Analyst picks for 24 January 2012

STRATEGIST
JOHN KICKLIGHTER

My pick: Short S&P 500 Below 1,300
Expertise: Fundamental and technical analysis
Average time frame of trades: 1 day to 1 week

The fundamental outlook for global growth and financial stability is crumbling and yet, risk-based assets continue to nudge higher. This disparity is founded in hope of unnatural calm and stimulus. However, the potential risk of a downdraft – though not the prevailing trend – is severe. Therefore, I’m watching to see if the S&P 500 loses momentum and collapses below 1,300, with a mind for a short and stop above the current swing high.

QUANTITATIVE STRATEGIST
DAVID RODRIGUEZ

My pick: Long euro-dollar above $1.2875
Expertise: System trading
Average time frame of trades: 1 week – 6 months

I think we are in the midst of a major euro-dollar short-covering rally, as the pair bounces significantly off of its most recent lows. I think the strong rally through Monday’s session sets the stage for strength throughout the rest of the week, and as such I’d like to get long. I’ll place the stop below Monday’s low of $1.2875 and look for initial targets of $1.3200, with an ultimate objective of $1.3500.

FOREX STRATEGIST
JOEL KRUGER

My pick: Looking to buy euro-yen
Expertise: Technical analysis
Average time frame of trades: 1 week

The euro is finally starting to correct after weeks of pressure. The latest break above $1.3000 opens the door for additional upside over the coming days. From here, look for additional short-term corrective gains towards the $1.3500 area, before the market stalls out in favour of the next major lower top and underlying bear trend resumption. The bullish reversal close in the previous week provides additional confirmation for short-term bullish outlook. I will look to sell into rallies.