My pick: Long FTSE 100 at 5,000
Expertise: Technical analysis
Average time frame of trades: 5-10 days
We had to wait the entire week, but our counter-trend long recommendation was finally triggered on Friday. The market dropped through our psychological barrier to trade slightly below 5,000, before bouncing into the close and trading back above this level and staying there. The close on Friday is quite encouraging, given the formation of a bullish hammer pattern. Look for a break back above 5,085 to accelerate. Target 5,400 with a stop at 4,850.
My pick: Short HSI Index below 19,350
Expertise: Fundamental and technical analysis with risk management
Average time frame of trades: 1 day-1 week
A collapse in risk appetite this past week has worked out well for my Aussie dollar-Canadian dollar trade with both the first and second targets having been met already. However, I am still waiting for a confirmed break (close) from the HSI below 19,350. While the Hong Kong index tested its support level, confirmation is imperative to establishing a new trend. Go short below 19,350 with a 1,000 point stop and first target.
My pick: Stay short the S&P 500, add to positions below 1,050
Expertise: Combining fundamental and technical analysis
Average time frame of trades: 2-10 weeks
The last time I submitted my top trading pick, I advocated going short the S&P 500 index below 1,100 and that trade has panned out well so far. I remain short, and I would like to add to the position if the market retests 1,100 and/or breaks below 1,050. There are considerable stresses in the credit markets simmering below the surface that lead me to believe this is the start of another major decline for the equity index.