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  1. #1
    Administrator Martin Kay's Avatar

    New Tips by Richard - Euro Posts Gains on the Year 1/7/-1/14/2013 !!!

    Hi guys,
    This week Richard's trading briefing has some very interesting insides on the market correlations and also on the upcoming equity quarterly reports. Check it out and see which are his best trading ideas!

    Originally posted by R.Cox. For the full trading breifing click here.

    Correlation Breakdown in Stocks and the US Dollar

    One of the most striking market events this week was the breakdown in the traditional correlation that is seen between stock markets and the US Dollar. Equities typically fall into the “risk” markets category while the US Dollar is a safe haven asset, bought up when uncertainty is the prevailing theme. Because of this, these two assets perform well in opposing environments. This week, however, both assets rallied and in order to decipher the reasons for this, we must look at all three of the main market drivers as the mostly positive economic data and the Fiscal Cliff resolution brought a sigh of relief to equity investors while the stimulus program comments from the Federal Reserve had the reverse effect. Looking ahead, attention will start to focus on the next round of corporate earnings. The first major companies to report will be Alcoa, which will be reporting on Tuesday and Wells Fargo which will come on Friday.


    My Trading recommendations in 50 words

    1. This week we will look at two stock picks, with corporate earnings season likely to be the next main driver of market sentiment. Tuesday’s Alcoa report is expected to show a quarterly profit of 7 cents per share and with the company’s history of beating analyst estimates, I will enter into weekly Alcoa (AA) CALLS in the 9$ region.

    2. The other main story will be Wells Fargo, which has an attractive P/E below 11 and has yet to retest its yearly highs at 36$. I will be looking to enter into weekly calls in Wells Fargo (WFC) near 34$, as a new yearly high could be breached if earnings come in strongly.

  2. #2
    Legendry Member willyw's Avatar

    EUR/USD weekly analysis !!!

    EUR/USD WEEKLY as of Monday, 07 January, 2013
    Euro Dollar / US Dollar appears to be locked in a trading range bounded by upside resistance and downside support. The most recently confirmed upside resistance level for Euro Dollar / US Dollar is around 1.49. Expect prices to have some difficulty rising above this level. A break above this level (particularly on heavy volume) would be a bullish sign. The most recently confirmed downside support level for Euro Dollar / US Dollar is around 1.21. Expect prices to have some difficulty falling below this level. A break below this level (particularly on heavy volume) would be a bearish sign.
    Euro Dollar / US Dollar appears to be locked in a triangle formation bounded by a down trendline and an up trendline. The most recently confirmed down trendline for Euro Dollar / US Dollar has an ending point currently at 1.47. Expect prices to have some difficulty rising above this trendline. A break above this trendline (particularly on heavy volume) would be a bullish sign. The most recently confirmed up trendline for Euro Dollar / US Dollar has an ending point currently at 1.21. Expect prices to have some difficulty falling below this trendline. A break below this trendline (particularly on heavy volume) would be a bearish sign.
    Attached Thumbnails Attached Thumbnails eur-w.jpg  

  3. #3
    Veteran Member uj.forex's Avatar
    absolutely... it's because it's ALL about the U.S economy as a whole along with the assets, currency, and stocks.... it brought back the confidence to certain extent and this is the reason why the U.S dollar gained massively against Pound and Euro, both of them fell down to more than 300 points in 3 days time....

    Still, Euro and Pound are in the bearish zone, where Euro must close ABOVE 1.3148 and pound 1.6190 in order to bring them back in the bullish trend.... Dollar is still strong...

  4. #4
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by uj.forex View Post
    absolutely... it's because it's ALL about the U.S economy as a whole along with the assets, currency, and stocks.... it brought back the confidence to certain extent and this is the reason why the U.S dollar gained massively against Pound and Euro, both of them fell down to more than 300 points in 3 days time....

    Still, Euro and Pound are in the bearish zone, where Euro must close ABOVE 1.3148 and pound 1.6190 in order to bring them back in the bullish trend.... Dollar is still strong...
    The Euro sell off last week was a knee jerk reaction to a statement made about what they might do in the future, like 10 or 12 months from now. The underlying fundamentals of teh Eur/USD are still intact and that leads me to a more bullish , at least this week, stance. I am trading calls on the Euro this week and this month because the 1.3000 1.3050 range looks really inviting.

  5. #5
    Legendry Member willyw's Avatar
    Quote Originally Posted by Michael Hodges View Post
    The Euro sell off last week was a knee jerk reaction to a statement made about what they might do in the future, like 10 or 12 months from now. The underlying fundamentals of teh Eur/USD are still intact and that leads me to a more bullish , at least this week, stance. I am trading calls on the Euro this week and this month because the 1.3000 1.3050 range looks really inviting.
    EUR/USD DAILY as of Wednesday, 09 January, 2013
    Euro Dollar / US Dollar broke below the up trendline at 1.30, 3 days ago. This is a bearish sign. This up trendline, currently with an ending point at 1.31, may now provide upside resistance. If you decide to trade Euro Dollar / US Dollar, you may want to place a stop loss just above the up trendline, in case the breakout is premature. Prices having only declined 0.44% since the breakout, the validity of the breakout is questionable.

  6. #6
    Solid Member
    I totally agree with you willyw that there are some bearish signs here and I am also short EUR/USD. This Thursday there will be EU interest rate announcement, which if negative change will affect strongly the euro sentiment. We are still very bullish on yen, stocks and AUD, but they also are close to strong resistance and everything could happen in the next few weeks.

  7. #7
    Master Member vinayakm's Avatar
    Great job on predicting Alcoa! I think you should be right on WFC as well. This is a much anticipated round of corporate earnings what with budget talks coming up in a bit.

  8. #8
    Specialist Member RCox's Avatar
    The results in Alcoa were positive for the stock and for markets as a whole. The next major test will be Wells Fargo and since this is a very different industry type, a positive number will likely lift many stocks higher into the close of the week.

  9. #9
    Legendry Member willyw's Avatar
    Quote Originally Posted by willyw View Post
    EUR/USD DAILY as of Wednesday, 09 January, 2013
    Euro Dollar / US Dollar broke below the up trendline at 1.30, 3 days ago. This is a bearish sign. This up trendline, currently with an ending point at 1.31, may now provide upside resistance. If you decide to trade Euro Dollar / US Dollar, you may want to place a stop loss just above the up trendline, in case the breakout is premature. Prices having only declined 0.44% since the breakout, the validity of the breakout is questionable.
    EUR/USD DAILY as of Thursday, 10 January, 2013
    On 09/01/13, Euro Dollar / US Dollar closed above the lower Bollinger Band by 9.2%. Bollinger Bands are 41.81% narrower than normal. The narrow width of the Bollinger Bands suggests low volatility as compared to Euro Dollar / US Dollar's normal range. Therefore, the probability of volatility increasing with a sharp price move has increased for the near-term. The Bollinger Bands have been in this narrow range for 1 period(s). The probability of a significant price move increases the longer the Bollinger Bands remain in this narrow range.
    lliott Waves High Volatility has detected a possible point 4 of a WolfWave (21%) pattern for Euro Dollar / US Dollar. This pattern is an expanding triangle and trades from the next point. When the peak or trough will form, usually after crossing or touching the extended line of points 1 and 3, the price will move in the opposite direction towards the target line formed by the extension of points 2 and 4.
    The present wave patterns are:
    fast amplitude (8%): bearish wave 4
    moderate amplitude (13%): bullish wave 2
    Euro Dollar / US Dollar is long term Bullish as the 144 days moving average of 1.29 is increasing. The Relative Strength Index is at 45.63 in the neutral territory. The Relative Momentum Index is at 50.30 in the neutral territory. An important indicator for Elliott waves, the Elliott oscillator is at 0.00, in positive territory; this is a bullish sign. An equally important indicator, the STORSI is at 28.23. This value is in the oversold territory.
    Elliott Waves High Volatility has detected an Isolated High at 1.31 one bar ago
    Attached Thumbnails Attached Thumbnails eur-d.jpg   eur-wave-d.jpg  

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