Tip from the Geek 01/26 – 02/01/2015: Another Week With The FOMC
Top 5 Weekly Binary Options Trading Signals by the Geek
There is a lot going on this week, as always, but the main focus for me will be the FOMC meeting scheduled for Tuesday and Wednesday with a Wednesday policy statement release. The meeting will be important not for expected changes to policy, but for outlook and comments on when they may be planning to begin hiking the interest rates. Current economic trends, outlook, statements and comments have them making the move no earlier than May and most likely by June. Policy in line as expected will be a market mover, any changes will be a major market mover that may span forex, commodities and equities.
On the international front Greek elections held over the weekend have put the anti-austerity party in charge. This move would have, I thought, sent the EU and global market for a spin but so far has been shrugged off. Perhaps it was already baked into the cake, or it just doesn’t matter too much. European markets closed at new highs and US markets moved higher as well. Another big story affecting the market this week is the death of the former Saudi King. The new King helped to calm overzealous oil bulls by reinstating current Oil Minister Al-Naimi and assuring the market there would be no change to production or oil policy.
But that is not all folks, there is more to impact trading this week as well. First, there is some important economic data aside from the FOMC. Durable goods, Chicago PMI, 1st estimate of 4th quarter GDP, New Home Sales, Pending Home Sales, Consumer Confidence and jobless claims to name a few. On top of that earnings are in full swing. This week and next week is the bulk of reporting and will deliver more than 50% of companies listed on the S&P 500. The week starts off with many names but Microsoft stands out on Monday, with Apple a big name reporting on Tuesday. So far expectations are pretty low and most companies are beating the average. The question is….what will final earnings growth be and what is it expected to be next quarter?
1. Dont’ Buck The Trend
S&P 500
Call/Put = Call
Entry = Below 2,050
Expiry = One Week
My Trading Advice
The S&P has been trending up for a long time, fueled by the FOMC but rising on positive economic trends. The index has tested that trend many times and has yet to break it. The index is now consolidating above support, after testing those same long term trends, and is presenting a nice trend following signal and I count at least 5 confirming factors. The trend is up, the moving average is pointing up, price action is bouncing from the long term trend, MACD is bullish and stochastic is firing a trend following bullish crossover.
I can’t fight the trend and I won’t. I am trading a call again this week with a target entry below 2,050 and one week until expiry. There could be some volatility this week but in the end I am sure that the long term trends will prevail because there is just no evidence of a reversal that I am aware of. Be wary of the FOMC, and patient for the GDP, but use any weakness to enter bullish positions, I know I am.
2. Slippery Oil
USO/Oil Tracking ETF
Call/Put = Put
Entry = Above $17
Expiration = One Week
My Trading Advice
Oil prices got a boost at the end of last week when Saudi Arabia announced the death of their king. Traders feared a change in policy, a troubled change of power and other possibilities that have not yet come to pass. The new king has taken power without issue, he has stated there will be no change to policy and even held on the long standing oil minister. These developments helped to calm eager bulls and put oil prices back to near flat and at long term lows. There is no sign of support for oil so I am still a bear, trading a put with a target entry above $17 and one week until expiry.
3. Gold Retreats
Gold
Call/Put = Call
Entry = Below $1285
Expiration = One Week
My Trading Advice
Gold is pulling back after hitting 8 month highs last week. This is not surprising seeing as how the metal is still more than 10% off of its lows making it an attractive asset for taking profits. However, the down trend is over and long term outlook is bullish so any weakness in the metal should be seen as at least a near term buying opportunity if not a short to long term one. I am trading a call on gold this week with a target entry below $1285 and one week of expiry. Look to the FOMC, US economic data and weak foreign currencies as an indication of long term direction.
4. When Two Roads Diverged In A Wood…
USD/JPY
Call/Put = Call
Entry = Below 118.50
Expiration = One Week
My Trading Advice
When two roads diverged in a wood, well, they went different directions. Different directions is what the BOJ and the FOMC paths are leading them on and this is driving a wedge between the two currencies. It has taken a couple of months but the pair has consolidated above long term support and is now moving higher, ahead of the FOMC meeting this week. There is no reason to expect the dollar to get weak and every reason to think the yen will so I am trading a call this week with a target entry below 118.50 and one week until expiry.
5. Thanks Mario!
EUR/USD
Call/Put = Put
Entry = Above 1.1250
Expiry = One Week
My Trading Advice
Thanks to my pal Mario Draghi the Euro is heading to parity versus the dollar. The ECB announced, finally, “further measures” and more of them than expected. This is sending the eur/usd pair lower and I am trading a put. My target entry is above 1.1250 with one week until expiry. I think parity may be reached within the next 30 days or so.
More Tips by the Geek – 01/26 – 02/01/2015 Trading Tips On Forum.
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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 CommuniTraders Binary Options Trading Platform.
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