Tip from the Geek – Top 5 Binary Options Trading Tips 02/03-10/2014
New Month, New Fed Chair, New Trades
Wow, writing the tips this week was a challenge. Literally as I was entering trades economic data was released that caused the markets to move. This was good and bad in some ways. Good because some of my trades are already deep in the money, bad because some of them aren’t. What happened? First the weak data out of China over the weekend had traders cautious. Second, weaker than expected auto sales gave more reason for concern. Third, at 10AM ISM manufacturing data was released. The data, much weaker than expected, revealed declines in labor that are not good for the economy or the consumer. Later this week there is more, very important, data that will surely move the markets as well. ADP employment on Wednesday, Challenger on Thursday and NFP/Unemployment on Friday.
The market(s) are in a period of correction and consolidation. Nearly every chart I look at reveals something along those lines. There is just too much uncertainty in the global economy to be able to make a long term analysis. Asia is in flux. China is slowing, manufacturing in the country is at a long term low. Japan is in something. The country is boosting the economy by devalueing the yen but now the whole bubble may be bursting. The Nikkei entered correction territory this week. Europe is quiet, for now. They have been making progress but if China implodes then Europe will be next. In America the taper, the Fed, the Age of Janet Yellen, a string of weaker data, earning and guidance are all at play.
1. S&P 500 Nearing Trendline
SPX
Call/Put = Put
Entry = Above 1780
Expiry = Week
My Trading Advice
This was a crazy trade for me today and I apologize if it is not one that can be acted on. I literally placed my trade into Communitraders about 5 minutes before the ISM data was released. I had a bearish feeling but by no means did I expect to see an 18 point drop in the index within minutes. The index is now at the long term trend line and could be nearing the bottom of the current correction. The near term analysis is bearish but the momentum is waning and the stochastic is showing sign of a near term bottom. This does not mean that a bottom is in place. It could be a good time for intraday traders to trade calls with hourly or daily expiry.
Longer term the index is in a dip. It could be a deeper correction but I need to see a break below the trend line to start predicting that. At this time I am waiting for the economic data later this week before making anymore calls on the fundamentals. Technically the index is in a long term up trend so I am still bullish longer term and may enter a call with one week or one month expiry toward the end of the week as the data is revealed. My trade for this week was a put with an entry above 1780 and one week until expiry.
2. Euro Breaks Support
EUR/USD
Call/Put = Put
Entry = Above 1.3500
Expiration = One Week
My Trading Advice
The eur/usd broke support during the early trading Monday morning. My analysis for this pair has it moving down toward the lower end of a trading range while economic uncertainty persists. My original entry was “as close to 1.3500” as possible but the ISM data weakened the dollar just enough that a 1.3500 or above entry could be possible. Indicators are bearish, momentum is accelerating to the downside and stochastic has peaked. My next target for support is around 1.3750. Until then I am trading a put with a target entry above 1.3500 and one week until expiry.
3. Yen Is Stronger Than The Dollar?
USD/JPY
Call/Put = Call
Entry = Below 101.75
Expiration = One Month
My Trading Advice
The USD/JPY pair has been experiencing some corrective weakness ever since the last BOJ meeting. The bank had a fairly bullish stance on the state of Abenomics and the Japanese economy which helped to strengthen the yen versus the dollar. Up until the Monday release of U.S. ISM the pair had been holding support at 101.75 but fell below afterward. Regardless, I am still bullish on the pair longer term and am trading accordingly this week. I am using a one month expiry to allow the pair to stabilize and the market to move past the next BOJ meeting. I am trading a call with a target entry below 101.75 and one month until expiry.
4. Gold Jumps On ISM
Gold
Call/Put = Put
Entry = Above $1260
Expiry = One Week
My Trading Advice
My gold trade was one that really benefited from the ISM release and subsequent market move. The gold market jumped about $26 on the news to retest the $1265 resistance zone. Fortunately for me I had not placed my trade yet and was able to adjust. I am bearish on gold and had been considering a trade with a one month expiry. The spike allowed me to get in at a much better than expected price and provided an opportunity to shorten my expiry as well. I am trading a one week put on gold with a target entry above $1260.
5. The Apple Or The Worm
Apple
Call/Put = Call
Entry = Below $505
Expiration = One Month
My Trading Advice
Those of you who know me know that I love to hate trading Apple. Sometimes I get the apple, sometimes the worm. At thist time Apple prices are way down on poor 2014 guidance but yet holding above $500 support. I think this is a good level to get in and Carl Icahn agrees with me. The billionaire upped his stake over the last week. Looking past the first quarter weakness the rest of 2014 is supposed to be good. Once this near term fear runs it course Apple will move back up. I am trading a call with one month until expiry and a target entry below $505.
More Tips by the Geek – 02/03-10/2014 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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