Tip from the Geek – Top 5 Binary Options Trading Tips List and a Happy New Year! 1-4/1/2013

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Will We Thelma & Louise Over The Fiscal Cliff?

My first thoughts on that are ARGGGGHHHH!  The fiscal cliff did a real number on the markets this month and put a few of my trades in the red.  As much as I would like to lament this fact that is the basis for another piece. Today we need to focus on the Fiscal Cliff, the end of the year and what may happen to the markets. Today is New Year’s Eve, the last day of the month and the year. This usually brings a fair amount of volatility just because of the shifts that occur from calendar year to calendar year.

 

This year the markets are wound up to a point.  The Fiscal Cliff is fear and tension on steroids and has sent the VIX up to break above the 20 level and what I consider to be the “safety range”.  Some may think this is a time to get ready for a massive down leg but I think it still may be too early for that. The markets are still in a long term uptrend and this recent round of fear is only providing an entry point.  Underlying economic data still points to slow recovery and we are certain to get some good news today or Wednesday at the latest.

 

It all comes back to the Cliff.  We are certainly in danger, the markets are scared and have sold off but a big bounce is on the way.  I am expecting an agreement to settle the Cliff in the short term but no real debt solution.  Regardless, the relief this will bring to the markets will drive them back up to the recent highs. The long term charts are showing a classic buying signal and the daily charts are setting up for the same.

 

 

1. The S&P Setting Up For Big Bounce

S&P 500

Call/Put = Call

Entry = Market Open Wednesday/Conditional

Expiration = end of week

 

My Trading Advice

My technicals are screaming buy at me but the Fiscal Cliff still has me spooked. There are lots of reasons to think the market is going up but our good ole politicians may scuttle the ship and send it sinking if they don’t satisfy us soon with some form of budget agreement.  This morning futures trading broke the critical support of 1400 and this trade carried over into the opening of regular trading. My first thoughts on this was oh no, here it comes but I was mistaken.  Support is still there, currently holding at 1400 and the 150 day moving average.

 

The early opening met support that quickly brought the S&P 500 back above 1400.  If not for the possible Cliff Effect that still looms I would be buying short, medium and long term calls on the index as we speak.  As it is I am being cautious this week and waiting for Wednesday before making a move on the US indexes.  I may miss an really good entry but lets remember, this is binary and all that matters is that the markets close higher than when I buy in.  I am conditionally going to buy in at open on Wednesday (markets are closed tomorrow) provided that we get a cliff deal and the markets don’t make a huge gap open.

 

 

2. Europe Braces For Fiscal Cliff Solution

FTSE 100

Call/Put =  Call

Entry = Wednesday/conditional

Expiration = end of the week

 

 My Trading Advice

Europe, like the rest of the world, is bracing for a Fiscal Cliff solution.  Traders around the world are waiting to see what will happen and if the US will derail the global economic recovery. Today German Prime Minister Merkel stated that the reforms will take patience, that recovery is not going to happen overnight.

 

The English markets traded up to long term resistance last week and were capped just like the US markets.  The holiday week, end of the year and Cliff shenanigans has kept this index in check. Again, the underlying trend is one of slow recovery so I see lots of potential for upside in this index.  However, the Fiscal Cliff has cast a pall over this market as well and I just don’t see getting in before a solution as a good idea.  Because of the ongoing negotiations in the US and tomorrow’s holiday I am holding off on this one until Wednesday as well.

 

 

3.Euro Consolidates Versus The Dollar

Eur/USD

Call/Put = Call

Entry = below 1.3200

Expiration = end of the week

 

My Trading Advice

The Euro has made a nice run up versus the dollar and is now consolidating above previous resistance.  The move in early December looks like it is only half played and a continuation of that is likely.  My current target for the Eur/USD trade is a peak around 1.3500.  I expect the impending Fiscal Cliff patchwork solution to be a catalyst for this trade. Any entry below 1.3200 looks good for an end of the week expiration.

 

 

4.Nikkei Still Moving On Yen Printing Campaign

Nikkei

Call/Put = Call

Entry = below 10,500

Expiration = end of the month

 

My Trading Advice

The Nikkei is still being driven by Shinzo Abe’s yen printing policies. The value of Japanese stocks is changing simply due to the amount of yen available to the markets.  We know that Abe is printing more yen in an “unlimited” quantity so that in turn should drive up the value of yen based stocks in a similar matter, at least until the bears decide its time to step in.  I am trading calls on the Nikkei for end of the month expirations.

 

 

5.The Yen Makes A Dip

USD/JPY

Call/Put = Call

Entry = below 86.50

Expiration = end of the month

 

My Trading Advice

The yen is still moving up and still a long way from the target rate of 90 USD set by Shinzo Abe.  The BOJ will be printing yen until the rate moves to that level so we can be fairly certain of this trade at this time.

 

 

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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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