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Cliff Wachtel
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Cliff Wachtel, CPA, is currently the Director of Market Research, New Media and Training for Caesartrade.com, a fast growing forex and CFD broker. He covers a variety of topics including global market drivers, forex, currency hedged and diversified income investing, and is currently working on a... More
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  • APRIL 4-8 PREVIEW QUICK TRADE STRATEGY OVERVIEW FOR FOREX STOCKS COMMODITIES 1 comment
    Apr 3, 2011 10:01 AM | about stocks: UUP, UDN, FXE, ERO, URR, ULE, EUO, DRR, FXA, FXB, FXC, FXD, FXF, FXEN, FXY, JYF, AUNZ, CYB, GLD, CNY, USO, DUG, USL, NBO, DBV, ICI, CEW, SLV, OIL, SPY, SDS, RSW, BXDC, SPXU, SH, DIA, EWC, EWA, TLT, XHB, ITM, IGOV, VGK, TBT, GSG, DBC, CORN, ICN, SZR, BZF, GRU, DAX-OLD, FRC, DB, SAN, BNO, ENI
     For background, be aware of the likely key market drivers this week See APRIL 4-8 MARKET MOVERS: WATCH ECB, BOE, PRE-Q1 EARNINGS & 3 CRISES and APRIL 4-8: CALENDAR HIGHLIGHTS, THEMES, KEY MARKET MOVERS & TRADABLE TRENDSSTOCKS

    Have largely recovered losses from the 3 crises, MENA, EU, and Japan, have resumed upward momentum, uptrend once again strong. For technical and fundamental details see: APRIL 4-8 MARKET MOVERS: WATCH ECB, BOE, PRE-Q1 EARNINGS & 3 CRISES

    Trading Ramifications: Traders should keep a bias to long positions for stock indexes and other risk assets, preferably on tests to support. For example, binary options traders should maintain bias to calls on stocks indexes, barring contradictory evidence from news of the day if trading intraday or daily timeframes.

    COMMODITIES

    Trend was up this week for energy, precious metals, grains, but down for base metals, nor sugar, cotton, coffee.

    WEEKLY COMMODITIES SUMMARY COURTESY OF OILNGOLD.COM VIA ANYOPTION.COM   03apr03 1627

    Trading Ramifications: Traders should keep a bias to long positions for commodities in up trends noted above, preferably on tests to support. For example, binary options traders should maintain bias to calls on oil, grains, barring contradictory evidence from news of the day if trading intraday or daily timeframes.

    CURRENCIES

    Given that the S&P 500, our favorite risk appetite monitor, was higher, it’s no surprise that risk currencies (AUD, NZD, CAD, EUR, GBP) outperformed the safe havens (JPY, USD, CHF).

    Trading Ramifications: Traders should keep a bias to long positions for risk currencies with bullish biases as noted below, preferably on tests to support. Similarly, maintain bias towards buying puts on the safe havens as noted below. However, watch key events noted in APRIL 4-8: CALENDAR HIGHLIGHTS, THEMES, KEY MARKET MOVERS & TRADABLE TRENDS for potential short term trend reversals.

    Here are the key points to consider for framing your trading strategy for each major currency.

    US DOLLAR WEEKLY OUTLOOK: ECB, FOMC, ISM NON-MFG KEY USD SCHEDULED EVENTS

    US Dollar Bias: Neutral- wary of new long positions, if must do so, only on dips to lower end of the upper double Bollinger band ‘buy’ zone (bounded by upper red, green Bollinger bands shown below, around 1.3870, which also has 10 week EMA for support). At that level it may be worth your considering new longs depending on fundamental context.

    • US Dollar soars on NFP, then gives up gains as Fed’s Dudley douses tightening hopes
    • Top USD events this week: FOMC Minutes, ECB rate decision, ISM Non-Manufacturing data, especially the jobs component
    • US Dollar likely to continue to move opposite S&P 500, risk appetite
    • Steady stream of hawkish comments from Fed officials confirm Fed policy shift beginning
    • Positive spending, jobs data over past week move Fed closer to tightening, kill off QE 3 talk – for now
    • If ECB remarks on future increases don’t meet expectations, EURUSD likely to drop on ‘sell the news’ profit taking, though overall uptrend to remain barring EU Crisis breakdown
    • Daily and weekly charts continue to show strong EURUSD up trend, odds favor continued long positions, especially with the pair back in the Double Bollinger Band Buy Zone on daily, weekly charts

    ScreenHunter 02 Apr 03 15 32  APRIL 4-8 PREVIEW QUICK TRADE STRATEGY OVERVIEW FOR FOREX STOCKS COMMODITIES

    EURUSD WEEKLY CHART COURTESY ANYOPTION.COM 02APRIL03 1532

    (See http://www.youtube.com/my_videos?feature=mhum for more on interpreting these

    EURO WEEKLY OUTLOOK: EUR FATE DEPENDS ON FUTURE RATE HIKE EXPECTATIONS

    Euro Bias: Neutral until Thursday, Bearish afterwards on likely profit taking selloff barring strong future hike guidance.

    • Ireland’s bank stress test show at best banks need €24 billion, Ireland at ECB’s mercy for now
    • Thirty Spanish banks receive a ratings downgrade and Irish yields rise above 10 percent
    • Portugal bailout assumed, a key test for keeping markets calm about Spain, which has the most Portugal exposure
    • EUR fundamentals beyond core funding nations is poor, depends on continued expectations for another 0.75% over next 12 months after this week’s expected 0.25%
    • EURUSD momentum still strong, safer to wait to add new positions until retraces to strong support around 1.3870 (see above chart)
    • Expect some EURUSD pullback on profit taking after Thursday’s ECB announcement – possibly a lot if press conference disappoints.
    • As always, consider overall risk sentiment indicators and fundamental context before entering trade, so no long EURUSD trades if sudden drop in risk appetite.

     

    JAPANESE YEN WEEKLY OUTLOOK: LIKELY TO WEAKEN ON RISING US RECOVERY & YIELD EXPECTATIONS

    Japanese Yen Bias: Bearish unless major risk-aversion event

    To view the rest of this post please see article by same name at: globalmarkets.anyoption.com.


     

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