Weekly Top 5 Market Moves – 1/21-25/2013

The Must Watch Top 5 Events of the Week

1. Euro Group Meetings

01/21/2013 – Monday (all day) 

What will it affect: Euro related pairs and European stocks and indices

Forecast: no forecast is made for this type of event

Where to keep an eye on the event: Bloomberg, CNBC, other financial websites

Why traders care and what to expect: The Euro Group meetings are attended by the ECB President, the Euro Group President, finance ministers of the member states and other VIPs of the financial world. The topics include mechanisms for Euro support, monetary projections and government finances. I mentioned this event because if surprise decisions are made, it could have a hefty impact on a wide range of assets. Of course, if they just talk without really making some decisions, the market will disregard the event, but it’s better to be extra careful   

Directional bias:  UP if consensus is reached on important matters

                                    DOWN if consensus is not reached on any of the important matters discussed

How I would trade this event: I would just watch out for big surprises. Whenever heads of the financial world are together, even a normal remark made by one of them could be misinterpreted by traders and considered more important than it really is.

2. Google Inc. Earnings Report

01/22/2013 – Tuesday

What will it affect: GOOG

Consensus EPS forecast: 8.61

Where to keep an eye on the event: Bloomberg, CNBC, Reuters, NASDAQ

Why traders care and what to expect: The reported value for the last year’s same period was 8.22; better than expected values are beneficial for the company. However, the report must be analyzed in detail to get a clear perspective of the company’s performance.  A well performing company has a high stock price but there is a generally accepted idea that overvalued stocks will fall while undervalued stocks will rise

Directional bias: UP if the actual EPS will be higher than 8.61

                                  DOWN if the actual EPS is lower than 8.61

How I would trade this event: I would buy hourly Calls if the actual EPS will be higher than 10.50 depending also on other factors of the report. 

 3. IBM Earnings Report

01/22/2013 – Tuesday

What will it affect: IBM

Consensus EPS forecast: 5.25

Where to keep an eye on the event: Bloomberg, CNBC, Reuters, NASDAQ

Why traders care and what to expect: For last year’s same period the number was 4.71 so analysts seem more optimistic for this release. Better than expected values are likely to drive the stock up and lower than expected numbers will have the opposite effect

Directional bias: UP if the EPS is higher than 5.25

                                  DOWN if the EPS is lower than 5.25

How I would trade this event: Unless some big differences are posted, I wouldn’t trade on IBM

4. Apple Inc. Earnings Report

01/23/2013 – Wednesday

What will it affect: AAPL

Consensus EPS forecast: 13.47

Where to keep an eye on the event: Bloomberg, CNBC, Reuters, NASDAQ

Why traders care and what to expect: Last year’s number was 13.87 for the same quarter so it’s very close to this year’s estimate. The report will contain data for the quarter that ended on December 2012 and it will be affected by the Christmas shopping spree and we will get an idea on how many people included an Apple product on their gift list.

Directional bias: UP if the EPS is higher than 13.47

                                  DOWN if EPS will be lower than 13.47

How I would trade this event: Daily Call on AAPL if the EPS will be higher than 14. Keep in mind that Apple Inc is part of the S&P 500 so that could be affected as well.

5. UK Preliminary Gross Domestic Product

01/25/2013 – Friday at 09:30 am GMT

What will it affect: GBP/USD, FTSE

Forecast: -0.1% from a previous of 0.9%

Where to keep an eye on the event: Forex Factory Calendar/Bloomberg/DailyFX

Why traders care and what to expect: The Gross Domestic Product is the most important measure of an economy’s overall strength and higher values are beneficial for the country’s currency and indices. There are three versions of the GDP: Preliminary, Second Estimate and Final but usually the first one tends to have the highest impact.

Directional bias: UP if the value is higher than -0.1%

                                  DOWN if the value is lower than -0.1

How I would trade this event: I would buy hourly Puts on GBP/USD if the number will be lower than -0.6% 

***Note: The exact time for the release of the Earnings reports is not announced at the moment. It is possible that the date will be updated as well. Keep an eye on the mentioned financial websites for the actual release.