Trade Alert: GBP/JPY broke down-69% of Tradesmarter traders are bearish
The bearish movement of the GBP/JPY continues with binary options traders increasing their BInary PUT Options positions on the pair.
69% of Trdesmarter clients speculate on the downtrend.
The GBP/JPY broke down an descending triangle at the 127.70 level suggesting a bearish trend for the pair.
Click here to trade the GBP/JPY binary option
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The Tradesmarter Team
+44 203 318 5986
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Oil and Gold Being Killed by USD Strength
U.S. Markets: Beleaguered traders have heard it all before: U.S. stocks fall because the clouds hanging over the Euro Zone grow darker by the day and that’s exactly the scenario that played out on Wednesday. A small loss for the S&P 500 sent the benchmark U.S. index to its fourth straight, its longest losing streak in a month, as traders continued to ponder Greece’s political and financial future.
Well, Greece’s political and financial future is not bright at that moment and more and more traders are catching on to that. That explains why some decent U.S. economic was overlooked and comments from German Chancellor Angela Merkel that Greece will remain in the Euro Zone had little impact.
General Electric: Dow component General Electric (NYSE: GE) used to run an ad campaign where the slogan was “GE: We Bring Good Things To Life.” The stock did just that on Wednesday. Despite a down day for the broader market, GE jumped 3% after the company said its GE Capital unit will resume paying dividends to the parent company. Any follow through or profit-taking in the shares on Thursday will create opportunities for binary options traders in GE.
Oil: $85 Here We Come? Oil names were mixed in the U.S with PetroChina (NYSE: PTR) losing 2%, BP (NYSE: BP) finishing flat and Total (NYSE: TOT) rising. Don’t be deceived. NYMEX-traded crude for June delivery lost 1.2% to settle at $92.81 a barrel. That’s the fourth consecutive closing low of 2012 for the benchmark U.S. contract. If support at $92.50 per barrel gives out, oil could easily see
$85.
Gold’s Goose Could Be Cooked: Oil and gold share one similarity and it’s not good: Both are being killed by the stronger U.S. dollar. The U.S. Dollar Index has closed higher for 13 straight days. The PowerShares DB US Dollar Index Bullish (NYSE: UUP) added another 0.22% today and is up almost 2% in the past week. Comex gold for June delivery fell $20.50, or 1.3%, to settle at $1,536.60 a troy ounce. That’s the lowest closing price since July 2011.
The Hang Seng was also higher by half a percent, but stocks in Seoul and Sydney drifted lower. In the U.S., Aussie titans BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RIO) both closed lower again with BHP closing right on its low of the day.
Key Highlights for the Trading Day
With Europe looming large and traders running out of reasons to embrace riskier assets, beware a dead-cat bounce, which is American talk for buyers being foolish enough to buy just because the market has fallen several days in a row. Opportunities will be plentiful for binary options traders during the day and it looks like the dollar could be poised to come in a bit and some higher quality U.S. listed stocks could jump, for just one day.
- 1:30 pm GMT – Unemployment Claims
Why traders care? Although it’s generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Economists expect a reading of 365,000 compared to last week’s reading of 367,000. - 3:00 pm GMT – Philly Fed Manufacturing Index
Why traders care?
Why traders care? It’s a leading indicator of economic health – businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment. The Philly Fed survey due out is expected to show a May reading of 10 compared with a previous reading of 8.5.
Binary Options Market Update: No Rest For The Wary On The Downside
- U.S. Markets: Plagued by a rejuvenated U.S. dollar and more doubts flowing from Europe, U.S. equities once again closed in the red with the S&P 500 cascading to a three-month. It wasn’t for lack of effort. Stocks were grinding higher for much of the earlier part of Tuesday’s session, but losses accelerated
toward the end of the day as traders dumped everything in sight that smelled of risk.
- Economic news was mixed at best. These were the data points released in the U.S. on Tuesday: The Commerce Department said retail sales rose just 0.1% last month compared with a 0.7% increase in March. The rise matched economists’ expectations. The Labor Department said the Consumer Price Index was unchanged in April following a 0.3% increase in March. Excluding volatile food and energy prices, the core index rose 0.2%. The April reading matched economists’ expectations. The National Association of Home Builders/Wells Fargo index jumped to 29 in May, the highest reading since May 2007, topping the reading of 26 economists expected.
- Greece remains the issue co-founding the market right now and that has been the case for over two years. No coalition government seems imminent there, but more contentious elections do. The only thing Greece can be counted on for these days is to send global markets tumbling and give traders reason to believe the Euro Zone won’t make it through the year in its current state.
- News Lows: The PowerShares DB US Dollar Index Bullish (NYSE: UUP) surged three-quarters of a percent on volume that was better than triple the daily average. The ETF, a tradeable version of the U.S. Dollar Index, reached its highest closing price since January. That means the euro is drifting lower toward more multi-month lows.
- Comex silver fell to its lowest closing price since late December. Platinum has been tarnished as Barclays and BNP Paribas lowered their price forecasts for platinum metals this year. Oil has violated the $94 mark in the U.S.
- Obviously, oil’s woes are pressuring oil stocks on both sides of the Atlantic. Shares of BP (NYSE: BP) and Total (NYSE: TOT), Europe’s second- and third-largest oil companies, respectively, have plunged in the past month. Ugly charts indicate binary options traders can profit from more downside on these names.
- Same goes for copper as the chart here indicates. You didn’t expect the red metal that many traders believe is a tell on the health of the global economy to hold up amid all the concerning Chinese economic data and Europe’s lingering woes, did you? Problems in the materials sector have taken BHP Billiton (NYSE: BHP) to within spitting distance of its 52-week low. Rio Tinto (NYSE: RIO) is further removed from that ominous fate, but its chart is equally as depressing. Like the euro, copper is trading at four-month lows.
- More bad news: BHP Chairman Jacques Nasser said the company sees commodities demand cooling.
- Black Clouds In Asia: The Nikkei was seen lower by 1.3% while the Australia’s S&P/ASX 200 Index dropped 1.8%. Stocks in Singapore were also lower by 1.3%, but the Hang Seng appeared to be getting the worst end of the deal with a loss of almost 2.7%. In Asian trading, the euro and gold continued the declines that started in the U.S. on Tuesday.
Key Highlights for the Trading Day
- 1:30 pm GMT – Building Permits
U.S. markets will again be awash in critical economic data points that have the potential to create plenty of opportunities for binary options traders. The residential construction number for April is expected to a show a reading of 683,000 new units compared with a March reading of 654,000.
- 3:30 pm GMT – Crude Oil Inventories
Oil inventory data will be released at 10:30 and if the number exceeds the consensus estimate calling for an increase of 3.7 million barrels, crude futures will almost certainly incur more downside as U.S. oil stockpiles are sitting at their highest levels since the early 1990s. And we cannot forget about the release of the Federal Open Market Committee Meeting minutes at 2PM Eastern time. This time around, it might not be enough for the Federal Reserve to say it will keep interest rates low through 2014. It might need to overtly hint at QE3.
Binary Options Daily Review: Market Has 99 Problems?
- U.S. Markets: To paraphrase the legendary businessman and lyricist Jay-Z, global equity markets have99 problems. Well, the actual count might be higher or lower depending upon to whom the question is asked, but you get the picture: Plenty of issues have turned international bourses problematic
in recent weeks and that much was evident in the U.S. on Monday as the S&P cascaded to its fourth loss in thepast five trading days and the Dow Jones Industrial Average dealt with a triple-digit loss. - President Obama can crow about J.P. Morgan Chase (NYSE: JPM) being one of the best run U.S.banks all he wants and maybe the bank is deserving of those accolades. Maybe it’s not. What is clear isthat J.P. Morgan’s downside in the weak of a $2 billion (maybe more) trading debacle has permeatedthe rest of the financial services sector.
- Sterne Agee analyst Todd Hagerman said on Monday that broker dealer stocks could face another10%-15% of downside with the potential losses being even greater for J.P. Morgan Chase. Soundslike an invitation for binary options traders to consider the likes of Barclays (NYSE: BCS), Citigroup(NYSE: C), HSBC (NYSE: HBC) and BNP Paribas, just to name a few.
- Don’t Bet On China: On Monday, we commented on how China may be trying to help global marketsand its own economy out of their funk by lowering reserve requirements for banks, the third such moveby the country’s central bank in the past seven months. Unfortunately, traders viewed that news asdesperate act by China and traders just aren’t buying in the way the market needs them to.
- Making matters, Pimco, the world’s largest bond house, said it expects China’s GDP growth to bemore sluggish this year than at any point in the previous 13 years. Analysts see any Chinese stimulus astaking longer than the market is willing to wait to have any meaningful impact.
- Citigroup projects second-quarter expansion of 7.5 percent, down from a prior forecast of 7.9 percent,and full-year growth of 8.1 percent, compared with 8.4 percent, Bloomberg reported. Mizhuho has cutits Chinese growth forecast to 8.3 percent this year from a prior forecast of 8.6 percent.
- Slumping Chinese projections are punishing Asian equity markets and commodities prices. NYMEX-traded crude for June delivery lost $1.35 to settle at $94.78 per barrel. In London, Brent crude for Junedelivery lost $1.26 to finish at $111 per barrel. The closing price for West Texas Intermediate, theU.S. benchmark, was the lowest since December 2011. Brent’s closing price was lowest for globalbenchmark since January.
- A slide in copper prices sent BHP Billiton (NYSE: BHP) to a 3% loss in Sydney trading. The Nikkeiwas off almost 1% while the Hang Seng and Singapore stocks surprised with modest gains.
Key Highlights for the Trading Day
- 1:30 pm GMT – Core CPI m/m
Why traders care? Consumer prices account for a majority of overall inflation. Inflation is important to currency valuation because rising prices lead the central bank to raise interest rates out of respect for their inflation containment mandate.
- 1:30 pm GMT – Core Retail Sales m/m
Why traders care? Automobile sales account for about 20% of Retail Sales, but they tend to be very volatile and distort the underlying trend. The Core data is therefore thought to be a better gauge of spending trends.
- 1:30 pm GMT – Retail Sales m/m
Why traders care? It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity.
Binary Options Market Update: Will China Save the Day?
- U.S. Markets: On Friday, U.S. stocks careened to their second consecutive weekly loss after J.P. Morgan Chase (NYSE: JPM),the largest U.S. bank by assets said after the close of U.S. markets Thursday that it lost $2 billion on synthetic credit securities, news that sent the shares plunging and could
prove to be toxic for the banking sector today. Synthetic credit securities are linked to corporate credit performance but the holder of the synthetics never needs to actually own the debt, making them not only complex, but risky. - CEO Jamie Dimon has warned investors that the bank could take up to another $1 billion in losses related to this particular trading imbroglio. The flap is seen as not as only damaging to shares of J.P. Morgan Chase, a bank that many global investors have until believed is one of the more financially sound major global banks, but also damaging to Dimon’s reputation. Dimon called his company “sloppy” and “stupid” in an interview with the U.S. network news program “Meet the Press” on Sunday. He also admitted he should have addressed the credit securities issue sooner. Press reports broached the subject earlier this year with Dimon scoffing at them.
- With shares of J.P. Morgan looking as though they could be in for some more near-term pain, that could spark declines for the likes of Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), HSBC (NYSE: HBC), Barclays (NYSE: BCS) and other major banks. If the shoe fits, wear it, traders might say as they throw other babies out with J.P. Morgan’s bathwater.
- China Trying: Lost among the all the glum news regarding U.S. bank stocks on Friday was that fact that China and India, Asia’s largest and third-largest economies, respectively, reported more concerning economic data.
- From the Associated Press: China reported its industrial production rose 9.3 percent from a year earlier in April, below expectations and down from nearly 12 percent in March. Investment and retail sales also slowed, though easing inflation offers leeway for fresh moves to boost growth. India’s industrial output fell 3.5 percent in March from a year earlier on weak manufacturing and investment. Output for the fiscal year ending in March rose 2.8 percent, down from 8.2 percent the year before.
- Chinese stocks were spotted higher on Monday after the central bank lowered reserve reserve requirements for the country’s lenders for the third time in seven months. The move is seen as an act of stimulus that could lead to more substantial economic stimulus to prop up growth in the world’s second-largest economy.
- The Shanghai Composite was higher by 0.2% following a 2.3% tumble last week. A rebound in Chinese stocks could stoke opportunities among the country’s large caps, something wary China bulls would love to see following the nasty declines by China Life Insurance (NYSE: LFC), China Mobile (NYSE: CHL) and PetroChina (NYSE: PTR) last week.
- Gold Up, Euro Still In Trouble: After falling to a four-month last week, gold edged higher Monday as traders engaged in what appeared to be some dip buying. Still, it’s almost impossible to get excited about the SPDR Gold Shares (NYSE: GLD). The largest ETF backed by holdings of physical gold plunged 3.7% last week and is down 5.6% in the past month. GLD violated critical support at $160 and long ago violated its 50- and 200-day moving averages indicating down is the path of least resistance here for the near-term.
- Of course gold’s tumble is being helped the euro’s descent. The common currency fell to $1.2878 today, another four-month lower as traders continue to price in how the euro will look without Greece, which seems all but assured of an unceremonious exit from the Euro Zone. In other currency news, the Aussie gave up parity with the greenback earlier today.
Key Highlights For The Trading Day:
There are no major economic reports scheduled to be released in the U.S. on Monday, but the rest of the week will not be so docile. Tuesday brings news of the April Consumer Price Index reading while the most recent Federal Open Market Committee Meeting minutes are released on Wednesday. Facebook goes public Friday. The tenor of this market is obviously risk off, which could provide binary options with some opportunities on the downside with high beta fare such as BP (NYSE: BP), BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RIO) along with financial services names.
