Tip from the Geek – Top 5 Binary Options Trading Tips List 3/4-11/2013

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Is China Housing Leading World Markets?

This week started off with a massive drop in the mainland China index. This move was driven by a not unexpected tightening of real estate curbs in the country. The curbs were apparently bigger than expected and sent shares of housing, materials and basic resources stocks lower throughout the region. The curbs, an increase in the minimum deposit and interest rates required for second homes, is meant to help stabilize the wildly expanding Chinese housing sector. The move, and subsequent drop in the Shang Hai Composite, had a ripple affect around the globe but all the analysts interviewed this morning did not put importance on the changes or 4% drop in index value.  In fact, many off them see this as a very short term drop in Chinese stock prices.

 

The drop in Asian stocks carried over into Europe where uncertainty over Italy, a rise in Spanish unemployment and some weak earnings caused trading to be mixed. Based on the minimal reaction in Europe to the Chinese drop I am leaning toward the view of the drop being short term indeed. Spain actually gained a small percentage point after an initial drop in early trading. Other news in the region showed a surprisingly large drop in profits for HSBC who cited “challenging conditions”, something we knew already and something that the central banks around the world are working hard at changing.

 

This week is an important one for U.S. economic data. It is not a week super full of releases but the ones we will get are very significant. Tuesday we’ll see ISM numbers and starting on Wednesday the all important ADP-Challenger-NFP bundle begins. There is also the sequester issue to consider because it is yet to be resolved. From what I can tell it may be the “non-event” Art Cashin mentioned last week on CNBC but it will surely be an important headline all week and could cause some short term fluctuations in the U.S. indexes.

 

 

 

1. S&P 500 A Stones Throw From All Time Highs

S&P 500

Call/Put = Call

Entry = below 1510

Expiration = end of the week

 

 My Trading Advice

The S&P has been very volatile over the last two weeks.  The spending sequester, earnings, data, FOMC statements and global events have all had their impact.  This week will be no different but I think the first half of the week may be on the quiet side. Data will begin to pour in tomorrow and then continue on Wednesday and Thursday culminating Friday with the NFP numbers. Based on recent trends in unemployment claims I am expecting these numbers to be good. Not stellar or spectacular but good enough to support the current levels of recovery and possibly even hint at improvements expected later this spring.

 

The S&P is still trending up but faces a tough resistance level at 1525. This level proved to be a hindrance to my trading last month and may provide the same this month. At the same time there is significant support at 1500 as evidenced by last weeks bounce from that level. I am remaining bullish in my overall out look on the S&P but I am trading shorter term positions because of the tight range the index is currently in. I am trading calls on the S&P with end of the week expiration and a target entry below 1510.

 

 

 

2.BOJ Governor Nominee Will Drive Nikkei Higher

Nikkei 225

Call/Put = Call

Entry = below 11650

Expiration = end of the week

 

 My Trading Advice

The Nikkei hit a new 4.5 year high today after statements from Shinzo Abe nominee Haruhiku Kuroda during his confirmation hearing. The nominee for BOJ Governorship said that he supports more aggressive easing in Japan. This is completely in line with market expectations and the desires of Prime Minister Shinzo Abe.  So far, the easing policies of Japan have helped to lower the value of the yen, improve Japanese competitiveness in over seas markets and boosted the value of yen based stocks. Now it seems like the desires of Abe to further help boost growth even more are about to be met.

 

The Nikkei up trend appears to have some legs. So far the policies of Abe to improve the economy have been in large part talk and plans. Now that Kuroda is on the cusp of bocoming BOJ Governor those talks will turn to actions. But that is where the risk lies. What if Kuroda does not get confirmed as governor. Because of that possibility and also because the Nikkei has been choppy this year I am cautious.  I am expecting the index to move sideway’s to down over the next day or two before moving up to retest the new intraday 4.5 year highs. I am trading calls on the Nikkei with an end of the week expiration and a target entry below 1650.

 

 

3. Yen did notreact to Kuroda statements

USD/JPY

Call/Put = Call

Entry = below 93.50

Expiration = end of the week

 

 My Trading Advice

The yen did not react much to the statements from Kuroda today. His belief’s are well known and discounted long ago. However, a confirmation or moves closer to a confirmation will certainly move this trade higher. Like with the Nikkei trade there is risk of him not being confirmed which would have at least near term effect. I am trading calls on the yen this week with a target entry below 93.50. It could be possible to get in with a little better target but a break above 93.50 would rule that out.

 

 

 

4. Germany Is Still Expected To Grow In The First Quarter

DAX

Call/Put = Call

Entry = below 7650

Expiration = end of the week

 

 My Trading Advice

The German economy is expected to be in rebound mode as we speak and nothing about today will change that. The changes in China were a little on the drastic side but were none the less expected. The Italian election has turned out to be a lot of noise and also did not impact stock values significantly. Support exists around 7600 where I think it looks good for entry.  I am bullish on this index longer term as well but because the DAX is range bound I am more cautious. I am trading calls on the DAX with end of the week expiration and a target entry below 7650

 

 

 

5. Weaker Euro Good For Euro Countries

EUR/USD

Call/Put = Put

Entry = above 1.2980

Expiration = end of the week

 

 My Trading Advice

The Euro is still correcting versus the dollar. Strength in the U.S. and a growing expectation of a rate cute by the ECB have put the pressure on this pair. Technicals over the intermediate and long term are bearish and the retest of resistance last Thursday are confirming that. I am trading puts on the EUR/USD with end of the week expiration and a target entry above 1.2980.

 

 

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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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