Weekly Binary Options Briefing 6/10-17/2013: Stocks Stage Late Rebound after Positive Payrolls

Binary Options Trading Recommendations for this week – Markets Information and Trading Tips

Stock markets rally into the end of the week as Non Farm Payrolls surpass initial expectations.  ECB fails to implement negative interest rates.  BoJ meeting and Australian jobs to drive next week’s volatility.

 

Weekly Binary Options Briefing:  Stocks Stage Late Rebound after Positive Payrolls

Stocks moved higher into the final sessions of last week, as the US Non Farm Payrolls for the month of May came in above analyst expectations at 175,000 jobs added for the period.  This was above even the original estimates (which called for a rise of 165,000 jobs), but the surprise was even larger as early data indicated that the final result on Friday would weaken.  Wednesday’s ADP employment report showed that private companies added 135,000 new jobs for the month, and this led to downward revisions in the NFP survey.  So, when the headline figures came in higher than even the original estimates, market reactions were more pronounced.

Looking into the details, however, the overall picture is not as positive as it might seem.  Payrolls data for the previous month was revised lower (149,000 for the month of April), and the unemployment rate moved higher to 7.6%.  Traders focused solely on the headline NFP surprise and sent stocks higher but there is some potential for these gains to retrace once markets have more time to consider the details of the report.  At this stage, markets are mostly concerned with whether or not new jobs data will inspire the US Federal Reserve to start cutting back on its monetary stimulus programs.  This makes public commentaries from voting members take on an even higher level of importance and with the slower data calendar ahead for next week, potential market moving events could be seen from these areas.

 

 

 

The Week Ahead    

 In the week ahead, the biggest event risks will be seen with the Bank of Japan interest rate decision on Tuesday, and the Australian jobs numbers on Thursday.  No major changes are expected at the BoJ meeting but the Yen has risen roughly 7% since its last policy meeting, so traders will be looking for comments that are specifically currency related.  The BoJ has a marked interest in seeing a weaker currency, so it will be important to see how (or if) this issue is discussed in its next statements.

 

 

My Trade Ideas (Trade on CommuniTraders):

1. The  massive Yen rebound into the middle parts of last week was driven mostly by stop losses in an overly short market.  The fundamental picture has seen almost no change so I am looking at these downward moves as new buying opportunities.  The downside volatility failed to produce a daily close below Fib support at 95.70, so as long as this picture remains constant, anything below 98 should be viewed as an opportunity for weekly CALL options in the USD/JPY.  We will have the BoJ interest rate decision next week and with this pair’s tendency toward volatility, options positions are far preferable to spot positions for USD/JPY bulls.

 

Trading Briefing USD/JPY Trade

 

For stock trades, I will look to play off of last week’s earnings surprise from PriceLine.com (PCLN).  Quarterly revenues rose to $1.30 billion (from $1.04 billion previously), which was higher than analyst estimates.  For next quarter, Priceline sees earnings coming in at $7.87 to $8.45 per share with adjusted earnings of $8.87 to $9.45 per share.  Technically, the stock has found support at the 38.2% Fib retracement of its latest rally.  Look to buy monthly CALL options in PCLN at 805, targeting a break to new all-time highs.

 

 

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