Hi guys,

The fresh new Top Five Tips of the week from Michael are here. The week is starting with optimism and all time highs in the stock markets, but what will be the next big move? Check Michael tips and find out the best opportunities to trade!

Originaly posted by Michael Hodges.

S&P 500 Breaks Out To New Highs - Trade Active on CommuniTraders

S&P 500
Call/Put = Call
Entry = below 1610
Expiration = 1 month

Aside from the massive onslaught of small and mid cap earnings reports there really isn’t much going on in the world this week. This means that fundamentals and future earnings expectations will rule this market. Last weeks jobs report, especially the revisions to the previous data, was a real boost for sentiment. This was seen in the huge jump in equity prices Friday. This euphoria could carry into the first of the week so an early week entry may be tricky. I do not recommend chasing prices higher, waiting for the market to calm after the rush is the right thing to do.

Weekly and daily technical indicators are bullish. If the index wasn’t extended so far past the 30 day moving average I would say buy at Friday’s closing price. However, the index is rather extended so I think it best to wait for a test of support. This could bring the index all the way down to 1600 or below but I do not think this will last long. I am bullish on the index in the near to intermediate term but more wary of reversal than ever. The rally is old, tired and extended. This week I am trading calls on the S&P 500 with one month expiration and a target entry below 1610.

German Recover Still On Tap - Trade Active on CommuniTraders
Call/Put = Call
Entry = below 8125
Expiration = one month

Germany is the most likely country to begin growing in the EU. The ECB’s latest move to lower interest rates could be what it takes to shock Germany back into growth. The DAX may have a small pull back to retest the recently broken resistance level around 8,000 but the near to intermediate term outlook is bullish. I am trading calls on the DAX with a target entry below 8,125 and a one month expiration.

Yen To Break 100 - Trade Active on CommuniTraders

Call/Put = Call
Entry = below 100
Expiration = 1 month

My USD/JPY chart is telling me to buy. There is a stochastic buy signal on the weekly and daily charts. There is still resistance at 100 that may stop the move for a short time but strong MACD is also supporting higher prices. I am trading calls on the USD/JPY with a target entry below 100 and a one month expiry.