves begin in the markets well before the release at 13:30 GMT. This usually reflects the expectations – expectations which aren’t necessarily met, and they can lead to a counter reaction afterwards. Jittery trading intensifies with the release of the Canadian employment figures, an hour and a half before the American ones.

3.Friday effect: Strong moves in a certain direction – either dollar strength or dollar weakness, can be seen hours after the release, usually in the last hour of the London session – between 16:00 to 17:00 GMT. This is the move that will determine the close of the week, and thus have a real long term effect. This is the full reaction.

4.Technical barriers can be broken – support and resistance lines, uptrend support or downtrend resistance lines can be breached around the release of the NFP. This is usually only temporary – the graph returns to normal after a while, and these lines are respected again.

5.Initial reaction is wrong: the initial reaction to the release is in the wrong direction: the knee jerk reaction is usually “normal”: good data yields dollar strength and bad data yields dollar weakness. This is very temporary! We are still in the global crisis, and the risk factor rules. So, minutes after the “normal” reaction, the risk factor kicks in and eventually the opposite happens: good data yields dollar weakness (risk appetite), while bad data yields dollar strength (risk aversion.)

G/L

 

[arabianights]

I'm gonna cum in my pants, that is for sure

 

[bbmac]

Re: U.s NFP

http://community.nasdaq.com/News/2011-03/nonfarm-payrolls-preview-what-to-expect.aspx?storyid=60399

 

[Pazienza]

There's some interesting points there. Personally, I don't find NFP to be problematic, but I suppose that comes down to patience, good signals, and fairly tight trade management.

ForexCrunch.com 's further NFP trading tips are as under:

1.New traders – stay away: Trading during this volatile period is very risky. Take a break and enjoy the weekend.

2.Action before the release: Strange moves begin in the markets well before the release at 13:30 GMT. This usually reflects the expectations – expectations which aren’t necessarily met, and they can lead to a counter reaction afterwards. Jittery trading intensifies with the release of the Canadian employment figures, an hour and a half before the American ones.

3.Friday effect: Strong moves in a certain direction – either dollar strength or dollar weakness, can be seen hours after the release, usually in the last hour of the London session – between 16:00 to 17:00 GMT. This is the move that will determine the close of the week, and thus have a real long term effect. This is the full reaction.

4.Technical barriers can be broken – support and resistance lines, uptrend support or downtrend resistance lines can be breached around the release of the NFP. This is usually only temporary – the graph returns to normal after a while, and these lines are respected again.

5.Initial reaction is wrong: the initial reaction to the release is in the wrong direction: the knee jerk reaction is usually “normal”: good data yields dollar strength and bad data yields dollar weakness. This is very temporary! We are still in the global crisis, and the risk factor rules. So, minutes after the “normal” reaction, the risk factor kicks in and eventually the opposite happens: good data yields dollar weakness (risk appetite), while bad data yields dollar strength (risk aversion.)

G/L

 

[bbmac]

excited yet ?

http://forexblog.oanda.com/20110304/nfp-can-only-be-strong-if-not-then/

Commentators are generally talking up a big headline number Lol...haven't we been here before !?

Doesn't matter what it is really - just follow the money if it makes it's mind up where it is going !

G/L

 

[bbmac]

Re: U.s NFP - muted knee-jerk reaction-market undecided yet ??

Strong number prints on the headline +198k, private sector jobs too @ +222k, upward revision to January's +36k to +63k and un-emp drops to 8.9%...market maybe rather surprising unsure at first then a Breakout on cable as it's 1340pm candle closed as a bearish thrust giving a shortside trigger but with the previous 1hr swing lo zone around today's current lo (6234) r:r doesn't look good so stayed flat...but then a Reversal set-up at that potential support zone around today's lo...and a decent master thrust engulfinmg candle trigger closes to join the buyers at today's current lo...

The 5min thrust b/o is here but not good pot r:r ro pot supp zone around today's current lo

Then @ zone around today's current lo, an opportunity to join the residual demand around there

This long set-up is where being a tech trader has to over-rule any thoughts of fundies, ie these numbers should be good for $ so £ should drop shouldn't it ? Or is it a risk question, ie strong U.s economy giving more confidence to buy riskier assets ? Whatever the case there was a tech set-up, It met my criteria and I took it with +11 pips in the bag...I'll leave it to others smarter than me to work the fundie question out.

How did anyone else fare ?

G/L

 

[wackypete2]

Didn't hit my criteria so no trade for me. I like to see an initial pop of 30+ pips then about 40% retrace within the 1st minute. We barely had 30 pips movement by then end of the 2nd minute and no retrace until the 4th minute. Trading is done with an EA assist to open/close trades and provide the levels.

 

[bbmac]

April Fools ?

So. Tomorrow it's that NFP thing again and the big question is wether last month's good number (and related components) were a 'flash in the pan' after 2 or 3 disappointing months - ie were they the norm or is the striong jobs growth a feature of the \u.s recovery now?

Consensus forcasts are around the +180k to +200k for the headline number, against last month's +192k. A good +150k + headline number with an upward revision to last month's, with a decrease or same 9.9% un-emp rate could see some knee-jerk $ strength. Conversely a sub +60k headline number with no change or downward revision to last month's headline number, particularly with an upward move in the un-emp rate could see some knee-jerk $ weakness.

The above might be the 2 favoured scenarios in respect of a potential market reaction but any numbers in the mid range could see some mixed reaction. Of course the components can also affect the market reaction (changes to private payrolls, and to a lesser extent manufacturing payrolls.)

My tactical approach to the event risk is to be flat going into the release and look for hi-probability set-ups in the immediate post data release market reaction +. These may be based on any momentum created in the immediate post data release period -and/or- failing a hi-probability momentum based set-up, the 'classic' data react tactic of Sell the 1st Hi/Buy the first pullback -or conversely- Buy the1st lo/Sell the 1st pullback. As always if no hi-probability set-up (s) develop I will stay flat.

I would point out that trading the reaction to data/news (given the provisos outlined above) is distinct from what many traders call 'trading the news.' For me, I see this data like any other, and indeed any other time in the market, ie I will trade only if a hi-probability set-up (s) develop in the period of high volatility that can follow such a release.

Whatever your tactical or strategic approach to this event risk is;

G/L

 

[wackypete2]

Re: April Fools ?

I would point out that trading the reaction to data/news (given the provisos outlined above) is distinct from what many traders call 'trading the news.' For me, I see this data like any other, and indeed any other time in the market, ie I will trade only if a hi-probability set-up (s) develop in the period of high volatility that can follow such a release.

Good point and I'm in agreement. I have no problem just sitting it out if I don't see what I want.

Peter

 

[bbmac]

Chatter

Quite a lot of pre-nfp chatter that the number is going to disappoint ? If so could see $ coming under pressure in the immediate knee-jerk period ?

Could be a buy the rumour-sell the fact?

We'll know at 1330pm Uk.

G/L

 

[TheBramble]

It's tough to find and data that disappoints at the moment. Even the most 'disappointing' data seems to wash through the markets without leaving any permanent record of its passage.

Dunno about buy the rumour - sell the fact, my money is on continuing to buy as long as the Fed is...but when the rug gets pulled....

 

[bbmac]

reply

It's tough to find and data that disappoints at the moment. Even the most 'disappointing' data seems to wash through the markets without leaving any permanent record of its passage.

Dunno about buy the rumour - sell the fact, my money is on continuing to buy as long as the Fed is...but when the rug gets pulled....

agree with your general point,...and yeh when the rug gets pulled (mixed messages on that one so far,) well then lets see who is left standing without help Lol!

 

[bbmac]

Re Gbpusd

Getting excited yet ?

Gbpusd the pairing I will be focusing on re NFP.

Contained so far between yesterday's pullback Hi at the previous 1hr swing lo zone(now a previous swing hi zone too) and this morning's lo at 6008..the near-term current screenshot re potential supp/res factors is as below.

So far today price has travelled 52% of it's 20day average range and this week so far 68% of it's 20week average.

Per tactical approach discussed in post #108...let's see what develops.

G/L

 

[wackypete2]

the NFP moves just aren't what they used to be.

Peter

 

[rc450]

the NFP moves just aren't what they used to be.

Peter

true, once upon a time it was a buckle up your nappy occasion.

 

[Black Swan]

the NFP moves just aren't what they used to be.

Peter

all your NFP moves are belong to us...

 

[bbmac]

What happened next ?

So. ......
My tactical approach to the event risk is to be flat going into the release and look for hi-probability set-ups in the immediate post data release market reaction +. These may be based on any momentum created in the immediate post data release period -and/or- ..... the 'classic' data react tactic of Sell the 1st Hi/Buy the first pullback -or conversely- Buy the1st lo/Sell the 1st pullback. As always if no hi-probability set-up (s) develop I will stay flat.

Took a risk on the momentum play as trigger candle wasn't perfect with that wick on it although a B/o nonetheless on the immediate knee-jerk data react and with a headline no of +216k above last mth and forecasts and upward revisons to Jan/Feb and drop in un-emp rate to 8.8% it seemed hi in probability...

Then came the Buy the 1st Lo an as price dropped to dail;y S1 it coincided with 76.4% 5935-6150 (current weekly lo-hi) and this at the top os a previous 1hr/4hr swing lo zone (previous support = potential support), so a nice set-up here on 1min but not supported by 5min, only 3min so not perfect...used less risk therefore.

The poential support zone is here although daily S1 and the 76.4% 5935-6150 is not shown.

I then missed the Sell the 1st Pullback as was diverted elsewhere...a hidden divergence based 1min re-entry (to 5min downtrend after pullback) set-up...Oh well you can't get them all....doesn't look as though it went very far anyway.

Nice weather here in C.London-gonna enjoy rest of the afternoon outside, and next week (Tuesday) I'm off to Middle East (the safe part - I hope [UAE]) so ...Roll one next one !

G/L

 

[bbmac]

the NFP moves just aren't what they used to be.

Peter

Yeh 300 pip moves back in the day not 10 here and 10 there, Oh those were the days, barmy summer afternoons, jumpers for goalposts.....

G/L

 

[bbmac]

Market reaction to NFP

Just using Gbpusd as the example ....and looking at both the knee-jerk and longer market reaction to NFP..the consensus was that the numbers were good (Headline # up, Prive payrolls good, upward revisions to prev months and drop in un-emp rate.) Market had been pretty rangy ahead of it, then The knee-jerk reaction to it was per conventional wisdowm, ie $ was favoured/ £ sold...it pulled back and then sold off again to a new lo at point X, but at that point the buyers came in a sharp upside move occurred...so what happened here ?

Well from a technical point of view there were more buyers/buying volume than sellers/selling volume - hence prices rose...but from a fundamental point of view - was this a risk reaction, ie the market taking confidence from a strengthening U.s economy that has seen employment lag some other indicators, and therefore being prepared to buy some other 'riskier' assets ?

I wonder how many tech traders were reasonably expecting the buying at point X to be a pullback and got caught by the strength of the move up ? This is where the technicals and fundamentals line blurs I guess. [ I wasn't around for point X so had no decisoons to make. ]

G/L

 

[bbmac]

Re: U.s NFP today

So Wednesday's ADP forecast and the general pre release optimistic sentiment/rumours re the release were badly misplaced as U.s adds only +18k jobs in June and revises down last month's +54k additions to +24k, this and a rise in the un-emp rate to 9.2%.

Market reacted accordingly selling $, Gbpusd 5min gave the first real signal on this pairing on close of the 5min immediate data react candle as below.

A few short stops taken in the run up doubtless.

G/L