Tip from the Geek – Top 4 Binary Options Trading Tips List 24-31/12/12
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HO HO HO, What Will Santa Bring To the Market This Year?
So far, Santa has been fairly kind to the US and world stock markets. November to December 2012 has brought us a near 100 point bounce in the S&P 500 and comparable bounces in the other major US indexes. On a global perspective the European and Asian markets are also trading at or near long term highs. Signs are pointing to possible continuation of these up trends but there are many things to consider. For one, the markets are trading at or near significant resistance levels. For another the Fiscal Cliff is still looming. At this point in the game there is no real chance short of a miracle that there will be a satisfactory end to the matter by year’s end.
On a positive note we will be ending the year with a long term up trend intact. I, and many others, have been looking for a possible top and end of the “most hated rally ever” as Rick Santelli dubbed it. On a technical note the end is near, just how near we can’t be certain of. There are still no signs of reversal, just the chance that we may see them soon.
Momentum in the markets has been in decline for over 12 months as global leaders have struggled with mounting economic issues around the world. Many of those issues have been hurdled with the final jump our own so called Fiscal Cliff. Getting past this could be the catalyst for another up leg in global equities. On the one hand there could be some relief driven rallying. On the other we will have the start of a new year and a renewed round of institutional and retirement driven investing. Plus, stocks are still really cheap and offer good returns for careful investors.
1. S&P 500, Christmas and the End of the Year
S&P 500
Call/Put = Call
Entry = below 1435
Expiration = daily, weekly
My Trading Recommendation
The S&P tends to trade up over the holiday week regardless of market direction. The sheer lack of serious volume makes it easy for prices to run up. The good thing is that this action will probably remain range bound and on the S&P 500 that means the 1430-1450 range right now. I expect market volumes to be incredibly light, especially on Monday and Wednesday. Thursday and Friday it might pick up but with Christmas in the middle of the week many traders may just take the whole thing off. Monday is also an early close, 1:00pm ET. Monday may prove to be a good time to get in with a small weekly close position then sit back and enjoy the holiday.
The S&P closed above 1430 last week which I think is important. This was important as resistance and since the rise above is now proving to be important again. I think this is the bottom of the holiday trading range and a good place to get into calls for weekly or daily expiration. Any drop down to this level, especially if it drops below this level, will be a great entry for calls. If the market moves up to the top of the range to quickly trading off intraday day lows will be good for hourly and daily calls.
2. Nikkei Driven By Avalanche of Yen
Nikkei 225
Call/Put = Put
Entry = above 9900
Expiration= end of the week
My Trading Recommendation
The Nikkei and Japanese stocks in general have been driven on the BOJ and Shinzo Abe. Their combined efforts, especially those of Abe, have sent the yen sliding versus the dollar and other major world currencies. The sudden weakness in the yen has caused the value of yen based equities to skyrocket. It’s simple; the more yen there are the more yen it takes to buy something.
So far the Nikkei trade has been driven more by expectations than reality. The reality is unfolding according to expectation and the selloff in Japanese stocks Friday tells me that investors are adjusting prices to fit that reality. I am recommending short term put trades on the Nikkei because of the massive black cloud candle that formed Friday. Any entry above 9,900 looks good for weekly closing.
3. Yen Consolidating, another Leg Up Is On the Way
USD/JPY
Call/Put = Call
Entry = below 84.50
Expiration = end of the month
My Trading Recommendation
The yen is sliding, just like the BOJ and the new prime minister want. The combined efforts of the two should result in what they want, a weak currency and favorable trade conditions for their export economy. The USD/JPY trade is in a classic uptrend and is now consolidating for another up leg. Currently at +12 month highs the yen has quite a long way to go before hitting anything near long term highs. Abe’s conviction that more yen are needed and the BOJ’s current support the yen is going to keep sliding.
4. Euro Topping Out At Resistance?
Euro/USD
Call/Put = Put
Entry = above 1.3180
Expiration = end of the month
My Trading Recommendation
The Euro made a strong move up over the last two months while Greek and Spanish debt issues were laid to rest. The move was driven as much by European easing measures as much as those enacted by the FOMC. Now that there is little reason to expect more easing anytime soon the currencies should stabilize. The Euro/USD trade is at resistance and forming a bearish candle signal confirmed by stochastic and MACD divergences. I am trading puts on this pair through the end of the month expecting the Euro to trade in a range between 1.3000 and 1.3250.
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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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