US Jobless Report Halts Intraday Stock Market Rally

Fun and games in the energy market pushed shares up to the week’s highs. But a reminder that US citizens are still losing their jobs threw an unemployed spanner in the works.

The temptation was too great; I fought it and fought it, but eventually I had to sell a scrap of FTSE (^FTSE). I broke from my normal signal, using an RSI divergence/ trendline break instead of my usual MAV crossover. I sold at 4752 and with the market currently at 4730 I’ve covered my entry with a stop loss. I don’t think the froth is fully done yet so I’m just looking for a pre-holiday bonus rather than falling in love with the trade.

OK, it’s a day early, but I’m jumping in with an unofficial Trader Hindsight here. Check out the chart for GBPUSD:

Had I been systematically trading off my 5-minute chart I’d have made good money today. Instead, I made nothing because I decided against dealing. My mindset was that the rate was pushing up towards a possible breakout (see Nearly Time To Trade The Dollar?) and that I’d rather not bet against the ‘risk trade’ with equities breaking recent resistance levels.

Now I’m kicking myself; what a perfect set-up. Sterling spiked on better than expected retail sales, but life above $1.66 didn’t appeal. The price fell to, but rallied off its 21-period MAV at the first time of asking. My trigger would have been to sell after the second break of the line, at $1.6550 (10 pips below the MAV), with a stop loss at $1.6580.

Assuming a low-testosterone partial close at $1.6530 (I set T1 at +20-30 pips), bringing my stop down to break-even wouldn’t have jeopardized the trade. The price rallied off $1.65, but failed to break the 21-period MAV and after trailing in its slipstream dropped to $1.6450. The consistent fall would have been unlikely to trigger a trailing stop and I might just have called it a day when the price moved 10 pips above the MAV at $1.6487.

That’s trading; you win some, you lose some, you miss some.

Subscribe by RSS Subscribe by Email