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Originaly posted by Michael Hodges.

S&P at Long Term Support Ahead Of Earnings Season

S&P 500
Call/Put = Call
Entry = Below 1570
Expiration = Three Days

As I have said, the SPX long term trend is broken. This break is also testing the long term support of the previous all time highs. Indications are bearish but heavily oversold in the mid, short and near terms. Support is not truly broken yet but I think it is a question that will be soon answered. There is another technical support associated with the 1590-1600 level- the bottom of a 7 week consolidation range prior to reaching new highs. Adding to the support case is the 150 day EMA which has just crossed the 1590 level and is only a few points lower than the early Monday lows.

What I have my eye on now is earnings season, which officially starts in 3 weeks with Alcoa but has really started last week with Oracle, Redhat, Micron and a host of other tech companies. So far reports are as mixed as they have ever been but signs are still pointing to better earnings on lower than expected revenue and a mixed outlook. I think the long term average will prove to be a point of support, if only in the short term, as the longer term investing community picks up cheap good stocks. I am trading a 3 day call on the S&P 500 in order to make sure it closes before the end of the week. Target entry is below 1570 with a three day expiration.

Gold Could Go Lower

Call/Put = Put
Entry = Above 1285
Expiration = Week

Gold is looking real bearish with its recent break below my previous target of $1326. Adding to the bearish momentum is a new down grade in long term gold prices. The new GS target for gold at year end is $1300. On a technical basis gold is indicated much lower than that, not to say that gold prices won’t end the year around $1300. For now, my new downside target is $1200 based on my indicators and projections. I am trading a put on gold with a target entry above $1285 and a one week expiration.

Asia Providing A Re-Entry Into The Yen

Call/Put = Call
Entry = Below 97.50
Expiration = One week

The credit crack down in China that sparked the decline in Asian stocks has also provided a good re-entry point for a USD/JPY call. The pair is trading just under resistance with bullish indicators, including the Time Series Forecast. This indicator is confirming the bounce from 95 and the longer term trend in the USD/JPY. There is still some resistance ahead so I am keeping my expiration time tight. I am trading a call on this pair with a target entry below 97.50 and a one week expiration.

Euro Has Sold To Support

Call/Put = Call
Entry = Below 1.310
Expiration = Three days

The EUR/USD has sold off to a long term support level since the FOMC release last week. This level is in mid-range compared to the last 6 months or so and an important one for binary traders. This level is the line at which the pair found resistance three times, broke above once and is now indicated as support. The pair is oversold here and adding to that is the extreme level of the pair in comparison to the TSF line. I am trading a short term call on the EUR/USD with a target entry below 1.3100 and a three day expiration.

Banking On JP Morgan

Call/Put = Call
Entry = Below $50.50
Expiration = One Month

The banks are not being sheltered from the recent financial storm. In fact, they have been hit pretty hard. However, with rising interest rates in the housing sector they are looking good for increased earnings in the current and future times. JPM is sitting on a long term support and extremely oversold, I think this is a good time to get into this one again on an early play for earnings season. I am buying a call on JPM with a target entry below $50.50 and a one month expiration.