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  1. #1
    Administrator Martin Kay's Avatar

    Hot New Tips by Richard – USD/JPY, GT Weekly Expiry 9/09-16/2013 !!!

    Hi guys,

    The new Richard's Weekly Binary Options Trading Tips are ready for you!
    Check them out and spot the best trading opportunities presented in depth by our PRO trader Richard!

    Originaly presented by Richard Cox.

    Stocks were higher for the week, despite the Non Farm Payrolls miss and the continuing problems with Syria. Monthly payrolls figures in the US rose by 169,000 for the month of August (180,000 was expected) and this complicates the outlook for potential tapering changes from the US Federal Reserve. On the positive side, the Unemployment Rate dropped to 7.3%, which is the lowest level the end of 2008. The Unemployment Rate is the Fed’s preferred metric but the headline numbers from the previous months were revised lower. The contradictory outlook means one things for options traders: Renewed volatility. Expect this to continue through the month of September.

    1. Increased volatility means trading will be more difficult for the month of September. This means there is nothing wrong with staying on the sidelines or taking longer term positions that ride through the less predictable market activity. This week I will look to play against the negative Non Farm Payrolls reaction in the USD/JPY, and buy weekly CALL options in USD/JPY at the week’s open on Monday, which should come in near the 98.50 area.

    2. For stock trades, I will be looking to play markets from the long side (relatively rare for me) and work from the recent earnings performance at Goodyear Tire (GT). Fundamentals show that the stock is trading below its intrinsic value and at a lower P/E relative to the rest of the industry. Buy monthly CALL options in GT at the weekly open, which should come in near 20.85.

  2. #2
    Specialist Member RCox's Avatar
    The stock trade idea this week in GT also went well straight from the beginning. I generally find I have better stock success when I bet against stocks, as I usually am better at finding negatives than positives when looking at corporate earnings outlooks. But the fundamental picture in GT looks strong enough to weather any downside moves that will be seen in the short term once the Fed does actually announce reductions in stimulus. This would weigh on the outlook for all stocks, and the bearish momentum in these cases tends to mean that no company is able to keep its head above water. But the recent moves in GT have already shown that this is not the case. And once the dust settles from this week’s eventual Fed decision, investors will have no choice but to start looking once again at the fundamental outlook of each position as it relates to the broader earnings picture. GT is still looking strong on those fronts, so worst case scenario is that we will see some erratic price volatility that leads to short term losses. But, of course, this could work the other way as well depending on the market’s reaction to the Fed, and push prices even further in the money.

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    Last edited by RCox; 09-16-2013 at 12:30 PM.

  3. #3
    Specialist Member RCox's Avatar
    The USD/JPY trade moved in the right direction almost directly from the beginning. I was expecting a lower open to the beginning of the week, as markets in Asia were given their first opportunity to respond to the weaker than expected Non Farm Payrolls report. These numbers were bad on a number of different levels (not just the headline figures) and sometimes it takes more time for things like downward revisions to what was seen in previous months to filter into the system. But the trade did call for an entry at the week’s open regardless of the price level and this turned out to be the right area to get back into these markets. The main trick in trading the USD/JPY successfully at this point is to fine-tune your entry points. This is, of course, the case in any trade but this is even more true now with the USD/JPY, as it is very easy to get caught bullish as the wrong (higher) levels. I continue with my bullish outlook on this pair, even at current levels because I am expecting the market to have an incorrect short term outlook of the real effects of cutbacks of cutbacks in Fed stimulus. I am operating under the assumption that most of these bearish outcomes are already priced-into the market and that traders looking to position themselves here on the sell side are in for some disappointing surprises.

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