Tip from the Geek – Top 5 Binary Options Trading Tips 8/12-19/2013
Easy to understand Binary Options Trading Advices. Try Trading on CommuniTraders!
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U.S. Market Settling Down To Support
Taking a look at the charts of the SPX it looks like the index is settling down nicely to a long term support zone. This zone includes a moving average, a trend line, a support line, a Fibonacci projection and several different envelope studies I checked. I think it is no coincidence that the index is at this support level at the current time. We have emerged from earnings season, we have had the first read on the first half GDP and we have (at least in my opinion) factored tapering into the picture. Now we are facing the first week of U.S. macro data since the last FOMC meeting. This week could do a lot to help or hinder the rally, I think it will mostly help.
The week started off a little shaky. Japan released 2nd quarter GDP figures that were below expectations. The release tanked Japanese markets but leads me to speculate on when there might be more Japanese QE; maybe pretty soon. China may be adding some more QE to its programs as well, according to reports on CNBC. Shares of Chinese stocks soared in the Monday session. European indices were not so exuberant in their reaction. Weak economic data is not a reason to rally but perhaps they (Asia and Europe) are in the “bad news is good news because of QE” phase the U.S. markets were in earlier this year.
In the U.S. traders are expecting a slew of economic data. A handful of reports are expected from the real estate sector as well as manufacturing, employment, trade and inflationary data. Earnings are still rolling in too. This week is full, not nearly as full as last, but there are not any earth shattering or market moving reports on my radar now.
1. The S&P 500 is Sitting on Strong Supporting
S&P 500
Call/Put = Call
Entry = Below 1690
Expiration = One Week
My Trading Tip
The S&P is sitting on strong support. Regardless of taper fears the U.S. economy has been recovering and growing. The expectations are for that growth to continue and expand in the second half of the year, the half of the year we are in now. This support can be seen in many ways. One is in the record amount of inflows reported for U.S. equity funds last month. Another is in the convergence of support indicators found on the charts.
The SPX is currently trading right round 1690. This level has emerged as support over the last month. The index first traded above that level in mid-July and has since consolidated and bounced from it. This consolidation has produced a 4 week sideways trend in the index that has relieved overbought conditions and helped to produce a short term bearish peak in momentum. I am trading calls on this index with a target entry below 1690 and one week until expiratio.
2. Germany Will Grow in the Second Half
DAX
Call/Put = Call
Entry = Below 8350
Expiration = One Week
My Trading Tip
The German index has been consolidating along the 8200-8300 level over the past few weeks. This move is similar to the one observed in the SPX. The German markets are preparing for the expected growth spurt predicted for the second half of the year. So far economic data from the greater EU region is promising and points to the expected rebound. The data may still provide some near term volatility but the longer term looks bullish for this index. I am trading calls on the DAX with a target entry below 8350 and one week until expiration.
3. Japan May Need More Stimulus
USD/JPY
Call/Put = Call
Entry = Below 97
Expiration = One Month
My Trading Tip
The Japanese government released 2nd quarter GDP figures that were not what the market was expecting. The Abe plan is working, growth is improving, but not as quickly as he and others may have hoped. If they are to reach their targets it may be necessary for Abe and Kuroda to increase QE efforts. Regardless, the market believes that something else is coming, the USD/JPY is winding up into a nice triangle. This wind up has been building for over a month and has a potential target over 110 yen per U.S. dollar. I am trading calls on this pair with one month until expiration and a target entry below 97.
4. Euro Drops From Resistance
EUR/USD
Call/Put = Put
Entry = Above 1.32930
Expiry = One Week
My Trading Tip
The Euro hit the top of a six month range and quickly fell. The EUR/USD pair is now below previous support and indicated lower. The European economy is expected to improve over the next few months but a stronger dollar will keep the pair down, at least within the range. Unless of course there is some change to fundamentals through ECB or FOMC policy. I am trading a put on this pair with a target entry above 1.32930 and one week until expiration.
5. Apple To Reveal New iPhone
Apple
Call/Put = Call
Entry = Below $465
Expiration = One Week
My Trading Tip
Apple announced today that it would reveal the new iPhone next month. Even if the stock had not been rallying lately I would expect share prices to climb on this news. I am trading a call option on Apple with one week til expiration and a target entry below $465. After this position closes I will reevaluate for another play.
More Tips by the Geek – 8/12-19/2013 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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