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CHINA COOLS THE MARKETS

WELLS FARGO 58.345 17:30 22.02
OIL-APR17 (BRENT) 55.785 17:30 22.02
TOYOTA (US) 114.260 17:30 22.02
COLGATE-PALMOLIVE 73.085 17:30 22.02
FERRARI 65.855 17:30 22.02
TSX 60 936.300 17:30 22.02
NZD/CAD 0.94522 17:30 22.02
ALIBABA 104.995 17:30 22.02
BOEING 175.425 17:30 22.02
PFIZER 33.705 17:30 22.02
AUD/USD 0.76870 17:30 22.02
AUD/JPY 87.211 17:30 22.02
GBP/USD 1.24415 17:30 22.02
EUR/USD 1.05560 17:30 22.02
GENERAL ELECTRIC 30.305 17:30 22.02
S&P 500 2362.140 17:30 22.02
JP MORGAN CHASE 90.965 17:30 22.02
METRO AG 29.860 17:30 22.02
SILVER 17.993 17:30 22.02
AIG 64.085 17:30 22.02
GOLD VS OIL 22.1128 17:30 22.02
OIL-MAR17(WTI CRUDE) 53.980 17:30 22.02
USD/CAD 1.31958 17:30 22.02
FTSE MIB F-MAR17 18867.500 17:30 22.02
GOLD 1233.564 17:30 22.02
DOW 20760.31 17:30 22.02
TELEFONICA 9.354 17:30 22.02
AUD/CAD 1.01435 17:30 22.02
DOLLAR INDEX-MAR17 101.390 17:30 22.02
3M 185.110 17:30 22.02
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By: Adam Stone
July 9th 2014 4:44am GMT, London UK
 

Despite our, and most analyst, expectations for continued optimism in the markets, the Chinese economic came and doused our flame. It seems that the Chinese economy is in a worse state than previously perceived at least in so far as China’s consumer price index (CPI) data is concerned. The indicator showed an increase of 2.3 percent in June from a year earlier which is lower than the consensus forecast of 2.4 percent. The drop is yielding a wave of negativity throughout Asia with the NIKKEI dropping 0.37% to 15257 and eliminating our binary options analysis from yesterday, which still might be relevant later in the week – but certainly not in the coming 24 hours. But this certainly doesn’t explain why the US assets were on the way down well before the announcement in China.

The S&P index in the US fell again, for the second straight session, and this time lost an additional 0.7% to 1963. The sharp move lower eliminated our hopes for a binary options strategy here as well.

The S&P was expected to make a move for binary options traders above 2000 but we are assuming this is some sort of market based fear of heights and the vertigo associated with it will come to pass rather quickly. For binary options traders, the actual direction of a particular asset is of little consequence, but traders are always looking for the asset with the biggest trend to latch on to. With the S&P heading up, this was an easy target but once the asset starts to correct and gains are receded, it was all for nought. So binary options traders are now forced to look for the next best thing and in today’s session, it’s likely to be forex pairs to rule the roost.

The EUR/USD, which has been trending higher over the last 3 sessions, looks to do more of the same. With Chinese figures pushing down Asian markets, a run towards the EUR looks very favorable. So look for the EUR/USD to push towards the high end of the channel resistance today, above 1.3620. The current support level is based on the channel support at 1.3598 but this is quite a far distance away from current level. In fact, we don’t even expect this level to be tested today seeing as how the pressure in on the USD at the moment and it’s weighing the dollar down with no end in sight over the coming 6-12 hours. According to the charts, the trend higher looks well established now for short term trades in the direction. Look for a break above 1.3620 in the coming 2-3 hours to start taking up options. However, until such a break is seen, reversal strategies will likely try to take advantage of the short term double top seen on the 15 minute charts.

EURUSD with Binary Options 9-7-2014

Look for down options with small and short based trades until a break is seen above resistance. Make sure to keep a very close monitoring eye on the momentum indicators like the RSI and MACD as this all develops. Any major shift in momentum should mean bianry options traders completely ditch the idea of reversals and opt for a wait and see strategy change.

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Adam Stone
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Adam Stone

As COO of GOptions, my first and foremost goal is to provide traders with the most up to date info from the markets. I have been trading the markets since 2004 and have been involved with stocks, binary options, and forex trading since then. I have had no formal market education and pride myself on a self taught approach to everything related to trading. I try to focus though on both the technical and fundamental aspects related to each trading day and bring forward the most important aspects of risk/reward in the market.
Adam Stone
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