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Binary Options Trading Briefing 24-29.6 – Markets Reverse Early Rallies and Close Week Lower
Binary Options Trading Recommendation for this week – Trading Tips and Market Information
Equity markets finished the week in negative territory, break a two week streak of gains after the US Federal Reserve signaled that no new stimulus will be added to the US economy. From a technical perspective this is leaving markets vulnerable, as the S&P 500 is now showing a weekly close below the heavily watched 1340 levels and this is leaving many traders with a “sell on rallies” bias going into next week.
The negative close came after earlier rallies were seen in markets on Monday and Tuesday. This initial rally came after the encouraging results from last weekend’s Greek elections, where a pro-bailout party was elected with a clear majority. This was mostly encouraging for the Euro currency and stock markets in that region but most markets saw an initial lift as risk sentiment improved. This upside reversed mid-week, however, after the US Federal Reserve displayed its view that the US economy will not require additional stimulus measures.
Next Week Directed by Sentiment Rather than Data
Trading conditions next week could prove to be very choppy, especially at the start. The reason for this comes from the fact that economic data releases might not be enough to alter the negative sentiment that was present into the close on Friday. Most of the economic data that is set for release will come out of the US, where Durable Goods, New Home Sales, Personal Spending, and Consumer Confidence are all on schedule.
None of these releases are top-tier reports, however, and any volatility generated by these numbers is likely to be only short term in duration. As far as specific event risks are concerned, most attention could very easily be paid to the European Union Summit meeting that will be held on Thursday and Friday. This meeting could provide some key indications of the strategy plans that will be seen in the coming months and the level of commitment that each country possesses in keeping the EU intact in its present form. If there is any indication that this is not the case, expect volatility levels to pick up considerably.
Looking even further ahead, traders should remain watchful of analyst reports with respect to the beginning of the second quarter corporate earnings season, which will start in two weeks. In markets that are so heavily influenced by news headlines, investors will still be forced to analyze the actual performance of businesses at some stage, and a negative start to these release could held to confirm the latest downtrend in equity markets and potentially push stock values much lower.
My Trading Recommendation in 50 Words
With oil markets approaching critical support levels on longer-term time frames, I will be looking to take short term CALL positions as prices approach the 76.20 level, given that prices are likely to bounce from 75.50 on initial test.
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