Originaly posted by RCox.
In the week ahead, we will not see much in the way of macro data (similar to next week) but we will see a large number of corporate earnings reports to help guide the next direction in stocks. A major focus will be on the financial sector, with several key names reporting their results. This will be a continuation of the Friday report seen from JP Morgan-Chase (the largest bank in the US), which beat fourth quarter estimates with profits of $6.5 billion on improved performances in both mortgage lending and investment banking. Next, investors will be watching CitiGroup and Charles Schwab on Monday, US Bancorp and Goldman Sachs on Tuesday, American Express Bank of America, and Bank of New York-Mellon on Wednesday, e-Trade, Capital One, and Morgan Stanley on Thursday.
With the central bank outlook supportive of carry trades in the currency markets, I am waiting for an area to get back into the USD/JPY after the massive rallies seen recently. I am not a breakout trader when looking at the longer term time horizons, so I will need to see a drift back to support turned resistance at 96.60 and then enter into weekly CALL options for the USD/JPY
The long term picture in Oil has turned negative, with historical and Fib support at 89.90 giving way last week. This area marks the 61.8% Fib retracement of the rally from 85.20, so now the target changes to expect a full retracement back toward that level in the medium term. 89.90 is now viewed as support turned resistance and I will use this area to enter into weekly PUT options in Oil
. If we see some positive earnings this week, we should get a spike into this area and trigger the trade.