June 3, 2011
All eyes on the Jobs Report as Traders Prepare for NonFarm Payrolls News
Traders are busy digesting some important news overnight while preparing for the major news event scheduled for today’s US session.
Last night we heard from many fed speakers about different topics, the most important being inflation…
Fed’s Fisher says “The Fed has done its Job, if the economy needs more stimulus money it is going to have to get if from somewhere else” he also said he believes the Fed ‘overdid it’ with ‘too much money in the marketplace’. These comments also come weeks after the EU raised rates and the US Fed also hinted towards the same this summer. This is likely to give traders a bearish tone on the dollar and a bullish tone to commodities as people will assumedly fear raising rates with will bring inflation to the forefront of our fears.
News this morning we have 830am NonFarm Payrolls and then 1000am ISM Non-Manufacturing. All eyes will be on the NFP Report at 830am, and we need to pay close attention to the personality of this news event.
In my experience with NonFarm Payrolls the market will either move too quickly to trade or it will slop sideways looking for direction and then breakout in one direction or the other. The key is not trying to beat this market when its really moving, and not to try and force trades if the market doesn’t react right away. There is a LOT of data in this report at 830am, so traders will take time to understand what its telling them, so give it time, and remember it is always ok to sit on the sidelines until you feel confident with the speed of the tape.
This morning’s price action we have a calm before the storm it seems in the markets we trade most. The dollar continues to inch lower inside a bear channel and the Gold and Crude are trading near their 89-range BMT’s. All of this tells us to expect something soon, but not yet.
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| Dollar Index |
Crude Oil is right in the middle of its price wedge and has a very clear sideways range. These major levels above and below us will be my entry points as well as stops and targets once we see where this news takes us this morning. Looking to buy the lows and sell the highs of the wedge and the range, looking for signs of a breakout and then buying pullbacks with new highs or selling retracements with new lows. We will be much more specific with this approach after 830am est.
| Crude Oil |
Gold is in a similar situation, off the highs of the wedge trading in the middle of the current sideways ways range. Some difference are that we recently broke the strong bull price channel, and the big difference is the BMT level is way down at 1504.5 which is a big price magnet. You would assume that with any push at all this market will want to tumble down to that 1500 area to the BMT and then down to the lows of the wedge. I will be using the highs and lows of these price ranges as my entries, stops and targets this morning and will nail down the specific locations after we see more from the news at 830am today.
| Gold |
