Forex Market Madness – U.S Labor Force Declines

Well if trading through yesterday (with hopes of seeing much for profits) wasn’t “pain in the ass enough” – we’ve now got the “every so significant” U.S data out at 8:30 here Thursday morning.

Sure we saw the U.S Dollar “finally pop” late last night as expected, and yes the trades in EUR,GBP, as well CHF and even NZD all came away fine,but depending on exactly “when” you entered and what kind of position size you had in each – a little strength in AUD and you’d likely of just  broken even.

I jumped around like a mad man well into the night, grabbing a piddly 2% and frankly – am not impressed. The forex market is an absolute mess at the moment, with charts looking more like “abstract works of art” – from a classroom full of pre schoolers.

It’s an absolute mess out there, and I can’t really imagine this mornings ” artificial employment data” helping much. We get to hear “once again” some ridiculous number reflecting “improvement”…he.he..he… have you seen what’s happened to the participation rate? Now hovering around the lowest levels since 1978?

Have a look:

Labor Force Participation Rate_1

Labor Force Participation Rate_1

“Real employment” – sadly on a steady decline, as more and more people are simply “giving up” and not even bothering to “look” for a new job.

Labor Force Participation_0

Labor Force Participation_0

How is “this data” being incorporated into the weekly “employment figures” that are supposedly showing an improvement?

News flash – it’s not.

I’ve held a couple, and taken profits on a couple. I’ve re entered a couple and I’m in the red on a couple. The US Dollar most certainly “moved higher” so I hope you all caught some of that, with the biggest gains seen vs the Euro, Pound and Suisse, but in all – the cross winds across multiple currency pairs has chopped / flopped me around pretty good. I’ll see what comes of today, and will likely consider “closing up shop” early as…..staring at this for more that 18 hours in a row can be very hazardous to both your health, and you account!

5 Responses

  1. Farhan Nasir (@FaniNasir) January 30, 2014 / 7:19 am

    well you forgot to mention JPY as yesterday it moved higher but today all the action reversed and what’s with aussie i mean no news no nothing soft data coming out of china and still its the only currency in major section to move higher where as pound euro and NZ going down ,,

    • Forex Kong January 30, 2014 / 7:42 am

      Yes Farhan, it’s called “short term volatility” and we are certainly getting our fair share of it theses days.

      Another reason I encourage traders to take profits pretty much as fast as they see them, as just as likely the following morning – they’ll be gone.

      There is no room for passivity, complacency when trading this stuff. It’s a mine field out there each and every day, and if you want to pull profits and survive – you’ve really got to approach it with a “war like” mindset.

      You need to fight for every penny.

  2. Buena January 30, 2014 / 7:27 am

    I guess over some observation – when it comes to ‘rational truth’ in the markets… it’s always open to being thrown out of the window and the quote ‘the market can be irrational more than you can stay solvent’ makes its name. We know the economic numbers are BS when there’s millions on food stamps and inequality gap is expanding – but of course market doesn’t care. Until the headline numbers and news anchors report it in some ‘Oh-my-god-the-economy-just-shit-itself-‘ way.. market won’t care 😛

    • Forex Kong January 30, 2014 / 7:38 am

      Well said Buena – exactly.

      “Especially” these days. Looking to “make sense of it all” takes a back seat to just trading it the most effectively you can. I post these charts / draw attention to these things not so much for those day to day traders, but more so for those who might be sitting at home watching their T’V’s and actually “believing / buying” the hoopla about recovery. When you see charts like these, and account for the numbers it is absolutely IMPOSSIBLE to consider a “real recovery” currently under way in the U.S.

      As you’ve stated – the market doesn’t care.

  3. Deano January 30, 2014 / 11:00 pm

    Kong, pm Friday here and nothing much to report with the markets almost comatose. I think month end flows are dominant at present so next week should be clearer. Interesting that USD strength did not extend to the AUD or CAD overnight, merely suggesting a delay in further bearishness. Weak PPI data in Oz today has the AUD down 50 pips and any weakness in the CAD GDP tonight will be problematic and targeting 1.1620 the next major resistance line and the 200 monthly ema.

    Technically the DXY has now been range bound for 8 weeks so we need a new risk sentiment catalyst to change things. In the meantime I’ve set the s and r bounds for the majors and am trading these ranges, cheers.

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