Trade Team Update

Fairly routine day in the market... the EUR/USD moved down this morning when the 10-year yield decided to get confident, but after it fell back to 3.90%, that in addition to gains in gold and oil helped keep the euro propped up most of the day...

There are a few happenings today worth noting: despite gold and oil hovering around all-time highs, the euro has been unable to sustain a break of the 4754 level. Now we did get robust factory order data today which certainly capped any big gains by the euro, but it will be interesting to see how strongly the euro wants to hang with gold and oil over the next two weeks...

Obviously, the big bank movers are waiting for tomorrow's NFP. Last month NFP was a yawner, but I am not expecting a repeat performance of last month... I anticipate the banks to throw some money around the market and I expect to see heightened volatility tomorrow.

And just a word on trading and calling NFP... a lot of traders who don't quite understand the market and how it moves believe it's as simple as saying, "I'm going euro long" or "I'm going euro short." Most months it's not that easy because of all the underlying variables happening within the market... at times, as you've seen us do in the past, it's been incredibly easy to make the call the day before and load up on the entries, but tomorrow is certainly not the case, as far as I can see at this point...

I will say that my overall bias for tomorrow's NFP is to be euro long and to stay euro long with my current positions... I did, however, pick up a euro short early this morning at 4764, which I'm holding at the present. I will hold this trade going into NFP unless the market moves against me at which time I'll have a limit order set to close the trade for +1. I'm long the euro all the way down to the 4540's, and again, will hold those longs going in to NFP.

Sometimes on NFP, things do not become clear until a few hours or even a few minutes before the release as the market and the banks show their hands through the price action...

If the truth is to be told tomorrow, my research is not showing robust employment numbers for the U.S. Granted, we had great Initial Claims data today, but this is not going to persuade me against my NFP research. And I still think ADP is meaningless and worthless.

PLEASE: do not trade NFP. If you're flat, stay flat. If you're euro long and have positive entries, set some limits to close for profits should the market drop, same with positive shorts you may have. But the smartest thing you can do for NFP is to get as flat as you can and to save your margin and your sanity by not trading NFP. I cannot stress this enough!

The other thing to remember with NFP, it's not always about the numbers... the big bank movers will be looking for certain things and the possibility for price swings certainly exist for tomorrow... plus, we have key unemployment data...