Tip from the Geek – Top 5 Binary Options Trading Signals 06/16-23/2014
Iraq Civil War In Focus
They haven’t officially labeled it a civil war yet but the violence in Iraq is largely expected to result in three new countries, one Kurdish, one Sunni and one Shiite. What will this mean for the markets in general and oil prices in particular; most likely some volatility in both and that is what we have seen. At this time reports say that at least 90% of the Iraqi oil infrastructure is not in danger at this time. What this means is that high oil prices are the result of fear and speculation, it also means that they could come down just as quickly as they have gone up. In other oil industry news Russia has apparently cut off supply to the Ukraine in what looks to me like a financial attempt to attack the country. The last report I read stated that Russia will now be requiring prepayment for natural gas and oil going into the country.
Obviously there is a lot going on in the world politically. There is also a lot going on in the world in terms of the economy and the market. News out of Asia and Europe was pretty quiet early Monday, Iraq was definitely in focus. Things began to pick up once the US markets began to open and economic data was released. The first thing to hit the wire was Empire State Manufacturing Index. Manufacturing data is better than expected and shows that employment trends in the Empire State are still positive. Later in the morning a downgrade of US growth expectation from the IMF failed to give the market pause. On tap for the week is an FOMC meeting on Tuesday/Wednesday and triple witching options expiration on Friday. For those of you who don’t know what triple witching is it is the Friday that happens once per quarter in which equity, futures and index options all expire at once. It is a well known cause of market volatility.
1. Buy The Dips, Sell The Rips
S&P 500
Call/Put = Call
Entry = Below 1935
Expiration = One Month
My Trading Advice
The S&P 500 has made a dip from the most recent all time high driven by fears stemming from Iraq and higher oil prices. The Iraq thing is most likely nothing more than a blip on the technical radar but none the less something to keep an eye on in the near to short term. Despite the risk brought into the market by the Iraq violence the long term trends are still up and this is going to turn into yet another buying opportunity for long term bulls. The Ukraine situation was just as “important” in terms of the near term news and effect on the markets but how much affect is it having now. I suspect this Iraq development will be just as much a non issue in the next month or two.
In terms of the trend the index is still well above the trend line and above the short term moving average. The drop in prices caused by the eruption of the Iraq tensions was very mellow and now finding support. Just today, Monday when I write this, economic data supporting the long term trend reversed the early trade and sent the index into the green. I am trading a call on the SPX, in line with th long term trend, but with one month until expiry. Even though I have faith the market will rise in the long term it is hard to say what will happen tomorrow or this week that may cause more volatility. My target entry will be below 1935.
2. Beware The Flight To Safety
Gold
Call/Put = Put
Entry = Above $1280
Expiry = One Month
My Trading Advice
Gold prices are rising as traders flee into the relative safe haven. The thing is, this flight is based on head line fears and not actual threat to Iraqi oil. Gold prices will fall in line with the long term trends soon, when is not really clear but soon. Once Iraq fades and the economic data becomes headline again is a good time to expect a drop, the FOMC may be able to do this when they release policy on Wednesday. I am trading a put on gold but with one month of expiry as with the SPX trade in order to give the metal time to weather the Iraq flight to safety and move back in line with trends.
3. Burst Your Oil Bubble
USO
Call/Put = Call
Entry = Below $39.95
Expiration = One Week
My Trading Advice
Oil prices are inflated on a serious perceived threat to Iraqi oil infrastructure. This will probably keep oil prices higher this week at least and the USO in turn. Once folks realize that Kurdistan, where most of Iraq’s oil comes from, is relatively safe oil prices will fall. Until then I am trading a call on the USO with a target entry below $39.95 and one week until expiry.
4. Calling Up The Dollar
USD/JPY
Call/Put = Call
Entry = Below 102
Expiration = One Week
My Trading Advice
The USD/JPY moved lower last week on a flight to safety driven by the Iraq situation. Like the other safety havens I expect this one to last not very long as well. One reason is that the FOMC is meeting this week and should provide dollar strengthening news. The taper should be continued and their view of the economy should be positive. This dollar strengthening move should combine with Abenomics as-is to move the pair up to the top of the range. I am trading a call on the pair with a target entry below 102 and one week until expiry.
5. Pieces Of Apple
Apple
Call/Put = Call
Entry = Below $91.50
Expiry = One Week
My Trading Advice
Apple was volatile last week as I expected, following the stock split last Monday. The shares are finding support around the $91.50 and appear stable into the near term. I am trading a call on the stock with a target entry below $91.50 and one week until expiry.
More Tips by the Geek – 06/16-23/2014 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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