Tip from the Geek – Top 5 Trading Signals 07/14-18/2014

Mega Monday

This week started with a bang, a boom and a bust. The bust was gold, prices fell hard on the prospect of a great earnings season, rising economic data and advancing global indices. The boom was CitiGroup announcing earnings. The big bank reported earnings that beat on the top and bottom lines by substantial margins. The banking sector looks good to produce more of the same as we go into the rest of this week. The bang was the Dow Jones Industrial Average touching a new all time high, at least on an intra day basis, early on Monday morning.  This is also on top of a rebound in global stocks that begin early this morning in Asia and carried all the way through Europe.

 

Earnings are on tap and the big banks are in focus. Monday CitiGroup beat with a very substantial gain in EPS and revenue that could, in the wake of at least OK earnings from Wells Fargo, be pointing to a great round of earnings from the field in general. Lets not forget about Alcoa either, which reported EPS 50% better than expected. Tuesday will bring Goldman Sachs and JP Morgan, Wednesday Bank of America and US Bancorp, and finally Thursday Morgan Stanley and Fifth Third with dozens of smaller and regional banks throughout the week as well. There are about 150 companies reporting. Next week and the week after is when the bulk of companies, and S&P 500 companies, will report.

 

Also on tap this week is economic data with a meeting of the Bank of Japan at the top of the list. The bank is not expected to do much if anything at all but may give more indication if or when more stimulus will be needed. Other key events include the Fed Beige Book, unemployment claims, inflation housing data.

 

 

 

1. The Markets Seek New Highs

SPX

Call/Put = Call

Entry = Below 1975

Expiration = One Week

 

My Trading Advice

The SPX opened the week with a real bang. The index climbed more than 10 points at the open on the back of strong earnings and rising economics. The ripple of fear that went round the world last week is already forgotten as traders focus more clearly on the future. Citi earnings are only one company but proof that the economy is back on solid ground. I don’t think it possible for only one bank to improve while all the rest flounder. This week is merely a taste of earnings, next week will be even more important but so far the trend is still up.

 

The SPX is did not quite make a new high Monday although the Dow did. The index is making a bounce of the short term moving average that could result in a move worth several dozen points at least. The indicators are bearish now but have peaked, leading me to think a nice trend following entry is in the making. I am trading a call on the S&P 500 with a target entry below 1975 and one week until expiry.

 

 

 

2. Germany Rebounds

DAX

Call/Put = Call

Entry = Below 9750

Expiration = One Week

 

My Trading Advice

EU indices posted a nice rebound this morning that was enhanced by Citigroup and US trading. The DAX led the rest, as expected, and is making its way back up to retest recent highs. I am still bullish on the DAX and trading accordingly this week. US earnings will go a long toward helping this index too. I am trading a call with one week of expiry and a target entry below 9750.

 

 

 

3. Gold, Rusted and Pitted

Gold

Call/Put = Put

Entry = Above $1305

Expiry = One Week

 

My Trading Advice

Gold prices fell and fell hard early on Monday. My long standing position of bearishness toward the metal is paying off. Prices have fallen below recent support levels and looks likely to fall more in the coming week. A break below $1305 could take the metal as low as $1250 in quick time. I am trading a put on Gold with one week until expiry and a target entry above $1305.

 

 

 

4. BOJ Meeting For Nothing

USD/JPY

Call/Put = Call

Entry = Below 101.55

Expiration = One Week

 

 My Trading Advice

The BOJ is meeting this week with little expectation of changes to their plans. This is despite recent data that suggests Abenomics is not working as well as hoped. The USD/JPY has been trading near the bottom of the 6 month range for several weeks now and is not looking likely to to do much else until after the meeting. Long term the trend is still up for the pair so I am thinking it will drift higher following the announcement on Thursday. I am trading a call on the pair with a target entry below 101.55 and one week until expiry.

 

 

 

5. Banks Taking Charge

JPM

Call/Put = Call

Entry = Below $56

Expiration = One Week

 

My Trading Advice

Monday morning Citigroup stunned the market with impressive earnings that are leading me at least to think that the banks could really pop this summer. Citi surged by multiple percentage points and is taking other big bank names with it. I am trading a call on JP Morgan with a target entry below $56 and one week until expiry.

 

 

 

 More Tips by the Geek – 07/14-18/2014 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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