The bulls remained so this week. We saw them support their rankings contrary to a widening trade equilibrium and a so-so Beige Book since they obviously were listening very carefully to four Fed Govs say they were not familiar with the overall state of inflation. Then came the strong retail sales report; we saw that the EUR signature the 2480 region and GBP hit 8530, before some intermediary profit taking. Total the powerful sales report was originally worth around 70 pips at the EURO and around 80 pips to the GBP. We also saw the exact same thing happen on the market off the retail report we saw last week from the NFP, a mis-read from the market followed by a right reading and following reaction.

The FF calender does not give the entire picture of what occurred with all the retail sales report. While I love the effort to post an excellent calender with outcomes, a further reading is necessary.

Http://bloomberg.com/apps/news?pid=2...c6Usrefer=home

The biggest decline in gas-station receipts driven entire retail sales down 0.4 percent in September, the Commerce Department said in Washington. Excluding service channels, purchases climbed 0.6 percent, three times the gain in August. The University of Michigan's consumer sentiment index jumped to 92.3 in October from 85.4 the prior month.

Next week using all the PPI and CPI numbers being released, we've got the potential to see some wild reactions, however what's the market likely to react to the numbers? It doesn't require an advanced economic level to figure out that higher prices at the producer and consumer rates will lead to further gains in the $, but what do you think may happen if the PPI or CPI come out revealing either a slowing in the rate of growth, a level response or possibly a decrease in prices? I'm not sure the answer is really obvious.

While the Fed's number one concern is that the rate of inflation, there are 2 factors that affect it-price increases and growth increases. Take a look at what lower gas prices have done-produced a big jump in retail sales, a rise in growth. Note that the market has remained $ bullish at the face of DECREASING energy prices, due to the GROWTH in sales at the retail level.

So let us say we see some kind of decrease in the PPI and CPI. Might that not have impliions at the rate of total growth and may perhaps not the market interpet this as $ too? A slowing in the rate of growth or decrease in prices could have the effect of additional curricular consumer and business confidence and spending. Consumers certainly are paying more now that energy prices have gone down.

Also important next week will be further announcements from the Fed, as well as the TIC information, but I feel the most important report of the week could very well be the NAHB housing index, since Bernanke is depending on the continued slowing in the housing market to control the rate of increase in the economy.

Now for a trading tip. If you have a look at what occurred following the NFP and Retail Sales reports, we saw the market react wrong initially then correct itself after further analysis of the numbers. How can we profit in a market like this? Well, the simple fact of the matter is that if you were listening to plain older Bloomberg TV or radio, then you would have had sufficient time to hear the numbers and listen to their own analysis of what it all meant, with lots of time to get in the market and make a nice profit. The Euro was still around 2540 2 minutes following the numbers have been released before finally dropping all the way down to 2480 roughly. Bloomberg had this item fully analyzed in. I'm not saying this is going to work every time, but when you're not utilizing this valuable free resource, you're not investing to your full advantage, particularly when multiple reports have been released at the exact same time.