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  1. #1
    Administrator Martin Kay's Avatar

    Hot New Tips by Richard - SP500, GBP/USD Weekly Expiry 11-18/03/13 !!!

    Richard's weekly market outlook is here!
    The new week seems to be quieter than the last one, but still we will see some interesting data from both sides of the Atlantic. Check Richard’s tips and find what is heading this week!

    Originally posted by R.Cox.

    Looking at next week’s data calendar, there is virtually nothing to suggest that we will see the same fireworks as last week. In the US, we will have the Advanced Retail Sales numbers on Wednesday, and this will be useful for gauging direction in stock markets next week. In the Eurozone, we will also see Wednesday data, with Industrial production figures. CPI figures for Germany, the US and the Eurozone as a whole will also be released during the week but this is unlikely to generate much interest for short term traders.

    1. Stocks will likely see some upside movement in the beginning of the week, as positive momentum carries over into Asian trading on Monday. Any rallies here, however, will be viewed as an opportunity for selling and I will be looking for weekly PUTS in the S&P 500 into the upper 1550s. This is a contrarian position in a very strong uptrend, but downside risk is much greater than upside potential at this stage, and this favors PUTS for the week.

    2. The GBP/USD has now clearly given in at the 1.50 level and there is little to suggest that we have found a bottom in this currency pair. If we do have a negative week in stocks, the US Dollar should remain supported so I will be looking for weekly PUTS in the GBP/USD at 1.5020. Risks for this trade would be seen if we see comments from the central bank suggesting that inflation levels are too high to implement another round of easing stimulus, but comments like this would be relatively surprising.

  2. #2
    Legendry Member Michael Hodges's Avatar
    I tend to agree with your view of a potential pullback in the S&P this week and 1550 is a good target, I even think it could correct all the way back to 1530-1540, if it corrects. The index is still trending up and will likely finish the month higher which is why I'm trading calls. I have never had as much luck trading little pullbacks and corrections as I have had anticipating them. Last week I missed out on the break above 1530 because I thought a pullback was coming and it didn't. I don't want to miss the rest of this month for the same reason but if the pullback unfolds I will definitely get in again.

  3. #3
    Senior Member linda_fx's Avatar
    I have the same view Michael that the indexes are still trending up, so the better strategy is to trade with calls on the pullbacks, but this will not last longer as I think as Richard that we are close to a final stage of the bull market. I could be wrong but the risk for a downside correction is increasing with every pip gain!

  4. #4
    Specialist Member RCox's Avatar
    Bear S&P trade triggered in the upper 1550s, classic example of why real traders do not use arguments like "the trend is up/down" when using real money.

    Head and Shoulders pattern forming on the short term charts.

    Click image for larger version. 

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    Even if we do see a higher break here, real positioning is to the downside, and trading probabilities do not favor CALLS.

  5. #5
    Specialist Member RCox's Avatar
    Surprised to see the GBP/USD trading PUT triggered after the activity seen early in the week. Those that actually got in at 1.5020 can hold those positions for weekly trades. Balance of the evidence supports the bias that a top is in place at these levels.

    Failure in the mid 1.50s:

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    Last edited by RCox; 03-15-2013 at 05:28 PM.

  6. #6
    Rookie Member Daveman's Avatar
    GBP/USD has really surprising activity the second half of this week. It climbs almost two figures north and has some indication for a trend reversal, but before that we could see a double bottom next week.

  7. #7
    Legendry Member Michael Hodges's Avatar
    I agree with you on the idea of not getting stuck on the trend following but it is not wise to trade on a reversal until it is presented. I have seen some signs that may lead to a China may be tightening soon, Europe is still in danger (Italy elections, Greece bailout not going as planned, France still very slow) and U.S. strength could lead to an end of QE. The secular bear is still intact in my opinion but I think that the S&P will trade above that level for a time before the reversal comes.

  8. #8
    Specialist Member RCox's Avatar
    Short term Head and Shoulders pattern nailed the top before this week's big declines:

    Click image for larger version. 

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