Hi guys,

The new Top Five Tips of the week from Michael are here!
As every first week of the month is starting with a lot of economic data releases, this week will be very interesting and with potentially dynamic and strong movements in all the markets around the globe. Check out the fresh new Michaelís Review and spot the best opportunities to trade, which will come this week!

Originaly posted by Michael Hodges.

S&P Still Trending UP

S&P 500
Call/Put= Call
Entry = Below 1630
Expiration = 1 month
The S&P is still trending up and looks like it has support at 1630. This level is coincident with the short term moving average and a support level set in the beginning of last month. Even if the index were to break below this level it has at least another 30-35 points to fall before coming close to breaking the long term trend. This week should prove to be a volatile one for the reasons I described above but I still donít see a top to the market. I donít mean to say that its not there, its not coming or itís not close just that I donít see it in the charts yet.

Data may not be as good as I think, it may bring the index down below 1630 for a few days or a week. This will be an entry point for me. The long term the trend is still up so I am buying the dips. The selling over the last two weeks is a cause for concern and reason to draw a resistance line but it that line is untested. I am trading calls this week on the S&P 500 with end of the month expiration and a target entry below 1630.


Euro Faces Technical Resistance

EUR/USD
Call/Put = Put
Entry = Above 1.2950
Expiration = 1 Week
The Euro is facing technical resistance versus the dollar around 1.3050 level. This level is an important Fibonacci level and one that has been significant more than 10 times over the last 12 months. This week the ECB is expected to announce no changes to policy, a move that shouldnít move the pair too much by itself. At the same time we are going to get a massive amount of EU data on ISM, spending and inflation. Unless Europe has turned an unforeseen economic corner I expect this data to be weak in relation to U.S. data and send the EUR/USD pair lower. I am trading puts on the EUR/USD with an one week expiration and a target entry above 1.2950.


Yen Finding Support Around 100

USD/JPY
Call/Put = Call
Entry = Below 100.25
Expiration = 1 week

The yen is testing an important support zone against the U.S. dollar. The 100 level was an important breakout level last month and now the 30 day EMA is hovering around that level as well. I see this as an important psychological level for the pair and a potential jumping off point for another long term bull leg. The policy of Abe and Kuroda has a multi-year outlook and should impact this pair on into the future. I am trading calls on the USD/JPY with a target entry below 100.25 and a one week expiration.