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Weekly Updates for IFO Set-ups

September 18, 2012

We closed our latest EUR future options trade for +23.5% gains by holding it for 15days and now waiting for set-ups to emerge for new trade ideas. Following outlook is for this week only and we’ll review other assets during the week. As of now, we are fully in cash.

Australian Dollar

Market Analysis
AUD closed at 1.0478 this week, looking over extended with reference to the 10 exponential moving average and Friday’s candle is hinting that the bulls may be getting exhausted. Also, take note that AUD is challenging the previous high at 1.05. It remains to be seen if the power of QE3 can fuel AUD’s rise above 1.05. Right now, even though AUD is above its moving averages, the direction is not really clear.

Trade Ideas – Waiting For A Setup
Should the bulls give up at the resistance of 1.05, AUD may go into sideways mode and give us a counter trend setup. If such opportunities arise, this would be a more aggressive trade and not included in the IFO portfolio. Nevertheless, I will update accordingly.

EURO

Market Analysis
EURO continues to climb without taking a breather, taking out the psychological round number 1.30 with ease. Dec EURO futures closed at 1.3128, a good 290 pips away from its 10 day exponential moving average. EURO is seldom this far from the 10 exponential moving average and I am expecting a pullback shortly and it may be a sharp one.

Trade Ideas – Waiting For A Setup
Even though EURO is above its moving averages, and objectively in an uptrend, I have my reservations about how long the rally can be sustained. If the uptrend is here to stay, there must first be some kind of pullback where markets take their time to digest the strong moves. If the uptrend cannot sustain itself, I would need lower highs and lower lows to signal weakness and possibly a change in trend.

Crude Oil

Market Analysis
The October Crude oil futures found support at $95 and climbed steadily towards $100. Given that resistance at $100 is a big psychological level and that $105 is the next one, I think the bulls have their work cut out for them. Last Friday’s candle showed that either sellers were coming in at $100 level or traders were readily taking profits.

Trade Ideas – Waiting For A Setup
Crude oil, when compared to Gold, EURO, AUD and E-mini S&P is the only uptrend without a euphoric parabolic move. I would prefer crude oil for a bullish trade much more than the above mentioned. My only reservation is that the potential resistance levels are all very close. If I spot an opportunity in crude oil, it will most likely be a trade outside of the IFO portfolio. Will keep you posted nevertheless.

To see if this is for you, there is a 15 day FREE trial where you can come in and take a peek. If you would like to continue with the service, there is monthly subscription of at ONLY U$49 thereafter. Expect 3-5 trades per month.  Just like OPNewsletter, I shall be limiting total number of members so we get the quality fills for our trades.

Happy Trading,
Ethan

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