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  1. #1
    Administrator Martin Kay's Avatar

    Hot New Tips by Richard – USD/CHF, TXI Weekly Expiry 8/26-9/02/2013 !!!

    Hi guys,

    The new Richard's Weekly Binary Options Trading Tips ready for you!
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    Originaly presented by Richard Cox.

    In the week ahead, most of the market’s attention will be centered on the next round of Fed speeches, housing data, and consumer confidence reports. All of these events will be judged in terms of how they will effect expectations for the Fed’s quantitative easing programs. Overly upbeat results will have something of a negative effect on stocks, as it will largely confirm that the Fed will begin tapering, and possible by a bigger amount than markets are currently expecting. This would also lead to big declines in the EUR/USD if this is the result we see.

    1. Last week’s trade in the EUR/USD fluctuated between gains and losses, despite being positively affected by the Fed minutes from the July meeting. Eurozone economic data has shown some improvement but I am still highly bearish on this pair going forward and into the end of the year. My central view, however, is for Dollar strength and I will look to use the USD/CHF as the main vehicle for this near term. This week, look to buy weekly CALL options in USD/CHF at the week’s open on Monday, which should come in near the 0.92 area.

    2. For stock trades, I will be looking to capitalize on the expected weakness that stocks should experience as a whole. I would like to see a little bit more of a rally in the S&P 500 before selling, so instead I will look to one of the recent earnings misses (and there are many) as a basis for getting bearish again. For this, I will use Texas Industries, Inc. (TXI), which is a construction company that has shown one of the industry’s biggest slowdowns in both revenue and earnings growth. Buy monthly PUT options in TXI this week, but wait for a small rise back toward 61.80 to get in at a better position.

  2. #2
    Junior Member nick_ross's Avatar
    USD/CHF call looks activated, but for me it is too early for it. There is no confirmation on daily or H4 charts showing that the down trend is reversing. We could bet on the oversold conditions, but it is not so certain bet.

  3. #3
    Specialist Member RCox's Avatar
    Quote Originally Posted by nick_ross View Post
    USD/CHF call looks activated, but for me it is too early for it. There is no confirmation on daily or H4 charts showing that the down trend is reversing. We could bet on the oversold conditions, but it is not so certain bet.
    Click image for larger version. 

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    The USD/CHF trade has performed like clockwork for most of the week, with prices falling into initial support in the 0.9160 region before making a forceful move higher overcoming short term resistance in the 0.9230 region. The early indication that this rally was on the way could be seen with the break of trendline resistance on the 30-minute charts, which came in at around the 0.9215 point. At this stage, we would need to see a pretty impressive bearish reversal in order for the trade to finish out of the money, and this is unlikely given the Dollar-positive economic data that has been released in recent sessions. Specifically, US GDP came in at 2.5% for the second quarter, which doubled the first quarter rate of expansion and the number was much higher than the 1.7% estimates that were seen early on from a majority of analysts. This is Dollar positive (and supportive for the USD/CHF) for a few different reasons. Not only does it suggest that strength in the US economy is progressing at a faster rate than most of its major counterparts (ie Japan and the Eurozone) but this also indicates that it will be much easier for the Federal Reserve to begin cutting back on Dollar weakening monetary stimulus. This week was a "perfect storm" for the US Dollar, so there is little reason to believe that the trade will end out of the money.

  4. #4
    Specialist Member RCox's Avatar
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    Bearish performances in TXI mean that both trades are in a strong position to succeed in the latter parts of this week. These declines in TXI are not entirely surprising, given the general weakness we are seeing in stocks (based on taper speculation and market uncertainty generated by possible military conflicts in Syria). In addition to this, tech stocks have experienced some erratic price activity after trading inconsistencies were forced on the market. TXI continues to trade in a clearly defined downtrend channel, and given the fundamental backdrop for the stock there was little reason to believe that any rallies in TXI would be able to see sustainable follow through. Overall, the bearish argument for TXI remains in place and it is highly unlikely that we have seen yearly lows for the stock. This relates not only to tech stocks but to broader stock indices as a whole, and there is little reason to believe that we will see strong reversals any time soon. Market volumes remain low on a comparative basis, so we could see some increased volatility as markets return to full strength in September.

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