Headlines, Tweets, and More Headlines
Joe Perry September 27, 2019 1:31 PM
Markets have been paying attention to these one-liners
This has been a tough week to trade, no doubt. Whether it be headlines from our friends the “sources” or a tweet from the President that there is a “witch hunt” against him, the markets have been paying attention to these one-liners and moving significantly on them.
The latest headline is that the white house is weighing limits on US Portfolio inflows to China. USD/JPY was up nearly 35 pips from the London open right before the headline came across the wires, as can be seen on the 1 minute chart below. After the release of the headline, the pair gave back all those gains. Anyone who had bought the London open was flat or negative after the headline.
Source: Tradingview, FOREX.com
On Tuesday, “sources” revealed that US House Speaker Nancy Pelosi was going to announce an Impeachment Inquiry into President Trump. SPX500 sold off roughly 18 handles on the headline, as can be seen on the 15-minute chart below. However, the market halted its decent when Trump retaliated with a tweet in which he said he would release the transcripts of the phone call between him and President Zelensky of Ukraine. (No real surprise the market stopped near 2980. There was horizontal support at that level going back a week). 1 hour later, a headline came across that Nancy Pelosi was going to continue with the Impeachment Inquiry and have a press conference at 5:00pm. Stocks sold off another 20 handles. Anyone who bought the support level previously was flat after the “sources” statement, and anyone who bought the support level after the Trumps tweet, was out of the money very quickly after Pelosi’s announcement about the 5:00pm press conference.
Source: Tradingview, FOREX.com
These are just a few examples of the headlines that were thrown at us this week. How can one trade this market and not get burned? Two words: TIGHT STOPS. If headlines continue to come at us like this, one could enter the market and immediately place a tight stop, in order to avoid volatility from headline shocks. If you enter a position and the market moves in your direction, one may want to consider moving the stop closer to the current price or use a trailing stop. This will ensure locking in profits, or at the very least, reducing loses.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.