Binary Options Trading Recommendation for this week – Market Information and Trading Briefing
Equity markets in the US closed higher for the sixth consecutive week, creating the longest rallying period in the S&P 500 since the beginning of last year. The improved market sentiment came from strong economic reports that bettered analyst forecasts and positive stories out of the Eurozone, where the German government showed agreement for the ECB’s proposed stimulus program.
This stimulus would come mostly in the form of bond purchases in troubled regions, and this helped convince investors that there continues to be constructive agreements at the official level. In stock specific news, Apple (AAPL) rose by more than 4 percent on the week, surpassing the $600 billion mark (an all-time high for the company), to continue in its position as the move valuable company in the world.
These gains were inspired by market speculation that the company has began production on its smaller iPad model. The tech sector was one of the central areas in this week’s rally as Cisco Systems (CSCO), which is the largest producer of the computer networking items more than doubled the weekly performance from Apple and rose by nearly 9 percent on the week. These gains came from a strong corporate earnings report which showed that overall sales beat analyst expectations.
S&P 500 Pushing to New Yearly Highs
Taking a step back, we can see that these latest gains in the S&P 500 (roughly 1 percent for the week) have pushed the index to new yearly highs near the closely-watched 1420 level. This equates to a gain of 13 percent from the levels seen in January while the Dow Jones Industrial moved ahead to trade just below the 13,280 level. The Volatility Index, as measured by the Chicago Board Options Exchange is now seen below 13.5, which is the lowest level in 5 years. Declines in volatility tend to be positive for stock markets (other than consumer staples) and in high yielding currencies.
Looking ahead, market focus next week will turn to housing data out of the US, as Existing and New Home Sales will be released on Wednesday and Thursday. This will be followed on Friday with the Durable Goods orders report, which is expected to show a stable rise to 2 percent. Last week’s economic data was a source of optimism for the markets, as Industrial Production numbers and consumer confidence surveys came in stronger than expected, so given the elevated levels of prices at the moment, we will need to see some strong releases to carry the momentum.
My Trading Recommendation in 50 Words
Despite the market optimism present now, we are coming into some expensive territory and I am looking for a downside correction. I will be looking to bet against any rally in the DAX into the 7130 area, taking one day PUT options on the index.