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  1. #1
    Administrator Martin Kay's Avatar

    Tip From the Geek- US Elections are here: SPX, FTSE, USD/JPY. One Month Expiry. !!!

    Hey guys, a bit late but here it is - the geek's trading tips for this week.

    Originally posted by Michael Hodges. Click here for all trading tips.

    The US elections are dominating the world markets. Asia, Europe and our markets are holding their breaths awaiting the outcome of the Obama/Romney battle. Not to mention the impending change of leadership in China. The two, potentially major, shifts in world leadership could have long lasting repercussions on the world economy. There is a lot of talk about which American candidate is better for stocks, Romney or Obama. The talk is that Romney and the republicans will be better for business and stocks.
    1. Stocks or bonds; Romney or Obama


    SPX
    Call/Put = Call
    Entry = 1400-1420
    Expiration = End of the month

    The SPX needs to hold above 1400 for me to remain bullish/neutral on it. A break below could spell disaster for a bullish trade and my stance will need to be reevaluated. I still think the fourth quarter is surprise everyone, there is just to much data supporting steadiness. The economy is not growing rapidly but is is still growing some and the fourth quarter will be a improvement over the last. I will be looking to get into this trade Wednesday or later.

    2. Europe holds breath awaiting US elections


    FTSE
    Call/Put = Call
    Entry = 5800-5900
    Expiration = End of the month

    This trade will hinge on the outcome of the election as well. My thoughts are that things will keep going as they have been. The FTSE has been trending sideways for several weeks now and seems to have formed a support line around 5800. If the index remains above I will look to get into this trade Wednesday or later, once the US elections are over. Eurozone headlines are moot to me at this point.


    3.Yen Losing Ground To The Dollar


    USD/JPY
    Call/Put = Call
    Entry = 80-80.25
    Expiration = End Of The Month

    The Japanese yen is losing ground to the dollar and that is not tied to the election. The Bank of Japan re-stimulated the Japanese economy a few weeks ago and there is talk of them doing it again. As long as Japan is printing money the yen will lose to the dollar.

  2. #2
    Specialist Member RCox's Avatar
    Quote Originally Posted by Martin Kay View Post
    [COLOR=#000000][FONT=verdana]Hey guys, a bit late but here it is - the geek's trading tips for this week.
    The S&P 500 has built a short term base in the 1390 area and I do think that we will see some upside once the election has finished - no matter which side is the winner. I am basing this mostly on the assumption that an element of uncertainty will be removed from the market and there will be a renewed focus on what to do next with the economy. We might see some declines into 1400 before the results are in, so this will be an opportunity for daily CALLS. I prefer to keep the timeframes shorter here because my longer term outlook is bearish.

    The FTSE is pressuring hourly resistance at the moment, not bad for hourly PUTS, but any upside break here will likely lead to a test of the 5900 area. This is a much better entry zone for weekly or monthly PUTS as downside risk far outweighs upside potential at this stage.

    I have been bullish on the USD/JPY all year as I continue to see value in the carry trade but at this stage, I prefer to wait for a pullback into the 79.40 area before putting on new CALLS. Time frames can be almost any length for this pair but this week should see prices supported and I will likely not get a chance to get back in at the 79.40 level.

  3. #3
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    It is hard to tell about SPX..
    FTSE, is upward and I agree with u that it will, most probably, continue its upward trend. Technical indicators r also in favor of upward trend.
    USD is steady and during or after elections, no sign of "surprise". Technical indicators show that JPY will continue to loose its worth against USD.

  4. #4
    Senior Member Grae's Avatar
    I have bulling outlook on the S&P too. I also see the bullish trend appearing on Gold. Short or long term? I think Short. Apple is bearish for me in the short term though I haven't traded it. And yes, USDJPY is bullish on the 1 day time frame.

  5. #5
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by M.J View Post
    It is hard to tell about SPX..
    FTSE, is upward and I agree with u that it will, most probably, continue its upward trend. Technical indicators r also in favor of upward trend.
    USD is steady and during or after elections, no sign of "surprise". Technical indicators show that JPY will continue to loose its worth against USD.
    Japan is still struggling with a stagnant economy.... there is a lot of talk of more stimulus already, the last round was only a few weeks ago. So long as Japan is stimulating and printing money the Yen will lost to the dollar and other world currencies.

  6. #6
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by RCox View Post
    The S&P 500 has built a short term base in the 1390 area and I do think that we will see some upside once the election has finished - no matter which side is the winner. I am basing this mostly on the assumption that an element of uncertainty will be removed from the market and there will be a renewed focus on what to do next with the economy. We might see some declines into 1400 before the results are in, so this will be an opportunity for daily CALLS. I prefer to keep the timeframes shorter here because my longer term outlook is bearish.

    The FTSE is pressuring hourly resistance at the moment, not bad for hourly PUTS, but any upside break here will likely lead to a test of the 5900 area. This is a much better entry zone for weekly or monthly PUTS as downside risk far outweighs upside potential at this stage.

    I have been bullish on the USD/JPY all year as I continue to see value in the carry trade but at this stage, I prefer to wait for a pullback into the 79.40 area before putting on new CALLS. Time frames can be almost any length for this pair but this week should see prices supported and I will likely not get a chance to get back in at the 79.40 level.
    The SPX is tricky, longer term I am what I call pre-bearish. I think a top is near but until actual signs I'm still trading bullish as I tend to take my signals from charts of weekly and daily data. There are several support factors in play in the 1380-1420 zone; I think that 1400 has become the significant line though. Retracements of the 2008 bear market, long term moving averages and several trendlines are coincident with the zone. As for the long run there is resistance at 1465, 1500 and 1565...

    On another note thanks for turning me on to the yen trade. I started trading it a few weeks ago.

    T

  7. #7
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by Grae View Post
    I have bulling outlook on the S&P too. I also see the bullish trend appearing on Gold. Short or long term? I think Short. Apple is bearish for me in the short term though I haven't traded it. And yes, USDJPY is bullish on the 1 day time frame.
    I see gold as more of a trading range. It is kinda of in the middle of it now but looks like it is prime for an upleg. Japanese stimulus will help here as well.

  8. #8
    Senior Member Grae's Avatar
    The DOW is quite bearish, hitting the support level 12890. -2% decline.

  9. #9
    Master Member vinayakm's Avatar
    Quote Originally Posted by Grae View Post
    The DOW is quite bearish, hitting the support level 12890. -2% decline.
    It appears that everything has been bearish lately. I was quite surprised in the fall of the SPX which I was quite certain would go up with the election done with.
    I guess Romney might have been better for stocks after all, but these are still early days. As the uncertainty has gone away and businesses and individuals come to grips with reality and what to expect, the markets should reflect a positive sentiment. After all, Obama in his first term had got the stock market to high levels not seen since World War II.

  10. #10
    Senior Member Grae's Avatar
    Hey, Dow is still a PUT for me on the daily time frame. Is anyone catching EurJPY and GBPJPY which are bearish or are we all looking at USDJPY?

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