Weekly Binary Options Trading Briefing 3/11-18/2013 – Strong Non Farm Payrolls Data Sends S&P within Reach of All-Time Highs
Binary Options Trading Recommendations for the upcoming week – Markets Information and Trading Tips
Non Farm Payrolls Data Sends S&P within Reach of All-Time Highs
Global stock markets and the US Dollar finished broadly higher last week, as central bank meetings and economic data stoked investor optimism and brought buyers back into stocks despite their already elevated levels. The Dow Jones Industrials have already surpassed their 2007 highs (to trade at their highest valuations on record), and the S&P 500 is not less than 1% away from its own 2007 record as this year’s bull rally is showing little in the way of downside corrections. The gains have been widespread (and global) in nature, with the DAX, FTSE, and Nikkei all rising well above their highest levels of 2013.
Most of these indices went out at their highs, so this latest bull wave is likely to continue into the beginning of the week as Asian markets get their first opportunity to react to the data. Last week was very busy in terms of event risks and economic data but most of what was released came in better than analyst expectations and this shook out short term sellers looking to capitalize on the already high market valuations. But while this optimism is broad based (and supported in terms of economic data, there is very little onh scheduled next week that could propel optimism, and this leaves the latest market rallies vulnerable to downside corrections as longer term investors book profits at elevated levels.
Quiet Week Ahead Leaves Markets Vulnerable
Looking at next week’s data calendar, there is virtually nothing to suggest that we will see the same fireworks as last week. In the US, we will have the Advanced Retail Sales numbers on Wednesday, and this will be useful for gauging direction in stock markets next week. In the Eurozone, we will also see Wednesday data, with Industrial production figures. CPI figures for Germany, the US and the Eurozone as a whole will also be released during the week but this is unlikely to generate much interest for short term traders.
My Binary Options Trading Ideas:
1. Stocks will likely see some upside movement in the beginning of the week, as positive momentum carries over into Asian trading on Monday. Any rallies here, however, will be viewed as an opportunity for selling and I will be looking for weekly PUTS in the S&P 500 into the upper 1550s. This is a contrarian position in a very strong uptrend, but downside risk is much greater than upside potential at this stage, and this favors PUTS for the week.
2. The GBP/USD has now clearly given in at the 1.50 level and there is little to suggest that we have found a bottom in this currency pair. If we do have a negative week in stocks, the US Dollar should remain supported so I will be looking for weekly PUTS in the GBP/USD at 1.5020. Risks for this trade would be seen if we see comments from the central bank suggesting that inflation levels are too high to implement another round of easing stimulus, but comments like this would be relatively surprising.
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