Tip from the Geek 02/02 – 02/09/2015: Will The Trend Hold
Top 5 Weekly Binary Options Trading Signals by the Geek
Last week’s selling was a little worrisome …. especially if you are a bull. The sell off in US equities was driven by weak data and fear of slowing growth but let me tell you, the data was rear looking, expected and leading to a pick up this year. Not only that the FOMC meeting came and went barely causing a ripple. Their outlook and statement was not enough to lift bullish spirits as it has been in the past. What I want you all to remember is that one month, and one quarter, do not make a bearish trend. Especially when that quarter was expansionary, saw robust growth in labor and the consumer, is coming off a quarter of strong growth and is preceding a 6 month period highlighted by positive expectations. What I’m trying to say is not to worry too much about December data until January data confirms that we are in fact slowing.
Speaking of January, the first indications are that there has been a pick up in activity in the US. Preliminary reads on manufacturing and sentiment as well as a sharp decline in jobless claims allude to that fact. This week will be more important for traders but still filled with volatility. There is quite a bit of data due out and not all of it “forward” looking. By forward I mean data for January and Q1, as opposed to data from December and Q4. The mix is what will cause volatility because I expect December data to be a miss, and January data to be a hit and in the end the long term trends to be held.
This week is also big for earnings. There are roughly 1000 S&P 500 companies reporting this week with an emphasis on energy and consumer goods. The really good news on the earnings front is that releases from Chevron and Exxon are well above expectations and helping to alleviate bearishness in the oil sector. Speaking of oil, oil prices are rebounding with a growing chance of a short covering rally. Short interest in the commodity is high and could easily result in a 5 or 10% surge in prices.
1. Bearing Down On The Market
S&P 500
Call/Put = Call
Entry = Below 1995
Expiry = One Week
My Trading Advice
The S&P 500 has been falling on weak December data. This data is leading to fear of economic slow down but do not mesh well with more forward looking indicators of the economy. For one, labor trends continue to improve. While labor improves the consumer improves and by extension the economy improves. For another forward looking surveys of business and estimates of 2015 expectations suggest that the next 6 months are going to see continued if not improved growth. To me, at least, this means that any declines in the market are entry points and not signs of reversal. Of course reversal could be coming, it’s just not indicated yet.
As I said, the sell of is a concern but until a break of trend is confirmed this is just one more entry for long term bulls. Expect more volatility during the week but a firming of the market towards Thursday and Friday as the labor data is released. The index is still trading above long term support and in line with the trend, with indicators supportive of that trend, so I am trading a call. My target entry is below 1995 with one week until expiry.
2. Gold Consolidates
Gold
Call/Put = Call
Entry = Below $1275
Expiry = One Week
My Trading Advice
Gold prices are now data dependent. Data may show that the economy is not growing as fast as some had hoped, but it will show that the FOMC is on track to raise interest rates this year and that will support the long term view of gold. Near term weakness has presented a chance to get back in ahead of the jobs data later this week. Gold is rising on strong momentum. Regardless of the near term drop prices are indicated to retest recent highs in the least. I am trading a call on gold with a target entry below $1275 and one week until expiry.
3. Winding Up For A Euro Slide
EUR/USD
Call/Put = Put
Entry = Above 1.1300
Expiry = One Week
My Trading Advice
The Euro hit a new low against the dollar a few weeks ago when the ECB enacted its surprise QE. Now the pair is in consolidation and winding up for another move lower. Near term economic weakness has lifted the pair by weakening the dollar but will not last. The labor data this week will support the long term trend, and if it doesn’t then the trend may be over. I am trading a put on this pair with a target entry above 1.13 and one week until expiry.
4. Double Bubble Oil In Trouble
USO/Oil ETF
Call/Put = Call
Entry = Above $18
My Trading Advice
Oil has been sliding on rising stockpiles, increased production and weak demand outlook. The last two days it has been climbing with the chance of a real serious short covering rally steadily growing. Signs are emerging that production will slow next year, and economic trends are going to support demand growth. These three factors together may contribute to an extended rise but I am not yet calling a bottom. What I am doing is trading a call on the USO, with a target entry below $18 and one week of expiry to try and capture this short term move. As of this time the indicators are very bullish and convergent with new highs.
5. Exxon Blows Them Away!
XOM
Call/Put = Call
Entry = Below $88
Expiry = One Week
My Trading Advice
Exxon blew away its earnings estimates and is now moving higher. This is the second of the big oil companies to do so and is going to have a positive impact on earnings trends. I am trading a call on Exxon with a target entry below $88 and one week until expiry.