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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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  • COMING WEEK MARKET MOVERS: 6 REASONS 2011 COULD END WITH A BANG 0 comments
    Dec 24, 2011 8:45 PM | about stocks: UUP, UDN, FXE, ERO, URR, ULE, EUO, DRR, FXA, FXB, FXC, FXD, FXF, FXEN, FXY, JYF, 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, FRC, DB, SAN, BNO, ENI

    Part 2: Coming Week Market Movers

     

    The following is a weekly strategy guide for traders and investors, covering coming week’s market movers and trade ramifications for traders of all major asset classes via both traditional instruments and binary options. Perfect for those seeking a summary look at likely coming week market movers

     

     For Part 1 visit:globalmarkets.anyoption.com

     

    1. Italian Bond Auction Test

     

    An Italian bond auctions Wednesday and Thursday will provide further hints at whether last week’s LTRO boosted demand for GIIPS bonds. Last week yields of benchmark 10 year bonds remained stubbornly close to the 7% level deemed unsustainable (possibly due to reports of Italian austerity backsliding). A negative auction could re-ignite crisis fears. Given the thin volume conditions, that could spark wild volatility, and so we suspect EU and ECB leaders will do what they can to preserve market calm until after the holidays.

     

     

     

    2. Market’s Primed For Year End Selloff?

     

    The bellwether S&P 500 is now at 1270, which offers technical resistance of both October highs and the 61.8% Fibonacci retracement of the downtrend in place since the April high around 1360.  That resistance combined with last week’s low volume, low conviction rally suggests limited upside that could reverse fast if profit taking gains traction, especially if fueled by a meaningful surprise event such as those listed here.

     

     

     

    3. Concerns About Post New Years Issues: Downgrades, Q4 Earnings

     

    While threatened new sovereign credit downgrades and Q4 earnings reports (expected to be dour) may not hit until January, a quiet economic calendar could allow chatter about these to grab attention for lack of other stories.

     

    4. Geopolitical Wildcards

     

    Iran’s naval exercises in the Persian Gulf and North Korea’s leadership transition are potential, though low-probability, sources of volatility.

     

     

    5. Additional Evidence of China Downturn?

     

    We had a few last week. More on the way, as China hand Patrick Chovanec reported here.

     

     

    6. Low Liquidity Means Exaggerated Price Action If Big Surprise

     

    Low volume holiday week trading typically means very quiet trading, but that same absence of traders can mean volatile price moves if a surprise event means too few traders to absorb the sudden wave of buying or selling.

     

     

    DISCLOSURE /DISCLAIMER: THE ABOVE IS FOR INFORMATIONAL PURPOSES ONLY, RESPONSIBILITY FOR ALL TRADING DECISIONS LIES SOLELY WITH THE READER. IF WE REALLY KNEW WHAT WOULD HAPPEN, WE WOULDN’T BE TELLING YOU FOR FREE, NOW WOULD WE? 

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