Tip from the Geek – Top 5 Binary Options Trading Tips 03/24-31/2014
And Life Goes On
Russia annexed the Ukraine, China PMI is below 50 again and yet life goes on. President Obama and President Putin exchanged sanctions in a near pointless show of political might. What was the result? The Ukrainian bases over run by Russian forces remained in Russian hands. In China flash PMI was reported at just over 48, an 8 month low and another month of contraction in that country’s manufacturing sector. The result here? Asian markets, in particular Chinese markets, surged more than a full percent on the hopes and expectations that stimulus would soon follow. How did these two events affect the European and American markets? Mixed, European indices traded in the red early on Monday while U.S. futures pointed to a positive, if mild, opening.
Why is this? I think it is because that regardless of near term issues the longer term trends are up. Yes China is slowing and is still a major point of worry but still just that, a point of worry. One that will help to make up the proverbial “wall of worry” the bulls like to climb up. Last week Janet Yellen’s comments and the FOMC policy statement helped to spook the markets a little but also provided an insight into the Fed’s view of the economy; things are on track and getting good enough to expect an end to QE late this year/early next year and an interest rate hike sometime in the late spring to early summer. That time frame coincides with the yearly market cycle and would give us a rate hike as the spring/summer economic uptick begins to happen.
1. I’m Still Bullish
S&P 500
Call/Put = Call
Entry = Below 1870
Expiration = One Week
My Trading Advice
I am still bullish on the S&P 500. The long term trends are up and the index is setting up for a break out provided the data this week is OK. I say OK because I do not have high expectations for the data but I think it will support the view that the economy is OK, the winter dip in activity is over, the weather effect is limited and that the spring is going to be a lot better. Over the last two weeks the economic data in general has been better than expected and/or in line with that expectations. I want to point out that this was expected the whole time, the winter fears were just that, winter fears and yet another brick in the wall of worry.
This week has, not a lot, but some important data. Monday’s calendar was clear but starting on Tuesday important housing data in the form of mortgage index and Case-Shiller report on real estate markets. Later in the week there is more housing data, New Home Sales, followed by Durables, jobless claims, pending home sales, Michigan Sentiment and the final numbers for 4th quarter GDP, last year. The S&P 500 is setting up for an early buy signal but still has a little resistance to clean up. I expect that as the week wears on the index will move up to at least challenge new highs, if not set them out right. I am trading a call on the S&P 500 with one week until expiry and a target entry below 1870.
2. Apple Moving
Apple
Call/Put = Call
Entry = Below $540
Expiration = One week
My Trading Advice
Apple is on the move. The tech giant, who has been receiving a lot of flack over the past year and is now involved in some form of wage fixing scandal is on the move. The stock has built a nice base of support along the $525 level, a level I would not be surprised to find out is supported by Icahn and Soros. Now the stock is on the move again and indicated higher. I am trading a call with a target entry below $540 and one week until expiry.
3. Yearning For Yen
USD/JPY
Call/Put = Call
Entry = Below 102.50
Expiration = One Week
My Trading Advice
The USD/JPY is being wound up between the taper, U.S. QE, BOJ QE, the upcoming Japanese tax hike, U.S. and Japanese economic data and the Ukrainian flight to safety trade. Needless to say there are a lot of factors at play. I am still in the camp of long term bull on this pair and see it breaking out of the current chart pattern very soon. I am trading a call on the pair with a target entry below 102.50 and one week until expiry.
4. Gold Is Still Rusty
Gold
Call/Put = Put
Entry = Above $1325
Expiry = One week
My Trading Advice
Gold made a nice recovery driven on the weak winter data and the blossoming Ukrainian Affair. Now, the data is picking up, the taper is moving forward and interest rate hikes are expected as soon as 12 months from now. This took the steam out of the trade and has sent gold crashing about 5-6% over the past week. I am sticking to my long term bearish position on gold and trading puts this week. My target entry is above $1325 with one week until expiry.
5. Oil Caught Between A War And A Soft Spot
Oil ETF
Call/Put = Call
Entry = Below $36
Expiry = One Week
My Trading Advice
Oil prices are caught between the situation in Ukraine and the soft data in China. On the one hand war is bad and could cause a lot of problems for the oil markets. For another China data is having an impact on global demand outlook for the year. My view; peak oil is happening now, less is coming out of the ground, it’s harder to find and we still use a whole lot of it. Oil prices are going up in the long term. This week, I think up as well. U.S. data should help to lift spirits. I am trading a call with a one week expiry and a target entry below $36.
More Tips by the Geek – 03/24-31/2014 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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