Weekly Binary Options Trading Briefings 10/29-11/3/2012 – Stocks Lower as Corporate Earnings and Economic Data Fail to Inspire
Binary Options Trading Recommendations for the upcoming week – Market Information and Trading Tips
The S&P 500 posted declines on the week and most US stock shares followed suit, as markets assessed various economic data reports and corporate earnings releases which failed to inspire and left markets heavy. Some of the bigger downside moves could be seen in Goodyear and Verisign which lost 10% and 15%, respectively, while one of the more positive stories could be seen in Expedia which rose by 15% after a better than expected earnings release.
The overall trajectory was clear, however, with eight decliners for every five gainers in US equity markets but the S&P 500 did manage to close above 1410 with a weekly decline of 1.5%. The US benchmark is lower by 2% so far for the month and trading volumes were slightly below quarterly averages as some investors are seen waiting on the sidelines in order to get a clearer picture before committing to new positions.
Macroeconomic Data
Looking at the economic, the latest US GDP numbers (3rd quarter) were made available, expanding by more than analysts were expecting. These improvements came largely as a result of better consumer spending and larger numbers in residential property developments. The University of Michigan consumer sentiment survey was another positive, rising to 82.6 for the month of October (from 78.3 previously) but this was still slightly lower than market estimates.
In Europe, the news was more of a negative, with the unemployment rate in Spain reaching a new all time high above 25%, the German IFO coming in weaker than expected and the German Finance Minister (Schaeuble) expressed doubts relative to Greece’s ability to meet the requirements that have been established by the EU and without these moves, Greece will be unable to secure additional bailout funding and likely add to the region’s general uncertainty level.
In commodities, oil prices saw some stabilization after weather reports showed that hurricane activity in the US could pose some obstacles for overall productivity levels. The much-discussed “Frankenstorm” story helped to balance bearish inventory supply data, helping to support oil prices after recent declines. The October 24th data from the Energy Department showed that inventories rose by 5.9 million barrels last week – now seen above 375 million barrels. This is the highest inventories level ever reported for this time of year and this likely would have led to further downside extensions without the massive storm warnings.
My Trading Recommendations in 50 words
1. The fundamental and technical picture in oil is starting to show some opportunities with prices now seen at the 61.8% Fibonacci retracement of the long term rally from 77.30. As long as the storm story remains in the news, prices should be supported, and I will enter into weekly CALL options at current levels.
2. The USD/JPY is giving another opportunity for CALLS with the latest drop and after taking gains on the previous week’s trades I will be looking to re-enter this position at 79.20. This idea can be used for either weekly or monthly CALL options.
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