Analyst picks for 21 February 2012
FOREX STRATEGIST
JOEL KRUGER
My pick: Looking to sell sterling-yen
Expertise: Technical analysis
Average time frame of trades: 1 day to 1 week
This market has been very well bid over the past several sessions and while we could indeed be in the process of seeing a major structural shift, we also cannot ignore the severely overbought short-term technical studies. The daily RSI has traded up by 80, and should our in house model permit, we recommend looking to sell rallies into critical resistance by the multi-week highs at ¥127.30 for a ¥123.00 objective. Stop on close above ¥128.50.
FOREX STRATEGIST
ILYA SPIVAK
My pick: Stay short gold
Expertise: Global macro
Average time frame of trades: 1 week to 6 months
US economic data continues to broadly outperform expectations but headwinds from a recession in the Eurozone that is likely already in progress remain regardless of any progress made on the second Greek bailout this week. On balance, this suggests QE3 bets will be anchored along with inflation expectations while the safe-haven dollar recovers. This backdrop bodes ill for gold prices and I will continue holding short, aiming for a break of $1,714.05 to expose $1,677.05 initially.
QUANTITATIVE STRATEGIST
JOHN KICKLIGHTER
My pick: Short S&P 500 Long euro-Swiss franc and dollar-yen
Expertise: Fundamental and technical analysis with risk
Average time frame of trades: 1 day to 1 week
There is a possibility that the EU could finally pass a major hurdle with its next Greek vote. The positive outcome could offer a short-term relief rally, but optimism will be second guessed every step of the way. Nevertheless, such an outcome would help both euro-Swiss franc and dollar-yen longs. But, what about the alternative – a disappointment? I will stick with the S&P 500 as my risk-aversion setup, but the entry is moved up to 1,330.