Tip from the Geek – Top 5 Binary Options Trading Tips 01/06-01/13/2014
New Year And Back To Work
Well, it is now the official start of the New Year of trading. Volatile holiday trading and weak volume should be behind us. On tap now? The next wall of worry. The long term trends are still up so the next thing for traders to worry about is what might change that. Could it be the Affordable Care Act as one relative of mine believes? Could it be a tepid job market? Could it be an end to long term unemployment benefits, Janet Yellen as new Fed Cheif, global data, tapering, QE, or earnings? Could one of these reasons cause another or ampify the affect on the economy? Most likely all of these things in one form or combination will cause the market to pullback, correct or even reverse. The thing is, none of these things has happened yet, the market has not yet reversed and so the bull market is still in effect. For now at least.
Global economic data has begun to become a little weak. China services, released early on Monday, show the country is expanding at a 2.5 year low. In Europe, while still expansionary and showing improvements, the data is also weaker than expected. This is on top of the most recent months worth of unemployment claims data in the U.S. which leads me to think that NFP and total unemployment could both be weaker than expected. Weaker than expected will be good for the market so long as it is not too weak. Weaker than expected but still expansionary will take another taper off the table and keep an increase off the table too. As a whole, the bundle of data released this week will be much more important than any one data point. So long as the recovery is still recovering things should be OK in the market.
1. S&P 500 Above Support
S&P 500
Call/Put = Call
Entry = Below 1830
Expiration = One Month
My Trading Advice
This is one of those times where I have seriously considered buying a put because of the chance of some near term weakness. However, because the overall trends are still up I must stick to my guns and make trades in line with that trend. Because the trend is up it makes predicting down moves much more difficult. The S&P is sitting just above support and has a little room to move down which could happen during the week while the market awaits the data. There isn’t much reason to buy into the index (for equity and futures traders) before the end of the week unless the data wave is so good at the start it just can’t be ingnored.
Long term trends and indicators are bullish on the SPX. Based on past performance, current conditions and expected upcoming events I am still in the buy-on-the-dips frame of mind. The SPX is currently abovce support as I mention before. This support is comprised of the 30 day moving average and the closing level of the market on the last day before the Christmas week. The Bollinger Band signal line is also at this level, following a touch of the upper boundary, adding to its importance. This level should provide adequate support for the markets until the data can come out. I am targetting entry as close to this level as possible for call buying with a one month expiry.
2. France Drags On Germany And EU
DAX
Call/Put = Put
Entry = Above 9500
Expiration = One Week
My Trading Advice
The DAX is experiencing post holiday weakness as well. This index could have the most movement of all this week because of the ECB will meet. The bank could increase QE but will most likely keep things the same with statements about sluggish recovery, the support of the ECB and isolated areas of weakness and strength. I am trading puts on the DAX with one week of expiration and a target entry above 9450.
3. EURO Bears Out
EUR/USD
Call/Put = Put
Entry = Above 1.3610
Expiry = One Week
My Trading Advice
The euro is losing to the dollar. The EUR/USD pair bumped resistance again last week and woke up the bear. The pair has since dropped below important support levels and is consolidating ahead of the ECB meeting. Unless they take some euro positive action this pair is heading lower. The pair is below resistance with bearish technicals following a confirmed reversal at the top of a long term trading range so I am trading puts. My target entry is above 1.3610 with one week until expiration. My downside target at this time is near the 150 day moving average around the 1.35000 level.
4. Yen Consolidating
USD/JPY
Call/Put = Call
Entry = Below 104.75
Expiration = One Week
My Trading Advice
The yen is also in a consolidation. However, unlike the euro it is above support, after a break out, and in an uptrend. The ECB meeting will not likely move this pair too much but the BOJ could in only two weeks time. Until then it may trend in a range as it consolidates further, a range between support and the most recent highs above 105. I am trading calls with one week of expiry and a target entry below 104.75.
5. Don’t Bet On Gold Just Yet
Gold
Call/Put = Put
Entry = Above 1235
Expiration = One Week
My Trading Advice
There are many things weighing on gold, even though it has made such a nice bounce. The metal is still below resistance at 1250 and not looking likely to break at this time. The ECB, the BOJ, the FOMC, FOMC minutes, Yellen confirmation vote and etc are wreaking havoc on this trade. I am still a gold bear and looking to trade puts from this level with a one week expiry and target entry above $1235.
More Tips by the Geek – 01/06-01/13/2014 Trading Tips On Forum.
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That’s it for this week; Michael will be here next week with fresh trading tips. Meanwhile, we will be testing Michael’s tips to see what kind of an “expert” he really is. All trading assets and expiry times featured in Michael’s trading tips are based on CommuniTraders Binary Options Trading Platform.
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