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Derek Frey's Forex Market Outlook

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O&F Futures News & Views

Direct contribution | contributed by nmandryk - Apr 28 - Derek Frey's Forex Market Outlook

General Market Comments:

Commodities have been trying to extend the rally we have seen but besides Crude Oil, most commodities are quite a bit below their highs. We are looking for a consolidation range to become the new near term norm. We are expecting a lot of two sided chop with little to no directional bias for some time.

Energy Complex (NYMEX)

Crude Oil:

Crude oil is in its speculative blow off phase and we could see it run all the way over 120 before beginning to fall back. We are still holding the puts we bought last week and are expecting to add to the position on the next spike to new highs. There is little if any justification for this price and in the near term we see downside momentum as more sustainable than upside.

Natural gas:

We still see this market nearing a top and remain short. We are looking for the energy sector as a whole to stage a substantial correction this week.

Equities

SP500, DJIA, NASDAQ:

As we mentioned last week, we were exiting our shorts and entering longs at or near 1325. We are now long from an average price of 1334 with stops working below 1355 so we have a 21 point gain locked in at this time. We do not expect the S&P to have much if any follow through ability if it breaks out above 1400 so we are looking to exit our longs at or near 1400 and then again begin to go short.

Financials

U.S Bonds:

Bonds really broke down last week and we used that to exit the 119 puts we mentioned in past issues. We are now looking at buying some June 118 calls for 1k or less, targeting a move back to 120 by expiration.

Metals

Gold, Silver, Copper:

Gold had a sizeable break late last week but seems poised to get back to the rally this week. We are still holding our long Butterfly and expect to see Gold retest the 950 level this week. We will begin to exit this trade if possible once we trade above 975. Silver of course followed gold lower late last week and this is a dip I would buy with stops below 1630 basis May. Copper is still consolidating and for now we are flat this market and intend to remain flat until this market shows us what it wants to do next.

Grain Complex

Corn, Soybeans, Wheat:

Wheat continues to trend down and we are still targeting lower prices before we bounce. We are expecting Wheat to find support near 8.00 and would expect a sideways consolidation to begin once that point is tested. Corn did spike above 6.00 but failed to hold it and we are still holding the 580 puts we recommended two weeks ago. We expect to see corn fall back to 5.50 by months end. Beans hit our target at 13.00 and we covered the majority of our shorts. We kept a few on as we see a small possibility that the market could fall all the way to 12.00 before the next bounce. Bottom line here this week is to sell rallies or buy puts on rallies.

Softs (NYBOT)

O.J, Cocoa, Coffee, Sugar, & Cotton:

OJ is still is as wild as ever and after taking some nice profits out of this market these last few weeks we are moving on until we get a clear break out form this consolidation zone. Given all the false starts we have had, I would suggest waiting until the market closes three days in a row at higher prices before chasing the long side. Cocoa is trying to establish a consolidation zone between 2600-2800 we expect this range to hold for the near term and will begin trading this range once we see confirmation that it will hold. Coffee has seen a lot of volatility lately and we are looking for this to increase even more in the near term. We are light buyers below 130 and sellers above 140 but all of these will be at about 25% or normal position size due to the extreme nature of this market. Sugar did not break through 13 as we forecasted last week and is now heading back to the lower end of the range near 11.50. We see this market ranging between these two points in the near term. Cotton is testing support near the 70 level and we are light buyers here with stops below 66 targeting a move back to 80.

Copper,Gas,Gold,Oil,Silver

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O&F Forex News & Views

Direct contribution | contributed by nmandryk - Apr 28 - Derek Frey's Forex Market Outlook

General Market Comments:

This week we have a lot of earnings being release here in the US. The markets have stabilized and it seems for now that the sky is no longer falling. We remain cautiously optimistic that this “recovery” will last. We continue to see the Dollar stabilize against all currencies except the Euro. We still expect to see the Euro challenge the 1.60 level before this blow off is over. This is a Macro change in trend in the Dollar and as such it will be very slow to complete and will throw off many conflicting signals along the way. Do not be fooled…the days of a free falling Dollar are behind us.

**Many of this week’s comments are similar to last week due to little changing since last Monday.

Europe
Euro, Pound, Swiss Franc

EUR/USD:
We are still looking for The Euro to retest the highs and frankly we are expecting a brief push through them grabbing headlines north of 1.60. That being said, we do not expect it to follow through and are looking to sell into the new highs rather than chase after them. The safest play would be to buy the 1.59 or 1.60 May or June puts on a push to new highs. Comments the same from last week as nothing has changed.

GBP/USD:
We hit very close to our 2.00 target and have now exited all of our long trades from last week. We are again looking to buy dips this week and if we dip back to or below 197.50, buy with both hands. We are again targeting a move to and ultimately through 2.00.

USD/CHF:
As we mentioned in last weeks issue we are buyers or major breaks below parity and this week is no exception. We are still buying dips at or below parity. We are not looking to trade this pair in directional swing trades, just intraday hit and run trading as overall direction in this pair is still sideways.

ASIA

Yen, Australian Dollar

USD/JPY:
This pair took off last week and is on it’s way back above 105. We continue to be buyers of dips but only light buyers as the possibility of a quick 200+ point correction is high. We are keeping position size low on this pair due to the high probably for a correction.

AUD/USD:
We did get stopped out of our original shorts from last week. We are still selling into this rally with stops above .9513. We simply do not expect the market to break out to new highs. We are comfortable shorting over .9400 with the afore mentioned stop.

North America

Canadian

USD/CAD:
Well our shorts from above 102 have fared very well again and we have covered 75% of the trade on the move to parity. We still expect to see this market test the .9800 level but risk is now much higher so we are not putting on any new trades at this time. But as mentioned in past issues we are sellers over 102 and buyers near 98.

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O&F Forex Newsletter

Direct contribution | contributed by nmandryk - Apr 16 - Derek Frey's Forex Market Outlook

General Market Comments:

Commodities Resume Rally?

Commodities are trying to resume the rally and it may work. We expect to see commodities chop around the current levels for the next week of so while we put in a solid base. We had been looking for a much deeper correction to come in commodities but it now appears that call was premature. While we remain cautious we are looking to cover most of our shorts and begin in some cases to roll into at least short term long trades.

Energy Complex (NYMEX)

Crude Oil:

While there is no denying the bull flag being formed on the daily charts we expect to see Crude run into resistance below the recent highs and fall back below at least 105. We do expect to break out to the upside from this bull flag, just not this week.

Natural gas:

Natural gas remains high but we are still biased to selling rallies over 9.75 with stops above 10.50. Target a move back below 9.00.

Equities

SP500, DJIA, NASDAQ:

This market continues to run into resistance above 1375. If we can close above 1400 it would be a breakout. We however do not expect this to happen yet. We expect to see the market pullback below 1350 and remain range bound for the near term. Any dips below 1325 should be bought with a tight stop. Buying June calls on these dips would also be advised.

Financials

U.S Bonds:

Bonds also continue to be range bound. We are still biased to the short side and as such are selling into rallies. This week we are looking to buy ATM puts on rallies above 119.

Metals

Gold, Silver, Copper:

We have been riding metals lower for the last few weeks, we had originally been targeting much lower prices but our models have identified a near term shift than now has us covering our shorts and instead looking to buy dips in gold for the next few weeks. We are looking to target a move back up to at least $950 by months end. Silver is also turning a corner. Buy dips below 18.00 with stops below 16.00 and target a move back above 20.00 in the near term. Copper has moved back to the upper end of its range and we are waiting to see it close above 405 before getting long. If we break out above that resistance then we will become buyers of pullbacks.

Grain Complex

Corn, Soybeans, Wheat:

Wheat remains vulnerable to further downside but should be finding a bottom in the not too distant future. Corn has been unable to break out above 6.00 and we are using that resistance as a place to enter short with tight stops above. Soybeans seem to be holding support and near term look like they have about $1.00 more in near term upside potential.

Softs (NYBOT)

O.J, Cocoa, Coffee, Sugar, & Cotton:

Last week we wrote that we expected to see OJ back over 120 in the coming days, now that we are there we are advising those who bought the calls we recommended to exit at least half of them for 100% profit or more. Cocoa is also turning back up and we are now buyers of dips with stops below last week’s lows. Last week we mentioned buying coffee at or near the 125 level. If you took that you should now move your stops to at least breakeven and hold. Sugar has also bounced and here too we are now buyers of dips with stops below last week’s lows. Support near 70 on cotton has now held and we are also now buying pullbacks here with stops below 67 basis May.

Copper,Gas,Gold,Oil,Silver

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O&F Gold Trade Recommendation

Direct contribution | contributed by nmandryk - Apr 9 - Derek Frey's Forex Market Outlook

Greetings!

With all the turmoil in the world owning at least a little bit of gold is prudent. If you missed the boat when gold was much lower, this trade is for you...

CLICK HERE to read the complete Trade Recommendation.

Gold

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3/27/2008 Trade Recommendations

Direct contribution | contributed by nmandryk - Apr 4 - Derek Frey's Forex Market Outlook

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Recorded Forex Options Webinar/Weekly Newsletters

Direct contribution | contributed by nmandryk - Apr 3 - Derek Frey's Forex Market Outlook

Due to the overwhelming response to the FOREX Options webinar that Derek Frey hosted on March 20, 2008, we have provided members with a recorded version. You will find the access information below.

Recorded Webinar

If you are interested in viewing the recorded webinar please Click Here

If you are not currently a FX Street Premium Member and would like to view the exclusive Part 2 Click Here

This is a Reminder that the Newsletters and Trade Recommendations for this week have been posted. View The Materials Here

Derek will be hosting a FREE public webinar today at 1:00p.m. (17:00GMT)

Live Webinars:

To access the webinars please visit this link

This is a direct link to the webinar on Wednesday April 2 at 1:00 p.m. EST (17:00GMT)

If you click "Register for this Session" (In Blue) you will proceed to the registration process.

You then can click " Sign up for FREE" fill in the information, you will then receive an "activation email" to activate your account

Webinars are on Mondays 10-10-:45a.m. and Wednesday/Thursdays from 1-1:30 p.m est.

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Global Exhale ...

Direct contribution | contributed by admin - Mar 26 - Derek Frey's Forex Market Outlook

This week we are seeing a global exhale. By that I mean traders are realizing that the sky is not falling yet and for now the FOMC is going to try and save the day. Can they really pull this off? We doubt it will work as history shows that it is not likely at best, but of course they have to try. We are happy to see the Dollar stabilize and expect it will continue to do so if for no other reason than the Dollar being extremely technically oversold. This week we see the Dollar continuing to find and hold a bottom while commodities continue to correct. This is the beginning of a wave 4 correction on the CRB index for those of you who are into Elliot wave theory which means it could go much deeper than we have yet seen but in the end this dip will be a great buying opportunity. We expect the CRB to correct for the next quarter or two before finding a bottom. A clear sign of the bottom will be when major media reports that commodities are dead, just like there recent reporting that commodities are hot signaled a top.

Energy Complex (NYMEX)

Crude Oil:

Last week we suggested the near term high is in for the energy complex. We stand by that and continue to sell into any rally here. We do see crude moving back to test support near $85 by the middle of April. Distillates will follow crude lower with Heating oil continuing to lead the way.

Natural gas:

Natural gas should also trend lower into mid April. We are looking for the front month to move back below 8.50 by then.

Equities

SP500, DJIA, NASDAQ:

We continue to advise traders to buy dips in this market but now that we are back above 1350 we must advise caution. We are looking for resistance between 1375-1400 to stall this rally if not cap it. We continue to see little on the horizon, either good or bad, that could move us out of our range. If we do break out over 1400 we will fade it rather than chase it.

Financials

U.S Bonds:

Bonds have failed to run on the back of the FOMC meeting as they surprised bond bulls by "only" cutting by .75 and then doing the unthinkable...actually admitting that inflation is a concern. WOW that must have hurt. Even though we now know that the FOMC does in fact admit there is such a thing as inflation, we do not know if they are yet ready to fight against it. We suspect they are not and there are more rate cuts to come. If that is the case then bonds will move higher. We are light buyers of the 122 June calls on dips.

Metals

Gold, Silver, Copper:

Gold broke down big time on the back of the FOMC statement that admitted to inflation. The Dollar found a bottom and that sent gold free falling as we cleared out all the "Johnny come lately" traders. Thinning the heard if you will. We did forecast this correction just not the magnitude of it. We are looking at the possibility of this correction going much deeper. Even bull markets have to pause from time to time, and we suspect that the commodities bull is tired if not exhausted. We are now looking for Gold to correct below $900 and frankly a move back to 750 is not a crazy as it may now sound. We will look to buy this dip when the time is right but that time is not now. Silver also fell hard last week and we see the possibility of a move back to test support near $14.00 as likely sometime in Q2. Copper pulled below our target of 360 and we have now covered our shorts at a nice profit. Near term we will stay flat copper until the next signal comes.

Grain Complex

Corn, Soybeans, Wheat:

Grains continue to be wild. We expect these markets to stage a bounce early this week but we look to sell into the bounce for one more fall coming next week after the next Ag. report. Wheat could bounce back to just below 12.00 while beans could bounce to 13.50 and corn could find 5.35. We see wheat as having the greatest downside potential.

Softs (NYBOT)

O.J, Cocoa, Coffee, Sugar, & Cotton:

OJ is still falling and we are going to cover our long spread from last week at a small loss and then stand aside until we see real support come in. Cocoa fell to and through our target of 2400 and we have now covered our shorts and our puts. We will stand aside this market as well waiting for the next signal. Coffee is still trying to find and hold support. If 1.25 can hold this week we will look to go long next week. Sugar seems to have found a bottom that should hold. We see 11.00 holding as support so longs can enter on a pullback with a stop below that support level. Cotton did hit last weeks target below 70 and we are now looking for signs that the support there will hold and if it does we plan to come in and go long in the coming days.

Copper,Gas,Gold,Lead,Oil,Silver