Tip from the Geek – Top 5 Trading Signals 06/30-07/07/2014
End Of Quarter, End Of Month
This is the 2nd of four month end/quarter ends for 2014. Today, Monday, is the last day of June and the end of the first half of the year. This could be a pivotal day for many reasons but that remains to be seen. Last week the action was flat as traders around the world sat and waited for Iraq to play out and for this weeks round of important macro data. Not only will be getting the usual round of monthly data we will be getting some of the final pieces of information that economist will use to predict and derive US GDP numbers. The week starts with Chicago PMI and pending home sales then moves into auto/truck sales, ISM and construction spending on Tuesday and then Challenger, ADP and Factory Orders on Wednesday before the big day on Thursday. Thursday will be the day to watch as it not only has the usual weekly jobless claims but the NFP and unemployment numbers as well.
Data released at the beginning of the week is looking good so far. Both Chicago PMI and Pending Home sales were better than expected. PMI was reported at 62.6, down from last months high but ahead of this months expectations. Pending home sales blew away the consensus with a 6.1% gain from last month. This is a forward looking view of contracts signed in June and could lead to more positive surprises in the next few weeks. Jobs creation is expected to remain in line with recent trends in the 200-225,000 range. Unemployment is also expected to remain steady around 6.3%. Adding to the market turmoil potentially caused by US data blitz will be another policy meeting for the ECB with an expected rate decision on Thursday.
1. SPX Signals Buy
S&P 500
Call/Put = Call
Entry = Below 1960
Expiry = One Week
My Trading Advice
The SPX gave up a pretty strong stochastic buy signal on Friday. The index, and the indicator, had been holding relatively stable following an earlier weaker signal and a week of sideways trading. Friday looked to be more of the same and the the late afternoon rally on the Russell re-balancing put the index into bullish position. Stochastic is now indicating a strong buy as %K is above %D and both are pointing up. The only thing standing in the way now are the data points being revealed this week and some minor resistance around the current all time high that is being broken as a write this article.
There is a little reason for caution this week even with the buy signal. There has been some weak data this month and if it shows up in the jobs number that could send the market seeking support. I however think that the data will be good an point to an explosive third quarter. The trends are up, I am bullish and the signal is in line with those stances. I am trading a call on the S&P 500 with a target entry below 1960 and one week until expiry.
2. What’s Up DAX?
DAX
Call/Put = Call
Entry = Below 9830
Expiration = One Week
My Trading Advice
The DAX experienced a little softness last week on some lack luster data but I think this is just near term. The rest of the world, you know, the people that buy things from the EU, is still in rebound and that will carry over into the EU as well. I am using this as another entry into the DAX which should be retesting all time highs this week or next according to my current analysis. I am trading a call on the DAX with a target entry below 9830 and one week until expiry.
3. Ho Hum Yen Trading
USD/JPY
Call/Put = Put
Entry = Above 101.25
Expiry = One Week
My Trading Advice
The yen has been trading in a kind of ho hum sideways range without much direction for months now. The USD/JPY pair has been in a tight range since February and the time when the market began to believe the BOJ was not going to increase QE. Now the pair is moving lower in the range with the lower boundary as a target, near 101. The pair could trade along this level for the next two weeks, up to and until the next BOJ meeting. Indicators are supporting the move so I am trading a put on the pair with a target entry above 101 and one week until expiry.
4. Bullish On Gold, Really?
Gold
Call/Put = Call
Entry = Above $1315
Expiration = One Week
My Trading Advice
I have read several opinions and forecasts for gold to be bullish now but I just don’t see it. The recent rally was driven on short covering and flight to safety, two things that are both petering out. There is no fundamental reason to get long gold at this time and the indicators I read confirm it. Gold has not been able to break $1320 for two weeks and is now exhibiting bearish signals, in a longer term down trend, that point to lower prices. I am trading a put on gold with one week until expiry and a target entry above $1315.
5. Oil Premium Set To Deflate
USO
Call/Put = Put
Entry = Above $39
Expiration = One Week
My Trading Advice
The Iraq Oil premium is set to deflate as traders and speculators realize that there is no real threat to oi supply at this time. WTI and Brent both fell in early Monday trading and the USO will follow. I am trading a put on the Oil ETF, USO, with a target entry above $39 and one week until expiry.
More Tips by the Geek – 06/30-07/07/2014 Trading Tips On Forum.
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That’s it for this week; Michael will be here next week with fresh trading tips. Meanwhile, we will be testing Michael’s tips to see what kind of an “expert” he really is. All trading assets and expiry times featured in Michael’s trading tips are based on CommuniTraders Binary Options Trading Platform.
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