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  1. #1
    Administrator Martin Kay's Avatar

    Hot Tip from the Geek - SP500, EUR/USD, USD/JPY Monthly - 22-29/04/2013 !!!

    Hi guys,

    The New Top Five Tips of the week from Michael are here!
    This week we will see interesting macro news from US and Europe, which will direct the major markets moves. Check Michael tips and find out the best trades for the week!

    Originaly posted by Michael Hodges.

    S&P 500 Returns To Trend

    S&P 500
    Call/Put = Call
    Entry = Below 1555
    Expiration = End of the month

    All the negativity and selling in the S&P last week did not break the long term up trend. It did bring the index back down to trend or near enough. Taking the long term charts (weekly bars) by themselves I might turn a little bearish because my indicators are getting a little weak. The last few times this has happened 5-8 weeks of selling followed. If this were to happen I would expect the S&P to fall as far as 1500, maybe a little lower, before finding a bottom. I donít think that this set up is going to happen this week but it could in the near future. The index is at a very significant resistance level and potential turning point. For now I am still bullish in the nearer term.

    When I move down to my daily charts I see a market making what appears to be a normal return to trend. The first quarter was pretty strong, not booming but strong. The market trended up because joblessness came down significantly, housing improved steadily and so far we seem to have weathered the Fiscal Cliff and Sequester. Now that the index has returned to trend the data can begin to support the market again. This weeks data should support the same steady improvements going into the GDP report and this should lift the market to at least retest the highs around 1600. I am trading calls with end of the month expiration and entry below 1555.


    Euro Blowing Off Steam?

    EUR/USD
    Call/Put = Put
    Entry = Above 1.3000
    Expiration = End of the month

    The EUR/USD pair made a nice little blow-off top last week. This week started with the pair breaking the 30 day moving average. The topís close and the break below the moving are both below a Fibonacci retracement and bearish in my opinion. This trade could go as low as 1.2884 on a firm break below the moving average. I have also heard more chatter about a possible rate cut by the ECB, another source of concern for bulls in this trade. It is possible we could hear more about this week as well. Weak data in Europe and/or strong data in the U.S. will help this trade move down. I am trading puts with an entry above 1.3000 and an end of the month expiration.

    Yen Gets The Nod, Slide Slide Slide

    USD/JPY
    Calls/Puts = Calls
    Entry = Below 100
    Expiration = End of the month

    The G20 gave their approval to Japans monetary policy. This signals a go ahead of the aggressive easing policies that have been driving this trade. The BOJ is meeting again later this week and could make further moves to devalue the yen. The USD/JPY pair is bumping up against the resistance of 100 but is indicated higher with the support of policy and the international community. I am buying calls on the USD/JPY with an entry below 100 and an end of the month expiration. It is possible the trade will break out sooner than expected. If this is the case I will enter a half size position and then reevaluate for additional entry.

  2. #2
    Specialist Member LesterK's Avatar
    I like your tips except for the USD/JPY call because I think the 100 will be strong barrier ahead of the pair and will act as a resistance and also I don’t think Gold put will work too, because the price dropped too fast and the retracement is not finished yet.

  3. #3
    Legendry Member Michael Hodges's Avatar
    I think the retracement in gold won't overly affect the Goldcorp trade, the important thing for me here is the low low price of gold, much lower than last year and last quarter when Goldcorps revenue projections were made. However, as I write this response it occurred to me that GG is probably hedged against drops in gold like we saw last week. It is possible the company may profit after all... Any how, my TA told me to take a put so that is what I did.

    100 may prove to be resistance for the USD/JPY but I won't make that call until after tomorrow and the BOJ meeting. After the past weekends apparent approval of Japans devaluation plans there is no telling what kind of "aggressive" additions to fiscal policy we may see. Can't wait for tomorrow and Friday....BOJ meeting and U.S. 1st quarter GDP

  4. #4
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    Usd/jpy is moving surprisingly and sometimes against market flow. I am on hold and watching its movements. It is like up up up, 99.90 crossed...... down down down... . I am waiting for something strong enough to take it to 100.
    There r two main fundamental factors, on friday, to decide 100 level. BoJ's meeting and data of estimated U.S GDP for first quarter of 2013.
    We may see a 100 level this week. If not this week then most probably, not this month. But I am not in support of entering for either call or puts at this time. Probability of correct prediction is very low.

  5. #5
    Senior Member Deanfx's Avatar
    Quote Originally Posted by M.J View Post
    We may see a 100 level this week. If not this week then most probably, not this month. But I am not in support of entering for either call or puts at this time. Probability of correct prediction is very low.
    It is really difficult to give the exact prediction. There are forces on both side of the market and they could do anything. My view is that there will be final attempt to break 100, but if it is not successful we will see immediately selloff down to 98.50 level.

  6. #6
    M.J
    M.J is offline
    Veteran Member M.J's Avatar
    It has already gone blow 98.50 and now I am watching it at 98.55. There r two important events now. GDP prediction and BoJ's meeting. They r strong fundamentals but 1.5% movement is a lot to ask.

  7. #7
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by M.J View Post
    It has already gone blow 98.50 and now I am watching it at 98.55. There r two important events now. GDP prediction and BoJ's meeting. They r strong fundamentals but 1.5% movement is a lot to ask.
    JPY did not move as expected. perhaps though the trade is being set up for later. The boj's targets seem a little high and the market is skeptical, maybe the boj will have to make additional moves to reach their targets. Or the market is regrouping for another try.... or I am just plain wrong

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