Tip from the Geek – Top 5 Binary Options Trading Tips List 10-17/12/2012
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Fiscal Cliff On Hold While FOMC Meets
The fiscal cliff has been put on hold while the FOMC meets this week. There is a growing expectation of QE4, at least as reported by CNBC and Marketwatch. Wednesday’s announcement could be a market mover. QE4 or firm statements about the health and growth of our economy (which I think would be better) could help fuel the current rally.
The markets are expecting a fiscal cliff resolution as evidenced by the S&P bounce from 1350 to the present levels. The hope driven move is now in a consolidation range as we all await the outcome. The S&P traded in a very flat range last week as it consolidated above long term and psychological support in the 1400-1410 range. It could continue pattern this week, at least until after the FOMC announcement. Currently resistance is kicking in around 1420 but I think that is short term and will fall under mounting bullish pressure. There is more significant resistance at 1430.
It is very possible that the FOMC will do nothing the week stronger than a continuation of Operation Twist. This would continue the combined sale of short term treasuries and purchase of longer term ones. This move has succeeded in lowering interest rates but so far no real improvements in the economy has been seen. Maintaining the status quo will help keep the markets where they are but a real recovery is what we need to remain bullish in this market much longer.
1. S&P 500 Consolidating For Santa Rally
SPX
Call/Put = Call
Entry = below 1420
Expiration = end of the month
50 Words on my Trading Recommendation
The S&P is still in a long term up trend and shorter term indications are for the same. The downside to that is the massive amounts of technical resistance the markets face and the slippery slope of economic recovery we are on now. Christmas Santa Rally, hope and relief over the fiscal cliff and the FOMC will be market drivers over the next three weeks. I really can’t believe it but we really only have a little under 14 days of trading left in this year. For now I am still trading S&P calls but I am on the look out for a top to start forming.
Based on my short and long term bullish outlook I am viewing this consolidation as a flag/pennant pattern. This pattern has a 50-60 point flag pole which projects the upside for the current move to 1465-1475 by year end. I am buying calls with end of the month expiration to give the market time to assimilate the FOMC decision on Wednesday.
2. China Data Suggest Mild Rebound In Economy
Heng Seng
Call/Put = Call
Entry = below 22,300
Expiration = end of the month
50 Words on my Trading Recommendation
The Heng Seng index, and the rest of the Asian based indexes, climbed after new Chinese data suggests that the hard landing didn’t happen. Despite a drop in exports Chinese factory output and consumer spending both climbed in recent data. This expansion, coupled with other positive data from the region points to an increase in Chinese GDP and the potential for some positive surprises in the next quarter.
The Heng Seng made new intra-day highs on Monday morning, which in the current bull market, I am taking as a good sign. Last week the index broke above long term resistance with a strong white candle. This indication of strength does not come with potential upside targets but next resistance is at 23,000 and 24,000. I am trading calls with end of the month expiration.
3. Japanese Yen Set To Slide
USD/JPY
Call/Put = Call
Entry = below 82.50
Expiration = end of the month
50 Words on my Trading Recommendation
The Japanese yen is set to slide versus the dollar. The sluggish economy declined even further in the third quarter and sent the country into recession. This development will only bolster support for the incoming new leadership. Shinzo Abe and his liberal stance are prepared to enact what he calls “unlimited easing”. This call for more yen, on top of the efforts already underway by the BOJ helped to drive the yen to where it is now, about 4 points higher versus the dollar than where it was only a few months ago.
Expectations of Abe’s succession to leadership of Japan is what drove this trade to 82.00. Conclusion of the elections on Wednesday should send it even higher. My long term projections for the USD/JPY trade take it all the way to 86.00. I am trading calls with end of the month expiration. This might not be enough time to take it all the way to 86 but I can always get in again.
4. McDonald’s Beats On Comp Sales
McDonald’s
Call/Put = Call
Entry = below $90
Expiration = end of the month
50 Words on my Trading Recommendation
McDonald’s surprised everyone by increasing its global comp store sales. The hamburger retailer was able to increase sales in all of its major markets and is indicating that they expect the strength continue. This positive earnings development should combine with the Santa Rally and Fiscal Cliff relief rally to drive this stock higher into the end of the year.
5. Euro Head Fake Opens Up New Entry Point
Euro/USD
Call/Put = Call
Entry = below 1.2950
Expiration = end of the week
50 Words on my Trading Recommendation
The Euro climb above the 1.3000 resistance was but a head fake. Last weeks tip turned out to be a bust but this week provides another opportunity. The Euro is likely going to remain volatile over the next week or two but I think we’ll get a bounce back up over 1.3000 by the end of the week.
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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 AnyOption Binary Options Trading Platform.
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