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Originaly posted by Michael Hodges.

SPX Still Moving Up On The Long Term Trend Line

S&P 500
Call/Put = Call
Entry = below 1665
Expiration = one week

The S&P 500 is still moving up along the long term trend line. The Monday morning move higher took the index up above the short term moving average with bullish technicals. Momentum is growing and will likely carry the index higher going into next weeks FOMC meeting. Even with last weeks weaker than hoped for NFP number the chances that tapering will begin next week are high. Moving forward, there is technical resistance ahead as well. The index is trading up to the recently set all-time high. It looks as if this level may coincide with next weeks FOMC meeting.

At this time the index is moving higher. Support is still there, even if it may be wary. The long term trend line is a very significant level for me and one that I can not argue with. Price action and bullish indicators are leading me to trade calls. Because the FOMC meeting is next week I am sticking to one week expiry. This week I am targeting an entry below 1665.

Nikkei Growth Is Growing

Nikkei 225
Call/Put = Call
Entry = below 14,200
Expiration = one week

Japanese GDP is growing stronger than previously expected. That is a good thing. It is a sign that Abe’s plans are working. The news sent the Nikkei back up over 14,000 and helped support the idea that Abe could successfully move forward with the planned tax hike. Raising taxes, and revenue for Japan, is an important step in Japanese recovery efforts. When the government has more money it can spend more money on public works and therefore provide more stimulus for the economy. I am trading calls on the Nikkei this week but keeping the expiration short for the same reasons listed above. My target entry is below 14,200 with one week until expiry.

Yen, Slip Sliding Away

Call/Put = Call
Entry = Below 99.50
Expiration = one week

Abe’s plans are working. The Japanese economy is growing. This means the long term plans put into place by himself and Kuroda are more likely than ever to be completed. This means a doubling, doubling, of the yen base by 2015. This means twice as many yen as before. If the yen was worth 82 versus the dollar when they began this plan theoretically the yen should be worth 164 when they are done. Unfortunately it is not as simple as than but I do expect the yen to slide further. The pair broke out of its triangle last week and is now consolidating and bullish technicals suggest higher prices are on the way. I am trading a call on the USD/JPY with one week until expiration and a target entry below 99.50.