Tip from the Geek 05/18-25/2015: Still Trying To Make A Break Out
Top 5 Weekly Binary Options Trading Signals by the Geek
The market is still trying to make a break to new highs but there is a lot weighing it down. Last week’s data was not as expected and may have added another leg to the FOMC driven rally. The combination of weak PPI and great jobless claims created a perfect storm that keeps the Fed from raising interest rates, weakening the dollar and lifting markets from gold to equities. The market is now simmering on the edge of a break out that if continued, will lift it many percentage points higher. The only caveat is the there is lingering weakness from the winter slump and that weakness is being seen around the world. All we really need is a spark of hope to set what are already positive future expectations into motion.
This week there is quite a lot of data that could move the market but after last week my eye is on the CPI. Last week’s PPI was the spark setting of last week’s rally, CPI could add to it. Together they may even point to no interest rate hike this year, the first time I have entertained that thought. If this happens the dollar will tank, I’ll be a seller at any rate, because there just won’t be any reason for the dollar to strengthen. Other points of interest will be the FOMC minutes, housing data, at least two releases on regional manufacturing and the leading indicators.
1. S&P 500 Sets A New High!
S&P 500
Call/Put = Call
Entry = Below 2,120
Expiry = One Week
My Trading Advice
The S&P 500 is breaking out to a new high. The fall in dollar value last week has helped to change sentiment and taken away at least one major headwind to earnings. This will help reenforce current expectations for earnings to rise later this year. The downside is that there is little sign of economic expansion at this time, except in the labor market, so it’s been hard for the market to stay positive. Especially with so much day to day news such as Greece, ISIS, Libya, Iran, the Ukraine and Russia still there to raise fears.
Looking to the technicals it is easy that the trend is still up. Not only that, the S&P 500 is making a good trend following signal with confirmation from many sources. The index is moving up, from the trend line, with positive and bullish indications from the MACD and stochastic. This signals is very strong and one that can be followed up with numerous entries on short term charts. I am trading a call this week with a target entry below 2,120 and one week until expiry.
2. Oil Still Doesn’t Look Good To Me
USO/Oil ETF
Call/Put = Put
Entry = Above $20.25
Expiry = One Week
My Trading Advice
The oil market still looks frothy to me, with little underlying support. Prices are up on many near term fears, fears spread out among the entire middle east and encompassing them all. This could carry on for quite a while but at the same time supply is high and demand is low. It’s only a matter of time before prices come slamming back to reality and the charts are in agreement with me. The signal is down, once the USO goes below $20 it will be heading lower fast. I am trading a put on the USO with a target entry above $20.25 and one week until expiry.
3. Gold Floats
Gold
Call/Put = Call
Entry = $1225
Expiry = One Week
My Trading Advice
Gold prices are rising on weaker dollar and soft economic data. The combination put gold up to a multi-month high and the indicators are pointing to higher prices still. Now that gold is pushing up through resistance in the $1220 region follow through buying and momentum could take it up to $1250 or higher. I am bullish on gold and trading a call, my target entry is below $1225 with one week until expiry.
4. The Time Line Is Broken
USD/JPY
Call/Put = Put
Entry = Above 119.75
Expiry = One Week
My Trading Advice
The FOMC time line is broken. Whatever expectation there was for a rate hike in June are gone, September is now in question and the back end of the spectrum is now in 2016. Without the FOMC to support dollar value improving economies in the rest of the world are going to send ripple through the FX spectrum. The USD/JPY has been in consolidation for many months around the 120 level with little indication of longer term direction but that has changed. Weak data means weak dollar so I am trading a put, target entry is below 119.75 with one week until expiry.
5. Momentum In The Euro
EUR/USD
Call/Put = Call
Entry = Below 1.136
Expiration = One Week
My Trading Advice
The euro is also being affected by FOMC policy, and also Greece. The dollar itself is losing strength because of the change in policy expectations, but the Euro is also gaining strength because of slowly emerging signs of recovery. Very slowly. Plus, The Greece debt issue is slowly coming to an end, one grueling step at a time, and will help to strengthen the euro as well. I am trading a call, with a target entry below 1.1360 and one week until expiry.
More Tips by the Geek – 05/18–25/2015 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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