Weekly Top 5 Market Moves 1/28-2/1/2014
The Must Watch Top 5 Events of the Week
1. US Advance Gross Domestic Product
01/30/2013 – Wednesday at 1:30 pm GMT
What will it affect: S&P 500, Dow Jones, US stocks and USD related currency pairs
Forecast: 1.3% from a previous of 3.1%
Where to keep an eye on the event: Forex Factory, DailyFX, Bloomberg, Reuters
Why traders care and what to expect: The GDP measures the overall output of services and goods of the US economy and it’s an important gauge for economic health. The Advance GDP released Wednesday is the first of the three versions (Advance, Preliminary and Final) and it tends to have the highest impact on the markets.
Directional bias: UP on US indices and stocks if the value will be higher than 1.3%
DOWN on US indices and stocks if the value will be lower than 1.3%
How I would trade this event: I would buy a Call on S&P 500 and one on Dow if the actual number will be higher than2.2%
2. US FOMC Statement and Federal Funds Rate
01/30/2013 – Wednesday at 7:15 pm GMT
What will it affect: S&P 500, Dow Jones, EUR/USD, GBP/USD
Forecast for the interest rate: Unchanged from 0.25%
Where to keep an eye on the event: Forex Factory, DailyFX, Bloomberg, Reuters
Why traders care and what to expect: The Federal Funds Rate is not anticipated to change and the main market mover will probably be the Federal Open Market Committee (FOMC) Statement that is released at the same time, detailing the reasons behind the members’ vote and more important, containing projections for future economic conditions and maybe hints about future interest rates.
Directional bias: UP if the FOMC Statement will contain an optimistic economic outlook
DOWN if the FOMC Statement will contain a pessimistic outlook
How I would trade this event: These two events can create a lot of hectic movement and I would definitely wait until the market settles down and a clear direction is established.
3. Facebook Earnings Report
01/30/2013 – Wednesday
What will it affect: Facebook
Consensus EPS forecast: 0.11 (the previous is not available)
Where to keep an eye on the event: Bloomberg, CNBC, Reuters, NASDAQ
Why traders care and what to expect: The data for the previous year is not available because Facebook’s IPO was made less than a year ago. Analysts consider Facebook to be on an upward path and a higher EPS would probably strengthen this belief.
Directional bias: UP if the EPS is higher than 0.11
DOWN if the EPS is lower than 0.11
How I would trade this event: I would buy a Put if the EPS will be in negative territory and a Call if it will be just slightly better than 0.11
4. US Non Farm Employment Change
02/01/2013 – Friday at 1:30 pm GMT
What will it affect: EUR/USD (and all USD related pairs), US Indices
Forecast: 156K from previous 155K
Where to keep an eye on the event: Forex Factory, DailyFX, Bloomberg, Reuters
Why traders care and what to expect: More employedpeople are indicative of good economic and overall business conditions. Also, consumer spending will probably increase if people have jobs and consequently more money will be spent. The farming industry is excluded from the calculation. Keep in mind that USD is counter currency in the EUR/USD pair and that’s why the pair will go down if the number is better than expected, and vice versa for worse than expected.
Directional bias: UP if the numbers are lower than 156K
DOWN if the numbers are higher than 156K
How I would trade this event: I would buy 15 minute Puts if the number will be higher than 175K and 15 minute Calls if the number will be lower than 135K.
5. US ISM Manufacturing Purchasing Managers’ Index
02/01/2013 – Friday at 3:00 pm GMT
What will it affect: Dow Jones, S&P 500, US Stocks
Forecast: 50.8 from previous 50.7
Where to keep an eye on the event: Forex Factory, DailyFX, Bloomberg, Reuters
Why traders care and what to expect: This index is a leading indicator of economic health and it is based on the opinion of about 400 purchasing managers which are asked to rate business conditions, including employment, prices and inventories. Values above 50 signify economic growth while values below 50 are indicative of a stagnant or even contracting economy.
Directional bias: UP if the value is higher than 50.8%
DOWN if the value is lower than 50.8
How I would trade this event: I would buy an hourly Call on Dow Jones if the number will be higher than 52.
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Keep Tracking of the Upcoming events and discuss their Outcome with Bogdan and Friends on our Forum!
***Note: The exact time for the release of the Earnings reports is not announced at the moment. It is possible that the date will be updated as well. Keep an eye on the mentioned financial websites for the actual release.