Tip from the Geek – Top 5 Binary Options Trading Tips List 1/7-14/2013

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New Year, New Taxes . . . New Trend?

Well, it is now officially the beginning of the new year.  The opening week is over, the Fiscal Cliff is behind us and now we can focus on this year and what it will bring for us. Last week was a good one for the markets.  Anyone getting in Monday morning received a near 65 point gain on the S&P for the week, close to 4.5% in one week. What drove this move to new 5 year highs was relief over the tax debate which ended last Tuesday.  Yes, they did raise taxes but in the end it was a much smaller increase than expected and one drawn out over the course of 10 years. This is a good thing for American business which has been preparing for the worst, which it did not get.

 

Let us also remember that earnings season starts tomorrow with the release of earnings from Alcoa.  We got a preview of earnings in mid-December with the release of earnings from the like of Oracle, Adobe, Bed Bath And Beyond, Conagra and a host of other companies that do not report in the “official” earnings season. As a whole the December round of earnings was pretty good in the view of beating expectations on revenue, EPS and growth. I believe this is telegraphing the impending round of for quarter earnings beats that I have been predicting for the last two months.

 

This week began with some trepidation.  Asian and European markets both saw some weakness in the beginning of their respective weeks and that carried through into the opening of the US markets. There is some fear of the next round of budget talks set to start in a few months which could further impact taxes and the future of the US and world economies. In the near term there is not much in the way of the US markets moving higher and the VIX is supporting that view.

 

 

1.The S&P Is Making 5 Year Highs

S&P 500

Call/Put = Call

Entry = below 1460

Expiration = weekly

 

My Trading Advice Shortly

The S&P hit 5 year highs last week and based on that I would expect at least a little upside this week due to last minute stragglers trying to get into the market. On an actual technical basis the S&P is displaying a very nice buy signal on its charts of weekly and daily charts. On both charts we can see that stochastic has turned up and that momentum has turned bullish. While not a guarantee they help solidify my position that the long and mid term up trends are still intact.

 

The market action last week was very encouraging for me.  Not only did the markets move up strongly the buying persisted through the end of the week with the final push above resistance occurring late on Friday afternoon. The weakness early Monday was also encouraging.  The selling was light and the markets held the 1460 area through the first hour of trading. The markets may pull back a little more but I think it will be a very small amount and that the break above 1465 will go on. I am trading calls with weekly closes with any entry below 1460.  I may also trade a daily if there is a pullback to 1450.

 

 

2.The Euro Pulls Back To Support

Eur/USD

Call/Put = Call

Entry = below 1.3050

Expiration = weekly

 

My Trading Advice Shortly

The Euro made a sharp drop last week when the FOMC minutes revealed they were considering an end to QE. The 1.3000 level has been an important support/resistance line and pivot point for more than the last 12 months. This move was completely knee-jerk and will prove to be yet another buying opportunity for bulls in this trade. The FOMC minutes were perceived in the wrong way for two reasons: 1) they were minute, a discussion by the Fed Governors, not policy.  2) the outlook for this end to QE is at least 10 months away if not more which leaves the current fundamentals intact. Once the markets realize this the Euro will continue to strengthen against the dollar. I am entering into weekly calls on this trade.

 

 

3.Yen Trade Has Momentum And Legs

USD/Yen

Call/Put = Call

Entry = any below 88

Expiration = daily/weekly

 

My Trading Advice Shortly

The yen trade has momentum behind and may hit Abe’s target of 90 really soon.  The ongoing efforts of the Japanese economy have been driving this trade and the new prime ministers target may be a near term minimum for traders. Think about it like this: Abe has called for “unlimited” yen printing in order to reach that target.  He, and through him the BOJ, are dedicated to reaching it but my question is just how many yen will it take to reach that point? I’m sure that the Japanese economists have an estimate but with the way the markets work I’m also sure that the USD/JPY trade will not stop precisely at 90. For that reason I am trading calls this week with daily and weekly closings until the yen crosses 88.

 

 

4. The Nikkei Drops On Profit Taking

Nikkei

Call/Put = Call

Entry = below 10,500

Expiration = end of the month

 

My Trading Advice Shortly

The Japanese markets are being driven by one thing: the world recovery and the softening yen. This factor combined with last weeks New Year’s rally to cause the Nikkei to gap up to 12 month highs.  There is no surprise here that some profit taking has set in.  I am looking for a pullback to sub 10,500 levels in order to get into monthly close. This move would close the gap formed and provide a nice entry point.

 

 

5. Amazon For Earnings Season

Amazon

Call/Put = call

entry = below $260

expiration = end of the month

 

My Trading Advice Shortly

I am expecting earnings season to be a good one this year and Amazons recent action makes me think it is a good place to ride it out. However, on a note of caution, Amazon has gapped up twice in the last week of trading and is ripe for a pull back.  I will wait for said pull back before getting into a monthly call.

 

 

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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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