Tip from the Geek – Top 5 Binary Options Trading Tips 6/24-7/01/2013 – Also on CommuniTraders!
Easy to understand Binary Options Trading Advices. Try Trading on CommuniTraders!
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Markets Are Correcting
The global markets are the middle of a mass correction. Years of loose fiscal policy and a shaky economic recovery may have reached the end of the 5 year run. Even though U.S. data is improving other world economic centers are not looking as good. Growing fears of Chinese credit issues were set afire at the start of this weeks trade, sending Asian markets more than 1-2% lower. This drop was no doubt set up by the drop in U.S stocks last week and the tapering forecast given by the Fed. While not directly related both instances have global ramifications with the potential to turn the world markets.
My previous bullish sentiment was put to the test last week and failed. The long term trend in the S&P 500 has been broken, putting the market into a deeper correction than anticipated. The S&P fell more than 3.5% Thursday and Friday and more than 5% since hitting its peak just last month. However, because the index has entered a deeper correction does not mean that a bear market has started. The Wiki definition of a correction is a short term price decline of 5-20% or so, not enough to be a bear market. Corrections can happen in bull or bear markets and are a natural part of market functions. What does this mean for us? That the S&P has completed the text book definition of a correction, an event that many market participants have been waiting for.
1. S&P At Long Term Support Ahead Of Earnings Season
S&P 500
Call/Put = Call
Entry = Below 1570
Expiration = Three Days
My Trading Advice
As I have said, the SPX long term trend is broken. This break is also testing the long term support of the previous all time highs. Indications are bearish but heavily oversold in the mid, short and near terms. Support is not truly broken yet but I think it is a question that will be soon answered. There is another technical support associated with the 1590-1600 level- the bottom of a 7 week consolidation range prior to reaching new highs. Adding to the support case is the 150 day EMA which has just crossed the 1590 level and is only a few points lower than the early Monday lows.
What I have my eye on now is earnings season, which officially starts in 3 weeks with Alcoa but has really started last week with Oracle, Redhat, Micron and a host of other tech companies. So far reports are as mixed as they have ever been but signs are still pointing to better earnings on lower than expected revenue and a mixed outlook. I think the long term average will prove to be a point of support, if only in the short term, as the longer term investing community picks up cheap good stocks. I am trading a 3 day call on the S&P 500 in order to make sure it closes before the end of the week. Target entry is below 1570 with a three day expiration.
2. Gold Could Go Lower
Gold
Call/Put = Put
Entry = Above 1285
Expiration = Week
My Trading Advice
Gold is looking real bearish with its recent break below my previous target of $1326. Adding to the bearish momentum is a new down grade in long term gold prices. The new GS target for gold at year end is $1300. On a technical basis gold is indicated much lower than that, not to say that gold prices won’t end the year around $1300. For now, my new downside target is $1200 based on my indicators and projections. I am trading a put on gold with a target entry above $1285 and a one week expiration.
3. Asia Providing A Re-Entry Into The Yen
USD/JPY
Call/Put = Call
Entry = Below 97.50
Expiration = One week
My Trading Advice
The credit crack down in China that sparked the decline in Asian stocks has also provided a good re-entry point for a USD/JPY call. The pair is trading just under resistance with bullish indicators, including the Time Series Forecast. This indicator is confirming the bounce from 95 and the longer term trend in the USD/JPY. There is still some resistance ahead so I am keeping my expiration time tight. I am trading a call on this pair with a target entry below 97.50 and a one week expiration.
4. Euro Has Sold To Support
EUR/USD
Call/Put = Call
Entry = Below 1.310
Expiration = Three days
My Trading Advice
The EUR/USD has sold off to a long term support level since the FOMC release last week. This level is in mid-range compared to the last 6 months or so and an important one for binary traders. This level is the line at which the pair found resistance three times, broke above once and is now indicated as support. The pair is oversold here and adding to that is the extreme level of the pair in comparison to the TSF line. I am trading a short term call on the EUR/USD with a target entry below 1.3100 and a three day expiration.
5. Banking On JP Morgan
JPM
Call/Put = Call
Entry = Below $50.50
Expiration = One Month
My Trading Advice
The banks are not being sheltered from the recent financial storm. In fact, they have been hit pretty hard. However, with rising interest rates in the housing sector they are looking good for increased earnings in the current and future times. JPM is sitting on a long term support and extremely oversold, I think this is a good time to get into this one again on an early play for earnings season. I am buying a call on JPM with a target entry below $50.50 and a one month expiration.
More Tips by the Geek – 6/24-7/01/2013 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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