Connect with us
It will be interesting as European Central Bank President Mario Draghi steps up to the monetary stimulus plate.

archive

Tomorrow‚??s Market Will Be a ECB-Driven Day; Plus, Watch My New Options Video

It will be interesting as European Central Bank President Mario Draghi steps up to the monetary stimulus plate.

One way or the other, tomorrow will be a big day in the stock market. Either way, it will be interesting as European Central Bank (ECB) President Mario Draghi steps up to the monetary stimulus plate. To use baseball analogies, will he hit a home run with his policy initiatives, strike out or hit something in between, such as a stand-up double?

As I’m sure you’ve heard by now, some of the hotter topics at Davos will be the contrast between the strength of the U.S. economy and the weakness of the euro zone and emerging markets, as well as the divergence in monetary policies between the Federal Reserve, European Central Bank and the Bank of Japan. The¬†difference between the economic prospects in these areas was succinctly summed up by the World Bank last week when it raised¬†its 2015 growth forecast for the United States to 3.2% from 3%, while the euro zone is expected to grow at only 1.1% and Japan at 1.2% this year.

This change in the World Bank’s predictions was augmented¬†by the International Monetary Fund’s (IMF) decrease in guidance¬†for global growth prospects this year. According to the IMF, the world economy will now grow by 3.5% in 2015 and 3.7% in 2016, down from its October forecast that put growth at 3.8% and 4%, respectively. Also, much like the World Bank, the IMF revised its estimate for U.S. economic growth to 3.6% this year, up half a percent. Some quick math shows that the IMF cut its outlook for the three other economic horsemen that are China, the euro zone and Japan.

Those forecasts put Thursday’s European Central Bank meeting in greater focus and increase expectations that it will result not in just a big, but a supersized, stimulus package to revive the stagnant euro zone. I think that the Swiss National Bank’s¬†decision to decouple the value of the Swiss franc from¬†the euro ahead of the upcoming ECB meeting is a clear sign this is the case.

Yes, tomorrow should be interesting, but let‚??s not forget the improving outlook for the U.S. economy. As I tell subscribers to my PowerTrend Profits investment newsletter, just like in basketball, we want to be investing where the ball is heading, not where it currently sits.

On a side note, I recommend that you pick up the most recent edition (January 19, 2015) of weekly financial paper Barron‚??s. The issue contains the first part¬†of one of my favorite features¬†of the year, the Barron‚??s Roundtable, which brings¬†together some of the biggest minds¬†in the money management world. Topics ranged from their outlook on the global economy and interest rates to¬†what‚??s ahead for the stock market. Of course, we have to keep in mind that each participant has his or her own investing framework which dictates the kinds of securities he or she can invest in. For example, Scott Black, founder and president of Boston-based Delphi Management, is a tried and true value investor. For 2015, Black predicts the S&P 500 returning 10% — with 8 points of that coming from growth and 2 points from the dividends. For context, the S&P 500 returned 32.4% in 2013 and 13.7% in 2014 (including dividends).

If I was a person that only invested in stocks, then I may agree with Black on his outlook for the S&P 500, but not only do I look at the shifting changes in economics, demographics, psychographics, technology and regulatory mandates to hunt for better returns, I also trade options. It‚??s those same options that can help deliver outsized returns in good times and help cushion or even offset the pain of a falling market. That combination is the strategy I employ in The Thematic Growth Portfolio I manage for Fabian Wealth Strategies, as well as in my investment newsletter and trading services, such as PowerOptions Trader.

Learn the Essentials of Options Trading with My New Video

Even though options trading activity has grown by leaps and bounds during the last few years, I know there are thousands and thousands of folks who are interested but feel they simply don‚??t know enough about trading options. A recent industry data point from TD Ameritrade showed that more than 70,000 investors made their very first options trade in the last 12 months. If you think about it, just last month, approximately 6,000 investors made their first options trade. Perhaps they need to improve their retirement savings after the financial crisis, save for that dream home or simply make sure there‚??s enough money to put their children or grandchildren through college.

That‚??s why Eagle Financial Publisher Roger Michalski and I sat down and filmed this free video. I‚??m confident it will help you understand what you need to know — the essentials — when it comes to trading options. I‚??ll also show you how, time and time again, subscribers of PowerOptions Trader are making triple-digit percentage gains on our options trades using the intersection of PowerTrends and options contracts.

Follow this link to watch my new options video presentation.

In case you missed it, I encourage you to read my e-letter column from last week about using market catalysts and timing to your advantage. I also invite you to comment in the space provided below my Eagle Daily Investor commentary.

Upcoming Appearances

O Join me for the World MoneyShow in Orlando, Florida, Feb. 4-7 at the Gaylord Palm Resort & Convention Center. To register for free admission to the investment conference, click here or call 1-800-970-4355 and mention you are my subscriber. Use priority code 038046.

O I also invite you to attend the only event that gives retail traders hands-on access to the very same tools, technology and ideas as the best and brightest traders in the world — The Traders Expo New York!

More than 30 hours of firsthand mentoring from me,¬†Chris Versace,¬†and 70 other elite traders is just a slice of what’s happening February 28 – March 2, 2015. Here’s more of what’s in store:

  • Experience the Most Interactive Traders Expo Yet
    Unprecedented access to top traders in all markets, plus LIVE trading, product demos and more!
  • Get Exclusive Content Directly from the Major Exchanges
    Ultra-reliable trading information straight from the NYSE, CME and CBOE.
  • See the Latest Breakthroughs in Trade Platforms and Technology
    Try it all out for yourself, from new software and indicators, to trade systems and mobile apps.
  • And Get 2 Special eBooks — a $158 Value — Yours FREE
    Receive “The Top 4 Market Timing Tools for Profitable Trading”¬†instantly when you register, and “5 Things Traders Need to Know”¬†when you attend the Expo!

Register FREE at www.NewYorkTradersExpo.com!

Written By

Chris Versace is a financial columnist and equity analyst with more than 18 years of experience in the investment industry. He has been ranked an All Star Analyst by Zacks Investment Research and his efforts in analyzing industries, companies and equity securities have been recognized by both Institutional Investor and Thomson Reuters‚?? StarMine Monitor. He‚??s frequently published in The Washington Times and is a frequent contributor to the daily radio show ‚??America‚??s Morning News‚?Ě and ‚??America‚??s Radio News‚?Ě. He has been quoted in the Wall Street Journal, Investor‚??s Business Daily, The Street, USA Today and other publications. In addition, he can be frequently seen on television‚??s ‚??Fox Business‚?Ě show.

TRENDING NOW:

Connect