Fast Break for Traders: The Week Ahead

Week of March 16, 2009

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5 Hot Picks by Ed Carr of Trader's Edge

Mr. Ed Carr graduated from Allegheny College with a Bachelor of Science in Economics. He continued his education by obtaining a Masters in Business Administration in Finance from Fairleigh Dickinson University. His initial career foray was as an account executive of a large commodities brokerage firm. In five years he was ranked as a top producer and was promoted to management. Shortly thereafter he was recruited by a major brokerage firm and became their Vice President. In 1987 he put his experience to use and founded Carr Investments Incorporated. Carr Investments had professionally handled thousands of clients worldwide for ten years. In 1998 the assets of Carr Investments were acquired by Trader's Edge Inc. Mr. Carr took over the role of President and Jonathan Lubow as Vice President.

Trader's Edge is offering a Complimentary Booklet, Smart Trading Techniques: How to Profit from Time Value Decay Writing S&P 500 Credit Spreads

The week of March 16th should be an interesting week to say the least.

S&P 500

After having the best week in the S&P 500 since November, can the short-term momentum continue and the market move higher? Or will the bears reassert their strength by selling into the rally? Is all of the bad news public or are there more surprises lurking? Predicting any market on a short-term basis is difficult some say virtually impossible. Astute traders prefer to take advantage of the uncertainty by selling premium. The S&P 500 offers strong opportunities to option sellers. Overvalued options should always be sold, never purchased. With the volatility index over forty-three options are rich in premium!

Japanese Yen

The G10 Finance Minister weekend meeting in the U.K. ended without addressing any currency discrepancies or intervention. This would lead one to believe that the same trends in place will continue. The Japanese Yen will continue to lose value and we remain short the Yen.

Canadian Dollar

While the Japanese economy continues to report putrid economic data, Canada remains the only industrialized nation that has not been forced to bail out a bank. The Canadian dollar will continue to gain strength, and we remain long the Canadian Dollar.

Crude Oil

Another important meeting concluded when OPEC, as well as the world, recognized that their agreed upon cuts almost always are followed by member nations outright cheating. The days of Saudi Arabia being the swing producer may be over. The Saudis power to enforce quotas is virtually non-existent. Expect the coming week to see lower prices of crude with a test of $40 sooner than later. This may provide an excellent opportunity to sell short-term crude oil puts if this level is reached. The absence of a robust recovery with increased oil consumption or major turmoil in the Middle East will prevent oil from reaching lofty levels.

Gold

The Gold market seems to be base building. The bulls are buying as a hedge against inevitable inflation and as a safe haven. The downward pressure has been from recent central bank selling. Demand for Gold coins and bars have increased but overall jewelry demand has weakened. A larger than expected increase in Tuesdays Producer Price Index and Wednesdays Consumer Price Index could be a catalyst to boost Gold out of its trading range and test resistance at $980.

Happy Trading but remember only risk capital should be used. There are certainly no assurances.

5 Hot Picks by Phil Flynn of Alaron

Phil Flynn Phil is Vice President, Energy and General Market Analyst with Alaron Futures and Options and is one of the world's leading energy market analysts. His market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, investors and media worldwide.

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Oil Flop!

Crude oil is running out of reasons to rally: OPEC can't or won't cut production, heating demand is expected to be below normal, and there is near record supply in Cushing Oklahoma! Sell rallies and look for a test of $39 a barrel!

Heating Oil

The first sign of spring is here! It is warming up! Heating demand is falling and so is the market! With weak industrial demand and warm temperatures, heating oil has topped! Look for a test 11000 basis May!

Soybeans

Planting intentions coming, the high price of beans will inspire a big crop. We think you should buy puts and accumulate them before the report.

Coffee

Coffee is trending down but the shorts have gone to heavy. Look to buy May coffee at 10700 stop 10500.

T-Bonds

Bonds are looking toppy. Sell June Bonds at 12700 stop 12715.

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Disclaimer: The Commodity Futures Trading Commission has asked us to also advise you that trading futures is not without risk. While there is opportunity for incredible wealth building, there is also the risk of losing even more than you invested. Of course, that's not unlike most other businesses. But informed traders are the best traders! Opinions expressed by Fast Break authors are not those of FutureSource.