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

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Election Uncertainty Hides Potential Market Strength

The US elections are dominating the world markets. Asia, Europe and our markets are holding their breaths awaiting the outcome of the Obama/Romney battle. Not to mention the impending change of leadership in China.  The two, potentially major, shifts in world leadership could have long lasting repercussions on the world economy. There is a lot of talk about which American candidate is better for stocks, Romney or Obama.  The talk is that Romney and the republicans will be better for business and stocks.  In the end, I don’t think it will matter.

 

We also have the fiscal cliff to consider. The looming tax hikes and changes in spending are set to drive America into a new recession and have many pundits worried. Indeed the cliff is there but something will be done to fix it, we just won’t see any form of plan until after the election. Solving the fiscal cliff is important for both parties, neither can afford to let it happen.  A compromise will have to be made by either party and I’m sure that both sides have already laid the groundwork for their plans. The cliff scenario will be taken care of, the only detail is who will be signing the legislation and we won’t know that until after the election.

 

I am still planning on another bull leg in the equities markets but some indecision has entered the equation. The election is an important event for American, business and the world at large. The results could trigger massive selling, massive buying or none of the above. Looking at the S&P 500 charts of daily closings I can see that a major convergence is happening.  Long and short term EMA’s are sandwiching the index just above a major support level that just happens to coincide with a retracement of the market highs seen just prior to the crash of 2008. The Dow is in similar position and volume in that index, while not high, is above average for the last 6 months.

 

Economic data suggests a better fourth quarter than many are anticipating, the markets are technically ready for a leg up.  So what’s the problem? The election and the uncertainty.  I am looking for the markets to move up again but I am also waiting until Wednesday at the earliest to make any trades. If the markets hold these levels than I think they will end the month and the quarter up from this level but if they break below anything could happen.

 

1. Stocks or bonds; Romney or Obama

 

SPX

Call/Put = Call

Entry = 1400-1420

Expiration = End of the month

 

My Trading Tip

The SPX needs to hold above 1400 for me to remain bullish/neutral on it. A break below could spell disaster for a bullish trade and my stance will need to be reevaluated. I still think the fourth quarter is surprise everyone, there is just to much data supporting steadiness.  The economy is not growing rapidly but is is still growing some and the fourth quarter will be a improvement over the last.  I will be looking to get into this trade Wednesday or later.

 

2. Europe holds breath awaiting US elections

 

FTSE

Call/Put = Call

Entry = 5800-5900

Expiration = End of the month

 

My Trading Tip

This trade will hinge on the outcome of the election as well.  My thoughts are that things will keep going as they have been.  The FTSE has been trending sideways for several weeks now and seems to have formed a support line around 5800.  If the index remains above I will look to get into this trade Wednesday or later, once the US elections are over.  Eurozone headlines are moot to me at this point. 

 

3.Asia has its own political changes to worry about

 

Hand Seng

Call/Put = Call

Entry = 22,000-20,100

Expiration = End of the month

 

My Trading Tip

The Asia markets are also in limbo as they await the impending change in Chinese leadership. Chinese PMI data was also revised lower, dashing hopes of recovery in the manufacturing sector. A recent gap up in the Hang Seng, while bullish long term, will probably get filled in the short term.  I will be looking to get into this trade later in the week but am also looking at some shorter term daily/weekly puts in the short term.

 

4. Apple, I Just Cant Step Away

 

Apple

Call/Put = Call

Entry = $600-$610

Expiration = End of the month

 

My Trading Tip

Apple is down, way down.  Volatility in the stock has pushed it so low I think it has hit a bearish extreme. The stock is oversold in the long and short terms making it a good candidate for a rebound post election.  Fear of weaker earnings are overblown, sales of the iPad mini have already topped estimates and the strength will likely carry through into the holiday season. I am waiting until post election to get into this one as well.

 

5.Yen Losing Ground To The Dollar

 

USD/JPY

Call/Put = Call

Entry = 80-80.25

Expiration = End Of The Month

 

My Trading Tip

The Japanese yen is losing ground to the dollar and that is not tied to the election. The Bank of Japan re-stimulated the Japanese economy a few weeks ago and there is talk of them doing it again. As long as Japan is printing money the yen will lose to the dollar.

 

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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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