Binary Options Trading Recommendations for the upcoming week – Markets Information and Trading Tips
S&P 500 becomes the latest benchmark to establish new record high. Research in Motion earnings support broader trends in corporate growth. US GDP rises by 0.4% for the fourth quarter. Market shows tepid response to latest Cyprus agreements. Traders look ahead to BoJ, US Non Farm Payrolls.
S&P 500 Posts New Record Close as Markets Ignore External Uncertainties
The S&P 500 showed short term increases in price volatility but ultimately joined the group of global benchmark indices posting new post-credit crisis highs. Supportive factors were seen in the latest GDP release from the US and the stable earnings results seen from Research in Motion. The latter event helps to confirm that the weak estimates from market analysts in this year’s earnings season were insufficient, and investors have taken the positive surprises as a reason to drive stock valuations higher. Quarterly growth figures at 0.4% should call some of these moves into question and revive arguments related to the Greenspan “irrational exuberance” phrase, so the main question going forward center on investor persistence in driving prices forward now that the benchmark indices have posted new all-time highs.
The other central market story was the progress made in Cyprus, but when looking at the performance in European stocks, it appears that the broader market is unconvinced that these agreements have truly reached completion or will solve the structural problems seen in the European economy. Even with evidence of a bailout agreement, the EUR/USD has fallen to new lows for the year and we will need to see a significant market catalyst to push prices back above the 1.30 level near term.
Next Week’s Activity
Markets are likely to turn some focus back to economic data next week, in what could be another volatile series of sessions into Friday’s close. In the US, we will have key manufacturing and employment data (including the monthly Non Farm Payrolls figures on 4/05). In the Eurozone, we will mostly see inflation data from both Germany and the Eurozone (unlikely to create much short term volatility), and the Bank of Japan interest rate decision on Thursday. Markets are expecting no change in interest rates but USD/JPY should watch the release for the next mentions on official stimulus programs.
1. Last week, we had some pretty good success picking levels in for PUTS in the EUR/JPY but with my typical contrarian approach, I will be looking to play weakness from the other side using a related pair. The EUR/CHF is coming into support at current levels, so I will wait for a spike low into 1.2130 before initiating new weekly CALL options. Excessive strength in the USD/CHF makes the pair less attractive, so I will be looking to trade against the current price momentum in the Euro.
2. For stock trades, I will be looking for monthly CALLS in Priceline.com (PCLN), at $680. With strong earnings reported last month, analyst upgrades in the airline sector, recorded increases in airline ticket sales, the stock is trading at a 50% Fib retracement of its long term move, and prices will likely find support in this area.