Tip from the Geek – Top 5 Binary Options Trading Signals 05/19-26/2014
Bouncing Or Breaking Down
The S&P 500 made a surprise dip back down to support at the end of last week. A deluge of data Thursday may have been the cause, perhaps it was due to options expiration Friday or it may simply have been due to profit taking. Regardless, the index is back down to the 1880 level and once again looking ready to bounce from the long term trend line. This week could provide the catalyst to for the index, and the market in general, to break up through current resistance and move into new high territory once again. Yes, yes, the S&P and Dow did both make new highs last week but both were week and could be considered whipsaws at this time. To remain truly bullish a break above the 1900 resistance level is real must for the S&P 500.
There is quite a lot on the calendar this week even though at first glance the it looks a little light. There are not a lot of economic or earnings reports but the ones that are scheduled will carry some weight. On the economic front the FOMC minutes are released on Tuesday. The Fed’s outlook, what they discussed and more importantly their tone on the rate of taper/schedule for higher rates will be market movers for sure in my opinion. Mid week, Thursday, the regular release of unemployment claims could also be a market mover. Last weeks figures were very good but did not seem to give the market the boost I would have expected. On Friday the leading indicators, existing and new home sales data will will be released. Leading indicators are expected to have risen 0.3% last month indicating conditions for this month.
Earnings will also be in focus this week. There are not a whole lot of reports due out but it is a big week for retailers. Names range from Cato and TJ Maxx to Home Depot, Lowes, Radioshack, Staples and Petsmart. After Wal Marts lack luster report expectations are not high. Weather impacted WMT by reducing traffic and increasing costs, a combination that could affect names throughout the sector.
1. S&P 500 And The Long Term Trend
S&P 500
Call/Put = Call
Entry = Below 1875
Expiration = One Week
My Trading Advice
Last week the SPX made a surprise retreat to support after poking its head into new all time high territory. Although I have suspicions I can’t quite put my finger on what the cause was but I think that expiration Friday had the most to do with it. A slew of slightly below forecast data along with some geo political fear played a part as well. The important thing to note is that the index did not break trend and then began the new week trading up from that support. As I mentioned, there is a lot to drive the markets this week but the long term trends in the economy are up so I remain bullish.
The SPX is not only bouncing from the long term trend line. It is also being supported by the 30 day moving average which means that long and short term traders are both in the market at this time. The momentum is a little weak at this time but supports the long term trend line over the past year. Stochastic is forming a bullish cross and lends weight to my stance. The FOMC minutes is my pick for ultimate market mover of the week and expect the market to react favorably. I am trading calls this week with a target entry below 1875 and one week until expiry.
2. Don’t Forget Abenomics
USD/JPY
Call/Put= Call
Entry = Below 101.25
Expiration = One Month
My Trading Advice
The yen has been gaining strength against the dollar ever since the Ukrainian thing began and got stronger after Kuroda made it clear that no more QE was needed. The thing is, at the current levels, the yen is starting to look pretty good. The flight to safety thing is overblown and Abenomic is still printing yen like mad. The USD/JPY has been in a range for the past few months and is currently indicated at support. With the USD/JPY at support and current fundamentals the way they are I am trading a call this week. My target entry is below 101.25 with one month until expiry.
3. The DAX Is Ready To Move
DAX
Call/Put = Call
Entry = Below 9625
Expiration = One Week
My Trading Advice
The DAX has moved down and confirmed support after popping to a new high. The 9600 level has emerged as new support now that prices have broken what was previous resistance. The German economy is chugging along, just like the rest of the world, and won’t be held back by weaker EU countries. Positive data in the US this week, plus expectations of an FOMC style QE package for the EU, should help to move this index back up to retest the recent highs. I am trading a call on the DAX with a target entry below 9625 and one week until expiry.
4. Oil Surges On Libya
USO
Call/Put = Call
Entry = Below $37.50
Expiration = One Week
My Trading Advice
A new threat to Libyan oil infrastructure put a bid in WTI and Brent Crude in early trading. Hopes that global supply would increase due to peace in the region were dashed this weekend. The USO, oil tracking ETF, also gained about a percent in early Monday trading, confirming a moving average bounce late last week. I am trading a short term one week call on the USO with a target entry below $37.50.
5. Gold Hovers Near $1300
Gold
Call/Put = Put
Entry = Above $1300
Expiration = One Week
My Trading Advice
Gold prices moved back up to the $1300 level for basically no reason. Perhaps some small expectation that the FOMC minutes would indicate that interest rates would not be raised as early as expected. At any rate, gold prices are now back above a pretty nice entry level for bearish plays so I am buying a put with one week until expiration.
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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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