There are a couple of things going on in the markets I'm watching. Clearly, in the Forex markets, I'm watching the USD/CAD pair. I've written about them ad naseum over the last few days. Also, I'm watching the GPY/JPY. I'm expecting it to fall below support at some point soon. If it goes, it will go big, and fast. I'm hoping to be a) awake and b) ready to take the trade opportunity when it comes. I'm watching the CHF/JPY as well. It is trending upward and narrowing as it goes. It will either break higher or lower and I'll be watching it to see what happens. I'm watching he EUR/GBP as it bounces off of its 800 sma (hour chart). This pair fell through the 800 sma about a month or so ago and has bounced off of it once already. It will either break through and go north, or it will bounce off of it again and fall back a hundred pips. The EUR/USD also interests me. It is a few hundred pips from a significant low (1.2329, its low since April of '06). If it breaches that low, it could fall down to the 1.1600 level (last seen in 2005), or even lower.
I've also got an eye on the stock market. As the Dow flirts with 6500 and the NASDAQ hits 12 year lows there are two modes I see folks in. They either panic and sell (or freeze), or they seize the opportunities and either buy at historic lows, or short weak issues to squeeze the last few drops of blood out of them. I've been contemplating breaking out my put selling strategy again. As otherwise strong companies get hit hard by market conditions (MMM, INTC, JPM, BBT, GE, USU, just to name a few) there is an opportunity to capitalize on the fear by selling puts (options obligating myself to purchase a set amount of stock at a set price by some future date) and reaping a hefty premium in the process. Put selling is not for the faint of heart, or for those brand new to options (I'd recommend selling covered calls if you are interested in breaking into this area of the market) but it can be very profitable. I only sell puts on stocks I would not mind owning at prices I would not mind paying. A good starter book on this strategy is this book by Ronald Groenke. These days there is money to be made on this. I will do more in the future on how I look at put and call selling. It's done well for me.
On a final note, I'm also looking at energy trusts. They were big a year or so ago when oil was $150/bbl., but prices have waned since then (in some cases substantially - see AAV for an example). These trusts pay out monthly dividend income from their royalties. The regular income is nice and this looks like a good time for folks who are going to want regular monthly income in the coming years to get in at a good price. Does anyone really think $40/bbl. oil is here to stay?
Happy Trading!
I've also got an eye on the stock market. As the Dow flirts with 6500 and the NASDAQ hits 12 year lows there are two modes I see folks in. They either panic and sell (or freeze), or they seize the opportunities and either buy at historic lows, or short weak issues to squeeze the last few drops of blood out of them. I've been contemplating breaking out my put selling strategy again. As otherwise strong companies get hit hard by market conditions (MMM, INTC, JPM, BBT, GE, USU, just to name a few) there is an opportunity to capitalize on the fear by selling puts (options obligating myself to purchase a set amount of stock at a set price by some future date) and reaping a hefty premium in the process. Put selling is not for the faint of heart, or for those brand new to options (I'd recommend selling covered calls if you are interested in breaking into this area of the market) but it can be very profitable. I only sell puts on stocks I would not mind owning at prices I would not mind paying. A good starter book on this strategy is this book by Ronald Groenke. These days there is money to be made on this. I will do more in the future on how I look at put and call selling. It's done well for me.
On a final note, I'm also looking at energy trusts. They were big a year or so ago when oil was $150/bbl., but prices have waned since then (in some cases substantially - see AAV for an example). These trusts pay out monthly dividend income from their royalties. The regular income is nice and this looks like a good time for folks who are going to want regular monthly income in the coming years to get in at a good price. Does anyone really think $40/bbl. oil is here to stay?
Happy Trading!
