Kruger Insights Friday – January 10, 2014 by FirstMacro

BinaryOptionsNow | Published on January 10, 2014 at 12:54 pm

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By: Joel Kruger

Even If I Had It.. – A good deal of volatility is expected today with the release of the highly anticipated monthly employment report out of the US. The trouble is, it has become increasingly difficult to project how the market will react even with the knowledge of the result. If you told me right now, ahead of the release, what the result would be, it would give me no added confidence to make a directional call. I can honestly say that at this point, no matter what the result, I would be able to make a solid argument for a move in either direction. The US Dollar could go up on a good print because the data is positive and this would mean the Fed would be more prepared to taper further. The US Dollar could also go down on a good print because market conditions are improving and the economy is stabilizing which should translate into a more stable global economy and incentivize investment into higher yielding currencies. Similarly, US equities could rally on a good print because the economy is improving and Fed policy is still expected to remain ultra accommodative for some time to come, even if there is some insignificant tapering going on. But US equities could also sell off hard on a good number because market participants start to look further ahead and realize that if equities are truly forward looking, then it might be worth booking profits on the anticipated Fed shift.

kruger insights december 10, 2014

Trade The Reaction – So I stand here today telling you all that from my perspective, the compelling trade set-ups won’t come from the immediate reaction post data, but only once (and if) markets make some initial wild moves. I believe the good opportunities will present if we get some violent swings in one direction or another. When you get into a situation like today where it is difficult to say what the market would do even if you had the knowledge of the release ahead of time, it reflects a high level of uncertainty. As such, any hyperextended moves post release, should present fantastic counter-trend set-ups on the rationale that a compelling argument could just as easily be made for a move in the opposite direction. Over the medium-term, my bias is long US Dollar and short US equities, so for me, I would really get excited with a market reaction that produced a sharp sell-off in the US Dollar and surge in US equities. But the point of all this is that you should worry less about trading the news, and focus more on the opportunities that could arise from the post-news reaction. If you would like me to get more specific with my recommendation for trading post event risk, I would say look for two things and then trade in the opposite direction. 1) Look for the market to be highly overextended on an hourly chart. 2) Look for the market’s average daily range to have already been exceeded. If these two criteria are met before 11am NY time, I believe you could get a really nice counter-trend trade. If at the close of Friday trade nothing has happened, walk away and look forward to new opportunities in the week ahead. Have a good one!

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