Tip from the Geek – Top 5 Binary Options Trading Tips List 2/25-3/4/2013
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Spending Sequester Discounted By U.S. Markets
Last week was a real roller coaster ride for the U.S. markets. The FOMC minutes led to a whole lot speculative selling, selling that brought the S&P 500 down to test 1500 and bounce right back. Friday turned out to be the 8 Friday in a row for the index to climb, a very positive sign for those of us who are bullish on the market. Friday gains are a generally accepted indicator of short term bullishness because it means traders and speculators is willing to hold positions over the weekend in anticipation of higher prices in the next week. This morning the futures trading seemed to confirm that bullish sentiment with a roughly 8-9 point gain that held throughout the early morning.
Another thing helping the S&P 500 is the world market. Gains in Asia and Europe helped to fuel the global rally. The elections in Italy that many feared would bring an end to recent reforms and plunge the country, and the EU, back into crisis mode are fading from the spotlight. Although at the time of this writing the polls had not yet closed the reigning opinion was that the reform driven movement would win the day.
Action in Japan fueled the rally in the Nikkei. The government has put forward Haruhiko Kunda as its choice for BOJ governor. Mr. Kunda has extensive experience, is a proponent of aggressive easing and is expected to aid the Japanese current administration with its plans to devalue the yen in order to boost growth.
1. S&P 500 Had a Hiccup
S&P 500
Call/Put = Call
Entry = below 1525
Expiration = End Of The Month
My Trading Advice
The S&P had a pretty severe hiccup last week. The FOMC minutes proved to be cause for bears to enter the market. However, on closer inspection the minutes gave absolutely no indication of when or how QE was going to end. What they did give us was a lot of discussion on the subject, something they’ve given us before. What the minutes also provided were a few statements that gave reason for hope. Statements like “moderate improvement in the economy”, “fewer downside risks”, “housing strengthening” and “unemployment declining”.
The S&P drop was fairly severe and brought the index down roughly 3.5% before it found support and bounced back. The bounce back recovered about 50% of the intraweek losses and looks good to complete that move today. I still think the S&P 500 is on the way up to retest it’s all time highs and I also think that the spending sequester, which is scheduled for Friday, will have little short term effect on market prices. I am trading calls on the S&P 500 with an entry below 1525 and an end of the week expiration.
2. Nikkei Leading Asia Markets
Nikkei 225
Call/Put = Call
Entry = Below 11,500
Expiration = End of the week
My Trading Advice
The Nikkei is leading Asia and made a new high today. The Japanese index gained about 2.5%, or 275 points, today and broke above long term resistance. This move is being driven in part by the yen and in part by the effects of a weaker yen. The BOJ is printing yen, on an internal level when there are more yen in circulation it takes more yen to buy yen based stocks. On an external basis when the yen is weaker than the dollar it means that it is cheaper for dollar based economies to buy Japanese products. This dynamic is expected to lead to growth in Japanese exports and profits for Japanese companies. These two factors will likely keep the Nikkei moving higher, at least in the short term.
The Nikkei is lagging the rest of the world in terms of the post 2008 recovery. Many other world indexes have already, or are about to, reached their pre-2008 level. The Nikkei has only regained about half which leaves quite a bit of room for this index to move up. I am trading calls on the Nikkei with entry below 11,500 and an end of the week expiration.
3. German Rebound Expected In First Quarter
DAX
Call/Put = Call
Entry = below 7800
Expiration = End of the week
My Trading Advice
The Italian elections expected result is helping to alleviate fear in the Eurozone. The country with the most to gain, besides Italy itself, is Germany. Germany is the strongest of the EU nations and is expected to rebound sharply in the first quarter. Despite this expectation there are still hurdles ahead, as pointed out by Mario Draghi a few weeks ago, and Italy was one of them. Now that that issue is put to rest the German markets can continue onward. The DAX made a nice move up today, gaining 2.5% and approaching a potential area of resistance. I am trading calls on the DAX with end of the week expiration and an entry below 7800.
4. Yen Sliding Away
USD/JPY
Call/Put = Call
Entry = below 94.25
Expiration = End of the week
My Trading Advice
The yen broke to a new intraday high today on the heels of Mr. Kunda’s nomination. This move was met with some selling but indicators are pointing to a continuation of the current trend. I am trading calls on the USD/JPY pair with an entry below 94.25 and an end of the week expiration.
5. Euro Bounces but Still Faces Resistance
EUR/USD
Call/Put = Call
Entry = below 1.3300
Expiration = End of the week
My Trading Advice
The EUR/USD pair is making a technical bounce at the conjunction of an uptrend and a support line. This bounce looks like it could be sharp but there is still resistance ahead. The pair is still under the short term 30 day moving average and 1.3500, a level which proved to be quite important over the last month or so. I am trading calls on this pair with and end of the week expiration and an entry below 1.3300.
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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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