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By: Adam Stone
February 12th 2014 7:15am GMT, London UK
 

Despite worry about the state of the US economy and its ability to create new jobs, Janet Yellen, the new chairwoman of the Federal Reserve is going to keep on trimming. After last Friday’s dismal NFP report, some binary options traders were speculating that Yellen would waver and decide that the tapering set forth by Bernanke simply won’t get going. It now is clear that it has and there’s no turning back as the Fed decided to shut down the printing press, albeit at a moderate pace. This decision, which rocked the markets for much of January but only now in practice, had literally no effect on the markets to the downside. In fact, some analysts believe that the decision to taper the stimulus is in essence a confidence call to the markets. By stating that basically, the economy no longer needs this crutch, the Fed is stimulating the markets to head higher and increase the confidence base.

US stocks headed higher with much fanfare as the S&P headed higher by 1.11% and finished the trading day at 1819, a very impressive finish above the resistance level at 1800. The DOW actually had an even better day, closing up the session after climbing 1.22% to 15994. We were focused on the Dow yesterday and were hoping for a break above 16000, but explained that it wasn’t very likely. The resistance at 16k was strong enough to keep the market just below, but this sets up what looks to be a lower risk trade for the day ahead. Another move higher, above the resistance at 16k, will allow today for up options to be taken with what looks to be very low risk options. These are the type of trades we seek on a daily basis and all too often, traders overlook the easy trades to opt for more difficult and complex strategies involving forex.

It’s not to say that forex trading is in anyway less attractive or more attractive for that matter. It is though an issue of success rates and when trading slower moving and, possibly, easier to foresee indices – it’s easy to see why we so focus on them. Furthermore, there are really tens if not hundreds of forex analyses out there. But very few take the time to find trades capable of consistently take your account to a higher profitability level using indices.

Despite a few speeches expected today in Europe, both from Mario Draghi, the head of the ECB, and Carney, the head of the Bank of England, we expect a rather quiet start to the session.

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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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