Tip from the Geek – Top 5 Binary Options Trading Tips 6/17-24/2013 – Also on CommuniTraders!
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The Market Sets Up For Bounce Ahead Of Fed Decisions
World markets began this week with a rally. The Asian markets, led by the Nikkei, rose more than 2% followed by similar gains in European indexes. U.S. futures trading was not unaffected and also showed a nice gain going into the market open. This is a big week for the markets and so far it looks like the markets are expecting it to be a good week as well. This is one of the heaviest weeks for data of the month and it also includes an FOMC meeting and interest rate decision. There is not much expectation for any changes of policy but there is a lot of expectation the Fed will allay some of the fear creeping into the markets.
Data released Monday was favorable for the rally. Empire manufacturing was better than expected and so was the housing index. The housing index, expected to come in around 45 was actually 52 and shows signs of expansion in the sector. Even without the FOMC meeting this would be a potentially market moving week. Other data being released includes existing home sales, new home starts, permits, CPI, PPI, jobless claims, Philly Fed and leading indicators. Each piece of the economic puzzle also has the capability to move the market in the short term.
1. S&P 500 Setting Up For A Bounce
S&P 500
Call/Put = Call
Entry = below 1640
Expiration = 1 Week/1 Month
The S&P 500 is setting up for a text book long term trend bounce. This technical event is supported by a strong buy signal from the stochastic oscillator. The index is moving up from the long term trend, trading above the 30 moving average and is also supported by MACD analysis. The MACD is currently on the bearish side of the signal line but my read is showing support here as well. In the short term there is resistance around the all-time highs at 1687 and in the near term markets may be volatile into the end of the week.
Because of the signal being generated here I am trading two positions on the SPX this week. One will be for a one week expiration and the other for one month. My target entry is below 1640. This is close to the 30 day EMA, an area I see the markets trading around up and into the FOMC statement release. There is some data coming out tomorrow but I don’t think it will be enough by itself to tank the market. The next significant event for the week will be the Wednesday FOMC release. After that Thursday and Friday will be very full.
2. The Yen Reaches The Original Target
USD/JPY
Call/Put = Call
Entry = Below 95
Expiration = 1 week
The yen has been strengthening against the dollar over the last few weeks as traders and investors have taken profits out of the market. The USD/JPY currency pair may now be at a point where it can find some long term support. It is currently trading just shy of 95, the original target set by Shinzo Abe. If we look back at the charts we can see 95 has been one of the most important levels over that time period. All four of the longest candles, both bullish and bearish, occurred at or near 95. They also occurred at key junctures of the nomination, election and confirmation processes for both Abe and Kuroda, as well as the BOJ policy changes. Apparent lack of support from the two of them have helped to strengthen the yen to this level but I think that this is the level the BOJ will defend. It makes sense, Abe and Kuroda are cohorts in this scheme to devalue the yen. I am trading calls on the USD/JPY with a target entry below 95 and a one week expiration. I will be watching closely and may add another position later this week so keep an eye out on Communitraders.
3. Still Bearish On Gold
Gold
Call/Put = Put
Entry = Above $1385
Expiration = 1 Month
My Trading Advice
I am still bearish on gold. I am still looking for the retest of the lows around $1326. My analysis still supports this move. Gold will likely be a little volatile going into Wednesday afternoon but should find direction once the FOMC statement is out. I am trading puts with a one month expiration and a target entry above $1385.
4. A New Perspective On The Euro Trade
EUR/USD
Call/Put = Call
Entry = Below 1.3350
Expiration = 1 week
My Trading Advice
I have been bearish on this pair over the last few weeks and not done very well with it. The pair is trending up now so I am changing my trading stance to suit. The pair is trading above an important Fibonacci sup/resistance line and looks good for a move up to retest the recent highs around 1.3500.
I am trading calls on the EUR/USD with a one week expiration.
5. Faith In Jamie Daimon
JP Morgan
Call/Put = Call
Entry = Below $54
Expiration = 1 week
My Trading Advice
The markets appear to still be in rally mode and the financials are still leading the charge. JP Morgan is trading near the 30 day moving average with bullish technicals and room to move up. The stock and the sector have some technical resistance ahead of them, including the FOMC statements, but I think that it may be discounted. The Fed signaled last week that old Ben Bernanke would soothe the markets so I expect to see some clear sign of when, where and how tapering will begin as well as supportive commentary on the markets. I am trading calls on JPM with a one week expiration and target entry below $54.
More Tips by the Geek – 6/17-24/2013 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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