Wednesday, December 29, 2010

Buy on GBP/USD (or FXB)

The GBP/USD has shown a lot of strength as the dollar has sold off today. If price clears the high 1.5520, price should continue to 1.5630 within 2-3 days. This is a 1 to 1 risk reward as we will be placing our stop below the lows of 1.5350.

A trade on FXB, scalping options on a currency ETF, we would buy a 155 call near 1.10 and we should be able to see it for 1.60 within the 2-3 day time frame.

Buy Puts on Boston Scientific

This is a quick scalp trade for a quick gain. If BSX closes below 7.61 on the hourly charts, I am planning on buying the 7.50 put for approximately 19 cents. Price should fall within 2 days to at least 7.10 if not lower. This move will increase the value of the put to 40 cents for a quick doubling of the trade. If price goes above 7.90 after triggering the trade, exit the trade at about 8 cents. This is about a 2 to 1 RR and I would give it 75% probability.

Monday, December 27, 2010

Head and Shoulders on CMG

Looking at CMG they have completed a nearly perfect, symmetrical head and shoulders pattern. The neck line, which has been violated today, gives more than $35 for the target. A Feb, at the money put could generate a $22 gain on a $13 investment. An out of the money short call may be a better way to trade this, selling the $230 Jan for $4.60 and letting it decay for the next 25 days.

Monday, March 01, 2010

The comming collapse of the Euro?

The euro has traded in a 200-300 pip range over the past 20 days. The swings have been wide and volatile. This has been difficult to trade in the short term but is setting up for what may be the next big move. The consolidation is testing a longer term fib and short term fib levels. If price break through the 1.35 we expect price to drop 750 pips if not 1000 pips back to the previous annual support at 1.25.

Though some feel the problems with Greece or minuscule for the euro zone economy as a whole, this may be a symptom to a larger economic condition. Spain's debt was already down graded and Germany is discussing leaving the euro. If many more negatives appear economically, the euro zone may spin into a major downward trend and possibly a 50% correction.