Tip from the Geek 12/01–08/2014: Oil Prices Dragging On The Market
Top 5 Weekly Binary Options Trading Signals by the Geek
Oil prices are dragging on the market but don’t forget, low oil prices are good for everybody except the oil producers and even help them out a little. Low oil means low input costs for everything. It doesn’t matter what form you get your energy in, low oil prices mean low costs for energy and the longer they stay low the lower prices for other items will get. And the more profits for companies, which is setting us up for some nice surprises, or at least some nice revisions, to current earnings estimates. It also means more money for the consumer. If not in lower prices for items ex-energy, then certainly for gas and heating oil. I personally am saving nearly 45% on a tank of gasoline as compared to just two months ago and am enjoying the extra cash immensely. If you haven’t figured it out by now I am a little bullish on the prospects that low oil will have for the global economy.
This week the clock starts ticking down toward the end of the year in a way that will get louder and louder. There are now less than 20 trading days left in the year. And we are entering the meat of the holiday shopping season, a time when dollars get spent and the economy gets stimulated. Early reports say that Black Friday may not have been as big as expected but so what? The shopping season started days before Black Friday, lasted all weekend and into Cyber Monday, and the rest of the month so I don’t put much stock in that report. I am looking at (in the US at least) a firming economy and a strong consumer backed by an energy based tax break. Oil prices are definitely going to hurt the oil companies, but the rest of the world will enjoy it.
1. S&P 500 Still On The Rise
S&P 500
Call/Put = Call
Entry = Below 2065
Expiration = One Month
My Trading Advice
The S&P 500 has been trending up for over a month, every since the October correction. This move has been driven by long term investors, a lack of bad news, improving economics and a decent round of earnings. I see nothing in the way to change any of this in the near term except perhaps some data. This week marks the first of December which means the start of the November macro-economic data cycle. All in all I expect to see the data confirm the uptrend but there may be some week employment figures. November is historically a month in which lay-offs peak so this shouldn’t be too surprising. It will not be the peak itself that is important so much as its extent relative to the current trend and the comparable peak last year.
The technicals are bullish but indicative of a market running out of steam. I however am of the opinion we are only about 2/3’s through with this rally and that the data this week could spark the remainder. This would take the index up over the next 2-3 weeks in what is euphemistically called the Santa Clause rally. There is big news all week, but the most important will as always by the NFP/Unemployment news released on Friday. I am trading a call with an entry below 2055 with one week until expiry.
2. Gold, Gold, Gold
Gold
Call/Put = Put
Entry = Above $1185
Expiry = One Week
My Trading Advice
Gold Prices revealed their susceptibility to bearishness and selling when Swiss voters elected not to increase central bank gold reserves. Gold prices sank more than $60 on the news but was able to recover most if not all of the loss. This is a bullish sign long term but by no means does it mean that gold prices will be able to move past resistance at $1200. I expect to see more volatility and more testing of support before it is all said and done. I am trading a put on Gold with a target entry above $1185 with one week until expiry.
3. Yen Walking A Fine Line
USD/JPY
Call/Put = Call
Entry = Below 118
Expiration = One Week
My Trading Advice
The yen has been losing value to the dollar for weeks, months, driven by strong US data, weak Japanese data and moves from both sides meant to strengthen and weaken the respective currencies. These trends have not ceased and are in fact likely to receive further confirmation this week as US data is released. I am trading a call on the USD/JPY with a target entry above 118 and one week until expiry. 118 is looking like a great place to find support and support is indicated there by both MACD and stochastic.
4. Slippery Oil
USO/Oil ETF
Call/Put = Put
Entry = Above $25.50
Expiration = One Week
My Trading Advice
Oil prices tanked last week when OPEC surprisingly did nothing to support them. They are waiting to see if winter weather will do the work for them in order to maintain market shares now. The thing is, supplies are still high so there is really no reason to think that oil prices will go any higher now. I am no longer looking for a bounce in oil, at least not yet because there are about $30 dollars between current prices and the next long term support. I am trading a put on the USO with a target entry above $25.50 and one week until expiry.
5. The DAX Attax!
DAX
Call/Put = Call
Entry = Below 9950
Expiry = One Week
The DAX has been on a tear for the last month as global rebound helped to lift share prices. Helping are some not too bad economic reports and more dovish talk from Mario Draghi. The index is currently trading just beneath resistance at 10,000 and looks like it will keep on rising, perhaps spurred on by the US data this week. I will be trading a call on the DAX with a target entry below 9,950 and one week until expiry.
More Tips by the Geek – 12/01-08/2014 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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