Tip from the Geek 03/09 – 16/2015: Get Ready For The Fed!
Top 5 Weekly Binary Options Trading Signals by the Geek
The FOMC is meeting this week and has built up quite a bit of expectations. The central bank, the most important central bank in the world’s monetary system, is largely expected to give indication of when it will be raising interest rates. This could be done through any of a handful of ways but most likely through statement. The word “patient” is widely expected to be removed and could lead to an environment in which rates could be raised at any meeting, possibly as soon as June. The meeting, regardless of what specific policy or statement is, will move the market and most specifically the dollar market. This will of course move the major world currencies, gold, oil and the stock markets.
The global markets are rallying. Asia and Europe are surging with many European indices at new all time highs, following the lead of US markets, all fueled by QE. Many fear QE but if the US can be used as an example is doing a good job right now: employment is up and economic wheels are turning. There is some data due out this week but it will be eclipsed by the Fed, so long as it does not reveal some kind of underlying weakness and/or completely dash positive outlook for the rest of the year.
I want to take this time to announce an account update. I have had steady success over the past 6 months and have reached the time to increase my trade size. It is actually beyond time; my account is hovering around $18,000 on CT so with my 3% rule I really should be trading closer to $500 than the $300 I have been. So, I am increasing my trade size to $500 in order to keep up with account size, limit my risk and maximize on my profit potential.
1. Bullish On The Economy
S&P 500
Call/Put = Call
Entry = Below 2,070
Expiration = One Week
My Trading Advice
The S&P 500 is bouncing from long term support, in line with the underlying trend, ahead of the FOMC meeting. The meeting is providing a ceiling of resistance while at the same time anticipation of future economic growth is lifting the market. This combination will provide a strong market movement, once the meeting/statement is released and I for one remain bullish. I see a small chance for a mild continuation of the March correction but if there is one will likely be small and lead to bullish entry.
The index is bouncing from long term support. This is evident in the charts and accompanied by indicators that are in line at least with receding bearishness if not an actual trend following entry. The FOMC meeting provides a reason for caution but not a reason to change stance. Regardless of what they say about interest rates, they have no choice but to display some confidence in the economy and the market sees that. I am trading a call with a target entry below 2,070 and one week until expiry.
2. Oil Is In Decline
USO/Oil ETF
Call/Put = Put
Entry = Above $16.80
Expiration = One Week
My Trading Advice
Oil is in decline. The price of WTI has fallen from the down trend line and is setting up for a drop below support as well. The price of oil is now trading just above the long term low with a drop to $40 a real possibility because supply and production are not slowing enough to meet demand levels. I am trading a put on the USO this week with a target entry above $16.80 and one week until expiry.
3. A Golden Diamond In The Rough
Gold
Call/Put = Call
Entry = Below $1155
Expiration = One Week
My Trading Advice
Gold is beginning to look like an attractive buy again. The price has fallen down to long term support and has held this level for several days. The Fed and the rising dollar has helped to depress the value of gold but both will soon also lead to rising inflation, and rising gold prices. The FOMC will reveal something of their plans, but not their plans, which will I think extend the dollar rally, and help gold prices rise off of this level. I am trading a call on gold with a target entry below $1155 and one week until expiry.
4. The Battle For New Highs
USD/JPY
Call/Put = Call
Entry = Below 121.25
Expiation = One Week
My Trading Advice
The FOMC is likely to change their statement this week and indicate a period in which we can expect interest rates to soon rise. This will be confirmation of expected increasing strength in gold and help to break the USD/JPY above resistance. This level, near 121.25, has been tested for over a week now with rising pressure going into the fed meeting. The indicators are lining up for a strong signal so I am trading a call with a target entry below this level and one week of expiry.
5. Riding The Sliding Euro
EUR/USD
Call/Put = Put
Entry = Above 1.0575
Expiry = One Week
My Trading Advice
The same factors to move the yen will also move the Euro. Plus the Euro has the added bearish momentum of the recently enacted QE which could easily take it down to parity. Needless to say I am bearish on the EUR/USD pair and looking to ride the bear market to its bottom or as near as I can get. I am trading a put on this pair with a target entry above 1.0575 and one week until expiry. There could be some volatility over the next few days but I have little fear this pair won’t reach parity.
More Tips by the Geek – 03/16 – 23/2015 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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