Weekly Top 5 Market Moves 24-28/12/2012
The Must Watch Top 5 Events of the Week
1. Santa Claus is Coming to Town
12/24/2012 – 12/25/2012 – Monday and Tuesday – CHRISTMAS EVE and CHRISTMAS DAY
What will it affect: All pairs and assets.
Forecast: Joy and happy thoughts
Where to keep an eye on the event: Close to your loved ones
Why traders care and what to expect: Most markets will be closed Monday and Tuesday. The trading volume will be very low for the markets that are still open, if there will be any. Tuesday the markets are closed worldwide. Christmas in my opinion is not a time for trading.
Directional bias: Merry Christmas!
How I will trade this event: With a glass of Jack in front of me, buying Calls on love and Puts on hate. I can guarantee you those are winning trades.
2. United States Unemployment Claims
12/27/2012 – Thursday at 1:30 pm GMT
What will it affect: S&P 500, DOW Jones, EUR/USD
Forecast: 365K from a previous of 361K
Where to keep an eye on the event: Forex Factory Calendar
Why traders care and what to expect: This economic indicator measures the number of people that claim unemployment related social help. If more people are unemployed, it means that the economy of the country is not doing so well. Higher than expected numbers will weaken the S&P 500 and all other important US underlying assets.
Directional bias: UP if the numbers are lower than 365K
DOWN if the numbers are higher than 365K
How I would trade this event: I would buy hourly Puts if the numbers will be higher than 375K (not higher than 365K). But given the low volume created by the Christmas Holidays, I would probably not trade.
3. United States CB Consumer Confidence
12/27/2012 – Thursday at 3:00 pm GMT
What will it affect: S&P 500, DOW Jones, EUR/USD
Forecast: 70.3 from a previous of 73.7
Where to keep an eye on the event: Forex Factory Calendar
Why traders care and what to expect: This is a survey of around 5,000 households and it is indicative of their sentiment regarding the current and future economic environment. If the overall sentiment is positive, this could mean that people are more prone to spending money. This is very important for a country because consumer spending is a big part of the economy.
Directional bias: UP if the numbers are higher than 70.3
DOWN if the numbers are lower than 70.3
How I would trade this event: I would buy Daily Calls if the numbers will be higher than 75
4. United States New Home Sales
12/27/2012 – Thursday at 3:00 pm GMT
What will it affect: S&P 500, DOW Jones, EUR/USD, GBP/USD
Forecast: 382K from a previous of 368K
Where to keep an eye on the event: Forex Factory Calendar
Why traders care and what to expect: It is a leading indicator of economy health because if more homes are bought, probably the citizens are doing well and can afford a new home, with all the other things that are required for it: new appliances, furniture, electric and electronic products and last but not least, a mortgage.
Directional bias: UP if the numbers are higher than 382K
DOWN if the numbers are lower than 382K
How I would trade this event: I would buy Daily Calls on the DOW if the numbers will be higher than 395K
5. United States Pending Home Sales
12/28/2012 – Friday at 3:00 pm GMT
What will it affect: S&P 500, DOW Jones, EUR/USD, GBP/USD
Forecast: -0.3% from a previous of 5.2%
Where to keep an eye on the event: Forex Factory Calendar
Why traders care and what to expect: This economic indicator differs from the New Home Sales because it takes into consideration the change in the number of houses awaiting the final, closing transaction, without taking into account new buildings. Better than expected numbers are usually good for the economy
Directional bias: UP if the value is higher than -0.3%
DOWN if the value is lower than -0.3%
How I would trade this event: I would buy Daily Calls on the DOW and S&P if the numbers will be higher than 1.7% and Puts if the numbers will be lower than -2.3%
Keep you Eyes Open!
The markets will behave weird this week so you should be more cautious than usual if you want to trade during this period.
Keep Tracking of the Upcoming events and discuss them with Bogdan and Friends on our Forum Here!