Analyst picks for 13 March 2012


My pick: Buy dollar-yen from ¥80.00
Expertise: Technical analysis
Average time frame of trades: 6 months

The market is doing a good job of showing the potential formation of a major cyclical bottom after closing above the weekly Ichimoku cloud for the first time since July 2007. We could be in the process of seeing a major bullish structural shift that exposes a move towards ¥85.00-¥90.00 over the coming months. However, shorter-term studies are unwinding from overbought, so I’ll look to take advantage of dips back to ¥80.00. I’ll only look to exit on a weekly close under ¥78.00.


My pick: Stay short S&P 500
Expertise: Global macro
Average time frame of trades: 1 week to 6 months

I sold the S&P 500 last week. The initial move lower was thrown a bit off course, as markets put the spotlight on Greek private sector involvement, but sellers appear poised to reclaim momentum. I will continue holding short, initially targeting 1,337.10 and looking for an FOMC statement that dents QE3 expectations to prove risk-negative, hurting hopes that a ramped-up US recovery will materially offset headwinds from a widely expected recession in the Eurozone.


My pick: Short S&P below 1,350; 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 little reason to change my existing positions. The long dollar-yen exposure is playing to the early stages of a large fundamental trend. Euro-Swiss franc has very defined risk/reward potential, it just requires patience until the catalyst is found. My S&P 500 exposure is my view that the risk trend theme could turn from congestion to collapse. The same setup could be applied to Australian dollar-dollar, New Zealand dollar-yen and many other risk-sensitive pairs.