Tip from the Geek – Top 5 Binary Options Trading Tips 02/10-17/2014
Weak Data Bounce Back
Weak jobs data on Friday sparked a rally causing the major U.S. indices to bounce back from support. It looks like the market is still addicted to QE; bad data was good for the market. This is what I mean, weak jobs means the Fed may hold of on tapering, or even reverse it, if they think neccesary. The longer that weaker data persists the higher the chances of the taper being paused. All smoke and mirrors in my opinion and reason for near term volatility, not a reason to reverse the markets. The current economic slowdown is expected, the firs quarter was expected to be slower. Also expected, the later parts of the year, as soon as the second quarter, are going to be better. What does this mean for me? I am buying on the dip.
There is reason for some caution though. There are early signs of a long term bounce in major global indices but I expect some more near term volatility. In the U.S. newly sworn in Fed Cheif Janet Yellen testifies before congress. Her statements on the economy and the taper will be market moving, or at least market shifting. And then there is the next Debt Ceiling, predicted to be hit 2/27. In Europe, some key inflation reports are due out, particularly in the UK. For more on what might be moving your market check into Bogdan’s Top Five Market Movers Of The Week.
1. U.S. Markets Bouncing Back
S&P 500
Call/Put = Call
Entry = Below 1790
Expiry = One Month
My Trading Advice
The U.S. market have some headwinds but the long term trends are still up. The data over the last month has been less than expected, still positive and growing but not growing as fast as before. This is a not unexpected down turn and one not to concerning at this time. I will want to watch the data to make sure the slowdown doesn’t get worse, or last too long, but so long as trends remain the same the later part of the year should still be pretty good. In the near term hurdles faced by the market include Janet Yellen’s testimony before Congress this week, the Debt Ceiling we are projected to hit later this month, two months of weak jobs numbers and poor earnings growth expectations for the next quarter.
On the charts the S&P 500 is in an uptrend and currently bouncing from support. This bounce is confirming the uptrend and comes with an early buy signal from my two favority indicators, MACD and stochastic. Momentum is receding fast and could reach/cross zero any day now, stochastic is pointing up with both lines following an early bullish crossover. As I said, this is a weak signal in an uptrend so I am going to trade it with one month of expiry in order to give the market time to move past near term volatility. My target entry is below 1790 with one month of expiration.
2. Dollar Weak On Jobs
EUR/USD
Call/Put = Put
Entry = Above 1.3625
Expiration = One Week
My Trading Advice
The dollar softened some since the weak jobs number on Friday. The result was a move in the EUR/USD up to previous resistance around the 1.3650 level. At this level the pair is overbought with extremely weak momentum in the near term and looks to be drifting in the short term. Yellen testimony this week could move the market, or data from either the EU or the US. I am trading puts on the pair with a target entry above 1.3625 and one week until expiry. I will be keeping a close eye on the 1.3650 level, a break above here with proper motivation may reverse my short term outlook.
3. New Tax Looming For Japan
USD/JPY
Call/Put = Call
Entry = Below 102
Expiration = One Month
My Trading Advice
Recent bullish comments from the BOJ have driven yen value higher. However, the success of the Abenomics program is still in question, espeicially with the nationwide tax hike looming this spring. The current usd/jpy levels are an attractive entry point for those with a longer term bullish outlook. At this time the indicators are pointing to an early bullish signal, similar to the one in the SPX described previously and supported by candlestick action just above support. I am trading a call with one month of expiry and a target entry below 102.
3. Gold Pushing Resistance
Gold
Call/Put = Put
Entry = Above $1270
Expiry = One month
My Trading Advice
Gold prices keep drifting and are now retesting recent highs near the long term resistance around $1275. The recent fear of the economic slow down has been helping to drive the near term price direction of the metal. However, this slowdown is expected, the rest of the year is supposed to be good so I can’t help but maintain my bearish outlook on gold. I will temper it to a more nuetral version of bearishness (gold may be range bound or trade sideways) but bear I am. This week I am trading puts on gold but with one month until expiry. Economic data and the upcoming Debt Ceiling may impact gold prices until then. My target entry is above $1270, one month expiry.
4. Oil Prices Climbing
Oil
Call/Put = Call
Entry = Below $100
Expiry = One Week
My Trading Advice
Oil prices have been rising over the last few weeks. Global supply disruptions not withstanding the cold snap across the U.S. has a lot to do with it. Extended cold temperatures have caused some major shortages of heating fuels and other derivatives, shortages which have not yet shown up in the data. Last weeks oil and nat gas inventories reports showed much less draw down than expected. This may be because of lags in the data stream, if so these shortages should begin to show up this week. The shortages are expected to result in higher demand for crude from the refineries so that they may catch up with the demand, as well as get ready for the hot summer season ahead. I am trading calls on oil this week with a target entry below $100 and one week until expiry.
More Tips by the Geek – 02/10-17/2014 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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