Tip from the Geek – Top 5 Binary Options Trading Tips 03/10-17/2014
Another Week, Another New High?
Last week brought another new high for the major U.S. indices such as the S&P, Dow Industrials and NASDAQ Composite. The new highs came along with signs off life in the U.S. economy, if not elsewhere. Jobs data released last week in the form of ADP, Challenger, jobless claims, NFP and Unemployment rate suggest that there is some resiliency in the labor market and that the jobs picture could be on track to see improvement into the spring. ADP numbers were not great, less than OK in my opinion, but in line with the NFP figures of the last two months so not too shocking. It was the drop in planned layoffs, the decline in overall unemployment claims and the surprise jump in the NFP that points to a resurgence of jobs creation and increased employment.
Clouding the waters are problems in the Ukraine, poor data from China and an upcoming FOMC meeting. Russia persists with its claims of shielding Russian nationals in the Crimea, the Ukraine still refuses to give up the Crimea, the Crimean people are split but seem to be majority in favor of Russia and as of yet international diplomatic efforts are unsuccessful. The simmering pot of trouble is a cause of concern for the EU and the U.S. markets. On top of that weak data from China shows that the economy in that country is still weakening. One caveat is that some of the data was heavily impacted by curbs to abuse of “over-invoicing” in order to move capital in and out of the country. Both of those things are enough to give pause by themselves but with the FOMC meeting on the horizon I don’t expect much upward movement from equity indices this week.
1. SPX Cresting A Wave
S&P 500
Call/Put = Put
Entry = Above 1875
Expiry = One Week
My Trading Advice
I’ll bet you are all thinking to yourself, what the hell, this guy is a long term bull so why is he trading a put today? It’s because upon review of my trading logs on CT I can see that one of the ares where I often have losses is when I fail to recognize the peaks of near and short term waves occurring in a long term up trend. What do I mean? I am still a long term bull but in order to get into a trend following position I have to wait for a better entry which could be a pullback and/or test of support. I might trade on this with a long term monthly call, which I usually do with generally positive results, or I could capture the near term bearishness that I expect.
The long term trend is most definitely up. The S&P 500 made a new high last week with strong bullish indicators that point to higher prices in the future. In the nearer term there are some divergences, candlesticks and moving average signals that indicate weakness. It is not uncommon for a pullback after making a new high, not to mention the fact that the index is also well above the 30 day EMA. For these reasons I am trading a put with a target entry above 1875 and one week until expiry.
2. It’s About Time
USD/JPY
Call/Put = Call
Entry = Below 103. 25
Expiration = One Week
My Trading Advice
I am not sure what caused the rally, there was no USD or JPY catalyst involved. Perhaps the Monday decline driven by the Ukraine/Russia event poked a hole in the bubble of bullish traders waiting to pounce on a good entry. The pair has now moved up from a second, strong, test of support and is approaching resistance. The pair is moving up from the short term moving average with rising momentum and an early stochastic signal. There may be another test of the moving average but the trend in this pair is up, the fundamentals are pushing it higher and it looks as if traders have started to pile into the trade. I am trading a call on the USD/JPY with an entry below 103.25 and one week until expiry.
3. Gold Holding At Elevated Levels
Gold
Call/Put = Call
Entry = Below $1335
Expiry = One Week
My Trading Advice
Global currency shifts such as the one mentioned above in the USD/JPY and in the EUR/USD, EUR/JPY and others are helping to support gold prices. At the same time the Crimea situation is also helping to keep traders in the safe haven metal. Longer term I see gold moving down to retest last years lows but for now the metal is up. I am trading a call this week with an expectation for gold to retest the highs around $1350. Next week when the Fed meets things could change altogether but for now I am trading with a target entry below $1335 and one week until expiry.
4. Oil Bubbling To The Upside
Oil ETF
Call/Put = Call
Entry = Below $36.25
Expiration = One Week
My Trading Advice
Oil prices have gotten a little volatile of late due to supply disruption in Sudan, Libya and other places like the Ukraine/Black Sea. Adding to the issue is storage levels and winter weather in the U.S. Not leaving out expectations the IEA and OPEC both predict demand to rise in 2014. Asia and EU data aren’t really in support of that but U.S. data is. What will be the result, who knows but for now oil prices are sitting on support along the short term moving average while in a longer term uptrend. For this reason I am trading a call with one week until expiry and a target entry below $36.25.
5. Banks Rising With The Tide
JPM
Call/Put = Call
Entry = Below $59
Expiration = One Month
My Trading Advice
The banks are rising with the tide of economic recovery. As more and more jobs are added to the economy, more and more young folks get put to work and open banks accounts, buy houses or just simply spend money the banks make money. There will be regional and sector strengths and weaknesses but the overall trend in the Banking Index is up. I am trading a call on JPM with a target entry below $59. I am using a one month expiry on this one to give it time to move past the FOMC meeting.
More Tips by the Geek – 03/10-17/2014 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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