CMC Markets Trader MasterClass
Last night I want invited to CMC Markets Trader Master Class with Ashraf as the guest Speaker. For those who don’t know him, Ashraf is is the founder of http://www.ashraflaidi.com/ and his company specializes in providing daily investment signals to his clients. He the author of Currency Trading and Intermarket Analysis and appears on CNBC interview several times.
Frankly I have not heard of him till last night. But from his overall presentation and explanation, I think his analysis of the future movement of EURO is very insightful. His arrives at his conclusion by a mix of heavy technical analysis and Fundamental analysis.
The key message of his talk last night is that the EURO dollar is going to hit 1.29 by end of this year and high chance of hitting 1.18 by mid Q1 2012.
The reasons for his bearish outlook of the EURO dollar are:
1) From technical analysis point of view, there seems to be a repeat of trend line. See the 5yr chart and you will see the pattern very clearly. Both from the general downward trend point of view (blue line) and from the periodic trend point of view (red lines).
2) He explained the trends from a fundamental point of view. The main reason for the raise in EURO in the last few times was due to the QEs. But this time round, there was no QE and you would expect the EURO to strengthen right? Well, he thinks that for this time round the problem will be with the EURO itself. Not due to US policy. He cited the recent successful approval of Germany parliament to increase the EURO bailout fund is not going to work. Because the new bailout fund is 440B but Italy debt alone is already 1.7T euro.
Gold
Ashraf is still quite bullish on GOLD. He says if you look at the chart, you will realize that the 200MA has not been broken yet. So technically it is still in an uptrend. But if the price breaks below $1520, it will be a different story. Moreover he mentioned that the recent correction of Gold is mainly due to the banks increasing margin. It is “artificial” and fundamental has not changed. The next strong support will be at $1487. That is where 200MA and 55WMA is.
S&P
He is bearish and mentioned that S&P have a very strong resistance at 1220. He say there is a 70% chance the index will drop to 880. But only 10% it will drop to 666. The lowest in 2009 crisis.
Again I think his analysis is very insightful and I am going to monitor the trend in the next few months very closely. On the side, I am also going to learn about Stochastic and how to apply in chart reading.
