Tip from the Geek 06/01–08/2015: Another Week Of Volatility
Top 5 Weekly Binary Options Trading Signals by the Geek
The market has been volatile of late. Not so much in a going straight down or straight up kind of way as in a churning, back and forth kind of way. Equities markets are wrestling with highs, currencies are trying to find fair value amidst shifting central bank outlook and commodities are getting hit by fear. This week will be no different. There are important events taking place in all arenas, each with the power to move global markets. This is going to be a trick week for traders, signals are going to come left and right so you will need to keep a close eye on indicators.
First up is a meeting of the ECB, their June policy meeting to be exact. The bank is not expected to make any changes but we can expect to hear some kind of talk centered on possible summer purchases of bonds. The flip-side of this coin is a long list of US economic data that will fuel FOMC speculation, with an upcoming FOMC meeting in just a few weeks. Adding spin to the euro trade is Greece. The country missed its own deadline for a deal by the end of May, has another official deadline coming at the end of this week, and now rumors are swirling that a deal may be at hand. If all this wasn’t enough there is also an OPEC meeting scheduled for the end of the week. This meeting is not expected to result in a cut of production, which in my view is bearish for prices and should send WTI and Brent lower.
1. Bulls Still In Charge
S&P 500
Call/Put = Call
Entry = Below 2115
Expiry = One Week
My Trading Advice
The bulls are on the ropes but they are still in charge of the market. The hoard of near term news that has been holding the market back has not been able to reverse the trend. This week economic data may add additional volatility but so long as the trend line is not broken the rally is likely to continue. It’s hard to say how international news is going to affect the market until we hear what it is but so far these have only served to be near term hurdles and not a real threat to the US bull market.
The S&P 500 is still bouncing along it’s up trend line and looking well supported. The indicators show support along the trend line although the last week has put the index in oversold conditions. I am looking for potential entries along recent support levels in or near the 2100-2110 levels. The economic data could add some volatility this week and provide more than chance to get it. This week I am trading a call with one week of expiry and a target entry below 2110.
2. Gold Is Not Immune
Gold
Call/Put = Call
Entry = Below $1190
Expiry = One Month
My Trading Advice
Gold has not been immune to market volatility. As a dollar based commodity it is affected by anything affecting dollar value, as well as underlying fundamental conditions which drive it as a market. This includes economic data, FOMC speculation, ECB activity/speak and speculation, Greece and physical buying/selling of the commodity. What I have noticed is that dollar strength always drives price down, but long term buyers always step in around the $1180-$1185 region. Since I see no reason for this not to continue I am buying a call on gold while it is below $1190. I am choosing a one month expiry to help avoid volatility.
3. Oil Bubble May Burst Soon
USO/Oil ETF
Call/Put = Put
Entry = Above $20.25
Expiry = One Week
My Trading Advice
Oil prices are trading near the long term high, long term as in 6 months, but have fallen from their peak. The price is being supported by fear and speculation, small signs of storage declines and false hopes in production cuts. The thing is, supply and storage is still very high, production is at or near all time highs, and demand remains low. This combination is bearish for oil, and with the OPEC meeting scheduled this week as a catalyst, could send prices down to $50 or lower. I am trading a put on the ETF while it is above $20.25 with one week until expiry.
4. Euro Woes
EUR/USD
Call/Put = Put
Entry = Above 1.0900
Expiry = One Week
My Trading Advice
The euro is facing a lot of pressure right now. On one had we have the whole Greece thing. When the news is negative the euro fades, when it is positive the euro strengthens. On the other we have the ECB and their policy meeting with expected talk about summer bond buying. This could strengthen the euro, if is as expected. In the end I think what will move this pair the most will be the dollar, which is regaining strength on data. The current trends have the pair retesting 1.0500 so I am trading a put on with a target entry above 1.0900
5. Yen Spiking Higher
USD/JPY
Call/Put = Call
Entry = Below 124
Expiry = One Week
My Trading Advice
The USD/JPY spiked higher on a recent combination of firm US and Japanese data. While the US data is not that strong, and the Japanese data is not that strong, the outlook for BOJ yen printing and FOMC policy tightening remains. The pair reached a 7 year high on this outlook with strong long term technicals so I think it will continue to make new highs. I am trading a call on this pair with a target entry below 124 and one week until expiry.
More Tips by the Geek – 06/01–08/2015 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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