Tip from the Geek – Top 5 Binary Options Trading Tips List 12-19/11/2012

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Fiscal Cliff, Dead Cat Bounce And A Possible Trading Range

Am I glad I waited until after the election before entering any trades.  That Wednesday drop was quite a surprise.  The fiscal cliff scenario that is unfolding has market participants concerned about what is coming down the pipe. This week could have some more downside, I am expecting volatility.  Senate and Congressional leaders are meeting in the White House with President Obama to begin working on a real plan to solve the impending crisis. For ultra-short term traders this a great chance to get into some weekly and daily trades so keep a close watch on your 30 minute charts.

 

There are a lot of reasons to fear the market is going lower.  The fiscal cliff for one, weak Chinese data for another.  All around the world conflicting and sometimes alarming data is beginning to emerge.  The stability in numbers I have been watching over the last few weeks and months has seemingly come to an end. The markets, and the economy, is in a time of transition.  Chinese leadership is changing, solutions to European debt crisis are questionable and at this time there is no clear solution to the fiscal cliff.

 

Surely European and our own leaders will solve these problems. They just can’t let the economy fail. The question, and what is driving the uncertainty at this time, is what will be done. A solution for Greece is at least on the table, the country itself has met the demands required for aid now they are just waiting for the IMF and European Union to come to an agreement. As for the Cliff, some form of compromise is in the works.  Both sides have points they are standing firm on and both sides have indicated a willingness to reach an agreement. The compromise will surely take a few rounds of negotiations and that will drive volatility as well.

 

Solving the fiscal cliff will take a lot of uncertainty out of the markets.  The Presidents plan to halt the middle class tax increases right away is a good one but one that may not come as soon as he would like. Republicans have their own agenda and will likely not concede such a big bargaining chip without something in return.

 

I still see some upside for the markets once the fiscal cliff is surmounted.  Until that time trading is likely to be very choppy and potentially range bound. I am betting on range bound.  No one wants to sell too soon and now just isn’t the time, in my opinion.  The S&P is down at the bottom of the potential range, right around 1380.  This has been an important sup/resistance line for some time now and grows in importance with each passing day.  So long as the markets remain above 1380 I will remain nuetral/bullish on the markets.

 

1. Fiscal Cliff Politics Driving Uncertainty

 

S&P 500

Call/Put = Call

Entry = 1380-1390 range

Expiration = End of the month

 

My Trading Tip in 50 Words

The S&P is at or very near the bottom of a potential trading range. I think it more likely, in this time of transition and uncertainty, for the range to be a more likely scenario.  Investors are unsure of how taxes are going to be raised and until we know for sure stocks are likely to trend sideways…. plus the markets never reverse in a straight line, if this is the end I still expect more topping action. I am looking for the S&P to move up into the range over the next few weeks.

 

2. Europe Reaching A Bearish Extreme?

 

FTSE 100

Call/Put = Call

Entry = Below 5800

Expiration = End of the month

 

My Trading Tip in 50 Words

Europe and the Eurozone may be reaching a bearish extreme.  Fears of collapse, rising debt and austerity have driven the market to the bottom of its two month trading range and there isn’t much left to be afraid of.  Spain and Greece have both made efforts to meet EU demands, especially Greece, and now the time has come for EU to act. The ECB, European Union and IMF will surely come to some sort of agreement that will alleviate debt issues and help the ailing member nations reach fiscal goals.

 

3. BOJ Likely To Re-Stimulate

 

USD/JPY

Call/Put = Call

Entry = Below 79.50

Expiration = End of the month

 

My Trading Tip in 50 Words

The Bank of Japan has been seeking to weaken the yen for some time in efforts to boost the country’s economy.  A recent round of stimulus was even met with disdain and criticized as “not sufficient” by many analysts. Today Japan announced that third quarter GDP shrank by nearly a full percent, the first decline in a year and one step closer to recession.  Now it is even more likely the BOJ will inject more capital and that will help drive this trade.

 

4. China, To Grow Or Not To Grow

 

Heng Seng

Call/Put = Put

Entry = above 21,000

Expiration = End of the week

 

My Trading Tip in 50 Words

China has a lot weighing on it.  A change in leadership, strained relations in the region, a weak Europe and fiscal uncertainty here in the States.  Despite the reassurances of the Chinese government that they will be meeting their 2012 growth projections of 7.5% and that long term growth remains stable recent data and revisions bring that into question.  I think that China will rise with the rest of the world later in the month but a short term put is a better play at this time.

 

5. Apple, Bounce Or Bust?

 

Apple

Call/Put = Call

Entry = Below $545

Expiration = End of week

 

My Trading Tip in 50 Words

Apple is in bear market territory.  The tech titan has fallen down to a long term support line and a potential pivot point.  After all this selling Apple is due for a bounce before falling below this possible support. I’m playing short term calls on Apple this week if I can get in between $540 and $545.

 

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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 AnyOption Binary Options Trading Platform.

 

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