Hi Folks.
A quick word before we begin. As you might have noticed, or at least heard, many of the major Indexes are in the process of a sell-off, with the S&P currently sitting 1246 points below its all time high set in early December of last year. There isn't quite panic in the streets yet, but the mainstream media is doing their level best to churn people up to that point. Several of you have written to me in the last week asking how best to approach trading when we are facing times of great uncertainty, and my answer is simple: We trade. We are not investors, we are traders and as long as price is going up and down, we are still buying and selling. However, if you are trading something that is experiencing a lot of current volatility, maybe focus more on selling than buying since those trades seem to have the most momentum behind them. And be wary of trying to buy against the trend. Yes, you can catch some very nice trades that earn a ton of pips/points, but you can also get chopped into itty bitty trader pieces when the market sell trend is a strong one (like now). So exercise some caution, always use common sense, and don't let the media convince you we are standing on some sort of precipice that will lead to our immortal and irreversible doom. These things (market selloffs) happen every now and then and we always emerge stronger at the end. So just keep trading and focusing on the things that matter.
Okay, pep talk over. On with the forecast.
SUNDAY: Two reports: Japanese Average Cash Earnings at 7:30 p.m. and Australian ANZ Job Advertisements m/m at 9:30 p.m. Neither do anything of note to price action so both can be safely ignored.
MONDAY: Asian/London Session: 13 reports, all yellow folder, all deserving of yellow folder status, and not a single one likely to move price around. I can't even find one, morning or evening, that even MIGHT move price around. Just a terrible news day from start to finish.
USA Session: And the fun isn't just limited to the rest of the world. Today we get some Fed Speak (Kugler) at 10:30 a.m. giving a speech at Harvard via remote hookup, and Consumer Credit m/m at 3:00 p.m. Even with audience questions expected at the Harvard shindig, neither of these events are likely to do diddily. So today is a great day to not trade the news.
TUESDAY: Asian/London Session: Groundhog Day (the movie, not the weather prognosticator) again, with a bunch of yellow folders, although not as many as yesterday. HOWEVER, at 10:00 the CAD gets the Ivey PMI number to drop. I have long said the CAD is susceptible to big moves on lesser news, and this is one of those times. In the last 3 months the USDCAD has moved 85, 30 and 40 pips, respectively, when the Ivey drops at 10:00. So if you are having trouble finding something to trade that you can put at least a little trust into, here is a great time to test drive the CAD. Then, at 10:00 p.m. the NZD drops their Cash Rate (Interest rate) decision. The Kiwis have steadily cut their rate the last several months, and that has generated 20-25 pips of movement post drop. So unlike almost every other NZD number, this one shows at least a little life and might be worth following if you are trading while I am asleep.
USA Session: More of the same for the US of A as well. NFIB Small Business Index drops at 6 a.m. and the rule still applies that says if a country's number drops while the country is still asleep, that shows no respect to the number and it can be safely ignored. Then we have more Fed Speak (Daly) at 2 p.m. and the American Petroleum Institute's Weekly Statistical Bulletin at 4:30 p.m. This is the first time I can recall seeing this report on the FF calendar, and it drops at 4:30 p.m. when the oil market has closed, so not much we can do about it anyway, so pass.
WEDNESDAY: Asian/London Session: Another blah news day pretty much across the board. A couple of Japanese reports drop at 1 and 2 a.m., but nothing worth mentioning. Then we get a bunch of "tentative" calendar entries from the UK which involve their Brit Fed meeting on March 20 where they voted to leave their interest rate at 4.50%. These are reports, not numbers, so there is no way to gauge the impact they will have, and being tentative we don't even know when exactly to expect them. Just be aware they are out there if you are trading any GBP this morning. And the same goes for JPY traders as Ueda from the Bank of Japan is also set to speak at "tentative" so once again a grenade could be thrown into the JPY charts at any time...or nothing at all will happen. We won't know until it happens. Or doesn't. The evening numbers are few and meaningless.
USA Session: Another snooze-fest. Final Wholesale Inventories at 10:00 which has never moved prices a tick for as long as I have been watching this number, which is into double-digit years now. Crude Oil at 10:30, Fed Speak (Barkin) at 11:00, a 10 year Bond Auction at 1:01 and the Fed Meeting Minutes from the last meeting where they too voted to leave rates as is will drop at 2:00 p.m. Again, the minutes are not a number, but depending on the content can cause prices to move some should the contents reflect the general consensus amongst the voting members is too dovish or too bearish for traders tastes. Again, we won't know it until it happens, but be aware it's out there even though we can't do much with it.
THURSDAY: Asian/London Session: This may well be the shortest, non-holiday related, listing of non-USA session numbers I've seen in a while. The only real number in the morning is the Italian Industrial Production number at 4:00 a.m., and it won't create any sort of stir. A "tentative" Spanish Bond Auction number (pass) and the head of the Royal Bank of Australia gives a dinner speech at 6:00 a.m. FF gives it a red folder but it's a speech, so there isn't anything it can do for us except screw up otherwise perfectly good trades. 8:30 brings CAD Building Permits (one of those CAD numbers that typically doesn't move the CAD much at all), Brit Fed Speak at 9:00, Swiss Fed Speak at 12 noon, and a pair of evening numbers out of New Zealand and Japan that can be safely ignored.
USA Session: Finally. Something to trade. 8:30 CPI plus Unemployment Claims. Forget Unemployment. It could come out at zero or 1,000,00 and it won't matter. All eyes are on CPI. Then followed by a bunch of Fed Speak: 9:30-Logan; 10:00 Bowman; 12:00 Goolsbee and Harker (two different locations) with NatGas at 10:30 and the 30 year Bond Auction at 1:01 p.m. None of the rest of it matters. CPI is all you need to focus on today.
FRIDAY: Asian/London Session: Much like yesterday's CPI in the USA session, today is all about the GBP's GDP number at 2:00 a.m., right before market open (which is the exception to the rule about numbers coming out while a country sleeps...the Brits do this regularly with the GDP and usually get two reactions: one during after market trading and again when the market opens an hour later. So this is all that matters this morning (the rest of the morning has a Swiss Consumer Climate number at 3:00 and a couple of tentative or "all day" entries). So it's all about GBP GDP this morning.
USA Session: Yesterday was CPI so today means...if you guessed PPI you are correct. The slightly less ugly stepsister to CPI (Retail Sales gets the Ugly title) drops at 8:30 but whenever it follows CPI like it does today the impact tends to be muted. But, we are living in strange times with the markets getting overly anxious about selling off, so who knows on this one. A bad number may be all the excuse investors need to keep bailing on their S&P and Dow holdings. But more than likely, the damage (or repair) will all be done yesterday with the CPI. After that we get the University of Michigan (UofM) Preliminary Consumer Sentiment and Inflation Expectations numbers. Since they follow the PPI from earlier, I wouldn't expect a lot from either of these. But as noted a couple of times, if the sell-off continues to the end of this week, it may not matter to traders. They will use any excuse you give them to keep dumping their stocks. We close out with Fed Speak at 10:00 (Musalem) and 11:00 (Williams).
This should be an interesting week regardless of the lousy news lineup. So in the immortal words of Sergeant Phil Esterhaus, let's be careful out there.
See you back here next week.
Jeff
