Tip from the Geek – Top 5 Binary Options Trading Tips 11/04-11/2013
Easy to understand Binary Options Trading Advices. Try Trading on CommuniTraders!
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Liquidity Driven Markets
Liquidity is driving the markets higher. Last week the FOMC revealed that QE was still firmly in place with no visible end in sight. This week the ECB is expected to to do the same thing. Some weaker than expected data and below target inflation is leading some speculation that the ECB could be increasing QE, some say as early as this week. Inflation in the EU sank to 0.7%, ECB target is 2.0% so it does appear as if some more stimulus could be needed. Even so, other gauges of the economy in the EU and around the world are still showing improvements. Combined with the ever flowing river of cash being pumped into the global economy I can only see the market moving higher.
There is still some concern that the U.S. government shut down last month will have some lingering effect on the economy but I don’t think so. Business spending among private companies fell by -1.3% in September, not counting aircraft and military spending, a small concern but other data tells a different story. Manufacturing is expanding at a robust pace, data released last Friday is at a 2 1/2 year high and factory orders increased by 1.7%. Manufacturing activity in the EU and construction in the UK also picked up last month. At the same time conditions in Asia are improving as well. The most recent example is expansion in the services sector reaching a 13 month high.
1. S&P 500 Rising
S&P 500
Call/Put = Call
Entry = Below 1770
Expiration = One Week
My Trading Advice
The U.S. markets have no where to go but up so long as the Fed keeps pushing money into the system. This should hold true so long as QE is on and tapering has not begun. Near term noise will drive the shorter term rallies and pull back until the underlying fundamentals are changed. This week we will finally get back on track as far as economic data is concerned. Shut down related delays have finally worked their way through the system with this Friday’s release of NFP the last on the list.
Long term the SPX is very bullish. The index is making new highs and indicators are pointing up and rising. In the nearer term the index is holding at or near newly set all time highs with overbought conditions diminishing. There is some concern for the longer term because of divergences that have been developing. But as of now there is still no sign of reversal. The debt ceiling will reemerge as a barrier to the market in only two months and tapering will start sooner or later, either of which could . Until then I am bullish on the SPX and trading calls with weekly expiration and a target entry below 1770.
2. DAX Getting A Cash Boost Too
DAX
Call/Put = Call
Entry = Below 9050
Expiration = One Week
My Trading Advice
The DAX is rising on the global cash induced rally just like the U.S. markets. This week the ECB could give it another boost. The central bank is meeting on Thursday and expectations are high there will be an increase to QE policy already in place or at least an indication that it could increase in the near future. On the daily charts the index is pushing new highs on an almost daily basis with bullish indicators. I am trading calls with a target entry below 9050 and one week until expiration.
3. Don’t Bet On Gold
Gold
Call/Put = Put
Entry = Above $1315
Expiration = One Week
My Trading Advice
I am still not betting on higher gold prices. The metal is just too volatile and with QE so firmly in place prices are under heavy pressure. Adding to that is declining demand for the physical metal. India, one of the largest consumers of raw gold is turning to silver because they see it as a better value. Until QE ends I expect gold prices to remain at or near low the current low levels. In the near term I see gold retesting the recent lows below $1300. I am trading a put on gold with a target entry above $1315 and one week until expiration.
4. Yen Slide Beginning Again?
USD/JPY
Call/Put = Call
Entry = Below 98.65
Expiration = One Week
My Trading Advice
The USD/JPY pair is moving back up from the key support level of 98. The pair has been consolidating around this level for months and may have begun another longer term movement higher. In the nearer term the index is indicated bullish and rising so I am looking for the pair to move up toward the upper end of the 4 month trading range around 100. I am trading calls on this pair with a target entry below 98.65 and one week until expiry.
5. More Euros On The Way
EUR/USD
Call/Put = Put
Entry = Above 1.3500
Expiration = One Week
My Trading Advice
The ECB is meeting this week. Expectation is high the central bank will increase or at least make statements that will lead to an increase in QE for the EU. This will only help to further weaken the currency versus the dollar and continue the downward movement begun last week. This pair is falling hard from the top of it’s long term range and is indicated lower on the weekly and daily charts. I am trading a put on this pair with a target entry above 1.3500 and one week until expiration.
More Tips by the Geek – 11/04-11/2013 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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