Tip from the Geek 12/22–29/2014: Santa Claus Is Coming To Town
Top 5 Weekly Binary Options Trading Signals by the Geek
I can admit that it wasn’t looking good for a few days last week but the bulls finally came back. A combination of economic data, technicals and an FOMC meeting helped to spur the rally and sent the US indices skyrocketing. The S&P 500 alone moved nearly 50% in the last three days of the week, this is of course after falling a corresponding amount in the 2 weeks prior. In the end its the trend that matters and the trends are up. The technical trends are up and the economic trends are up, in the US. Around the world things are a little less rosy which is why I think I’m going to stick with the US indices for this weeks trades. Asian and European markets are also bouncing, driven in part by the US and also by rebounding oil prices, but I am still leery of price action over seas.
So, it looks like the Santa Rally has come to town, the question is, will it continue? I think so but that doesn’t mean it will necessarily continue this week. We are closing in on December 25th and a major global holiday. Not everyone celebrates, not even close, but enough do to have US and EU markets closed for part of the week, not to mention that the next week is New Years. Many many more global citizens celebrate this day so there will be even more market closings then. This means that we are entering seasonal holiday trading conditions. It’s hard to say just what exactly will happen, but is is safe to say that whatever does happen will be on light volume, subject to news and highly questionable until confirmed by trading in the new year.
1. Riding The Sleigh Of Profits
S&P 500
Call/Put = Call
Entry = Below 2075
Expiration = One Week
My Trading Advice
Last week the market made quite a significant bounce. It was possibly exaggerated due to quadruple witching options expiration but regardless, it was a bounce. A nice, strong, trend following bounce right off the long term trend line. The move took the index all the way back to the all time high by the end of the week and is looking like an extended moved higher could be in the works. With Christmas at hand, the market bouncing and the economic trends supporting it could be hard to get into this weeks trade but don’t worry, there will be other entries. I’m going to be getting in just as soon as the bell rings, I am expecting a nice pop at the open and so far, as I write this, futures are indicating it.
The SPX has been in a long term uptrend for the last two years. Over that time the index has made multiple bounces from the long term trend line that is currently in play. These bounces have been equal to hundreds of S&P points each and have offered dozens of excellent trend following entries. The indicators are currently in-line with the early trend following signal with momentum shifting to the bull side. There could be a pull back to support, or consolidation, that results in the stronger signal but it is no guarantee. I am trading a call with a one week expiry and target entry below 2075.
2. What To Do About Oil
USO/Oil ETF
Call/Put = Put
Entry = Above $21.50
Expiration = One Week
My Trading Advice
Oil prices hit a temporary bottom last week but there is just no sign that it will be permanent. There is some expectation that demand will grow in 2015 but there is more expectations that supplies will continue to outpace demand. New statements from OPEC member Saudi Arabia proof of that. Oil minister said that Saudi and OPEC would not be cutting production and may in fact increase it in order to maintain or grow market share. I am trading a put on the USO Oil ETF with a target entry above $21.50 and one week until expiration.
3. Not Quite Bullish On Gold
Gold
Call/Put = Call
Entry = Below $1200
Expiration = One Month
My Trading Advice
Gold is caught between a rock and hard place. Long term expectations for US economic strength and rising inflation are supporting prices while at the same time economic strength and rising dollar values are weighing it down. I put a high likelihood on long term views of strength and US inflation as winning the battle and pushing gold higher. This week could do a lot to help the bulls as there is some key economic data on the way, including the 3rd estimate for 3rd quarter GDP, an estimated that is estimated to be at or over 4% for the second quarter in a row. In the near term gold could go either way, based on the news du jour, until after the holiday. This week I am trading a call on gold, with a target entry below $1200, and one month until expiry.
4. Dollar Bounce Continues
USD/JPY
Call/Put = Call
Entry = Below 120
Expiry = One Week
My Trading Advice
The dollar is still gaining strength and will most likely continue to do so into the short term. The dollar itself is supported by economic trends and FOMC policy. The Euro and the Yen are both being weakened by their respective central banks with expectations for further policy action from the BOJ in the least. The USD has been bouncing versus the Yen for a week now, key support along the 30 day exponential moving average, and is moving higher in line with indications. I am trading a call on the pair with a target entry below 120 and one week until expiry.
5. Candy Apple For Christmas?
Apple
Call/Put = Call
Entry = Below $122.50
Expiry = One Week
My Trading Advice
Apple pulled back from a high a few weeks ago and offered up a nice little entry. The stock has moved up from the bottom formed earlier this month and now the the stock is sitting just above the 30 day moving average and indicating a buy. I am trading a call on Apple with one week until expiry and a target entry below $112.50
More Tips by the Geek – 12/22-29/2014 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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