Tip from the Geek – Top 5 Binary Options Trading Tips 7/08-15/2013
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Earnings Season Bounce To Continue
Last week we got a stellar NFP report and other good news for the U.S. economy. Not only are jobs increasing and unemployment decreasing we are also seeing an improvement in the participation rate. This bodes well for U.S. households and companies as more workers and more jobs means more money for the consumer and profits for corporations. The week starts with the release of Alcoa earnings after the bell Monday. There is not much expectation for profits here but there is a lot of expectation for future outlook. If the economy really is improving then aluminum demand should begin to pick up and Alcoa’s statements could give us some indication of that, or not.
Over the weekend the rally sparked by the U.S. NFP numbers continued. However, newly emerging fears of China slowing helped to depress Asian indexes. The Nikkei and the Hang Seng both lost about 1.4% in overnight trading. Europe did not suffer those same fears. The rally sparked by the strong U.S. numbers was aided by new developments in the EU bailout scheme centered on Greece. Regulators are satisfied with the current state of the bail out and have seemingly indicated that the situation is under control and that measures to keep it that way are on the table.
This week, on top of the important earnings from Alcoa we will also get the first look at how the banking sector is doing. We’ll get one or two reports from small regional banks mid week but on Friday Wells Fargo and JP Morgan are both on the schedule. Rising interest rates and an expanding housing sector are expected to reveal themselves in better earnings for the banks. The BKX is already breaking above a long term resistance and looks good to be a market leader for the remainder of the summer.
1. S&P 500 Earnings Bounce
S&P 500
Call/Put = Call
Entry = Below 1635
Expiration = 1 month
The S&P 500 has been bouncing higher from the support level of the previous all time high. At face value, based on the long term position of the market it looks like we are in the very early stages of a new secular bull market. I think earnings seasons will not change that. The trend of better than expected EPS on weakish revenue has already been seen this quarter with the “pre-season” releases by names such as Redhat, Winnebago, Micron and Conagra. This trend is one that I have been following for the last three quarters and one that is setting the market up for big upside surprises. Corporations are running lean, controlling costs and in good position to benefit from increased consumer spending.
The SPX is indicated up at this time with buy signals on the daily charts. Longer term there is resistance ahead located around the new all time highs. Once the indexes reach that level there is chance for correction or reversal but until then the market looks really good to move higher. I am trading calls on the S&P 500 with a target entry below 1635 and one month expiry.
2. Apple In The Second Half
AAPL
Call/Put = Call
Entry = Below $420
Expiration = One Week
Apple is likely going to surprise investors in the second half. The stock is well undervalued based on future earnings potential. Even with slowing revenue and earnings Apple is still a corporate giant and expected to earn around $10 per share this quarter. Technically Apple is at a bottom on the daily charts and indicated higher at this time. I am entering a short one week trade on Apple to try and capture early earnings season euphoria with the intention of entering again before the release of Apple earnings in a few weeks. I am trading a call on Apple with an entry below $420 and one week till expiration.
3. Financials Leading The Way
Bank Of America
Call/Put = Call
Entry = Below $13.50
Expiration = One Week
The financials have been performing well all year and should keep moving higher. Not only is there expectation for increased earnings and profitability there is also the technical pressure of a Banking Index making a break higher. Higher interest rates and a growing housing sector should result in better than expected earnings for Bank Of America. Not only that but more jobs and more people working will also result in more deposits, higher balances and more fees for BAC. I am trading a call on BAC with a target entry below $13.50 and one week till expiration.
4. Gold Is Dead Weight
Gold
Call/Put = Put
Entry = Above $1230
Expiration = Week
Gold may have an attractive price at this time but the technicals do not support long term buying. I’m not saying that physical buyers of gold won’t profit long term, just that there is likely going to be a much better time to get in. I am expecting gold to break below the $1200 level at any time now and make a move to my new lower targets around $1100-$1125. Because of this I am trading puts on gold with a target entry above $1230 and one week of expiration.
5. Abenomics Long Term Vision, Long Term Trade
USD/JPY
Call/Put = Call
Entry = Below 101
Expiration = One Month
The yen is still sliding. The plan put in place by Abe and Kuroda is long term, with an outlook several years out, so we should expect this trade to unfold over several years. The recent correction to 95 was only a short term dip and merely provided an opportunity for profit taking and new long positions. I am trading calls on the USD/JPY with one month of expiration and a target entry below 101.
More Tips by the Geek – 7/08-15/2013 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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