There you have it. For all the posturing, for all the upbeat talk and boisterous statements about recession being over by FED chairman and others, rude awakening today on the job front. Wall Street economists, people who do these kind of analyses for a living and are expected to be correct every now and than, missed it again. They expected about 180,000 jobs to be lost and were proven wrong when it was announced that in reality 263,000 people were laid off, which puts the official unemployment rate at 9.8%. Now the economists tracked by media expect this figure to climb above 10%. It will be interesting to see just how large the margin of error is going to be.

Official statistics do not include people who settled for part time jobs, nor those who gave up looking for work. If those individuals were taken under consideration, unemployment rate could be as high as 17%. That, of course, is speculative and hard to prove, but has a measure of truth to it. Even the Labor Department estimates over 15 million people are out of work and economy lost well above 7 million jobs since recession started. That much for the  “recession is over“ talk.

When it comes to currencies, we are once again “concerned with risk”, following run up in Yen and USD. This has changed within last hour, and both JPY and the Dollar are loosing ground right now. I guess that all of a sudden everybody developed appetite for risk and acted on this urge. Funny. Well, me too. I took some risks in EUR-JPY pair, just in the opposite direction. Plan was to go long at 132.09, even though pair wanted to go down first. Problem was, that the potential was limited by stiff support nearby. In the end, I sold it on the move down out of congestion zone.

In all honesty, this was not the smartest of trades. First logical stop is above this wide congestion band, making risks much bigger than any predictable rewards, as far as chart reading goes. The way price behaved, however, favored probabilities for a swing down first, so I decided to go for small objective trade. In the end, entry was at 130.54 and I covered it at 130.00 for 54 pips gain. Buy order above 132 is still valid, for the time being. If market builds resistance on the 130.50 line, as it appears to start doing, I’ll move the order down. After the weekend.

Mentioned at the end of last post is my AUD-NZD trade from the Japanese Yen in the news update earlier on this week. I closed it. Exit  happened to be at 1.2215, short of the original objective. Trade was hatched because this cross started to move in bigger swings, relative to most recent price action. Once the order was filled, however, progress slowed down again. It is common for this pair to remain in a non-trending mode for some time and I didn’t want to get stuck here for unnecessarily long stretch. That’s why the exit with +42 pips. And no, I didn’t foresee the collapse that followed. Glad I closed it, though.

Mike K.