Today is a big news day in world markets and it’s important to note that the markets will be expecting the US Federal Reserve to make a statement regarding the interest rate, which currently stands on the 0.25% level. Changes to the interest rate can have a significant effect on market conditions. Although the news won’t reach the market until 17:30 GMT, the market dynamic will center around this issue today. There is virtually no other news slated for today so all analysis will revolve around this news story, which in fact is very big. The fact is, the Federal Reserve has signaled repeatedly that it has no intentions of changing the interest rate today or possibly even in the future. However, along with the actual interest rate decision, which really isn’t expected to change, the central bank makes a statement called the “FOMC minutes” which is just the protocol of the bank’s previous meeting. Analysts will try to read into the wording in the protocol in an attempt to decipher whether any future changes are expected in the interest rate as a result of new rhetoric or sentiment amongst the bank’s officers.
US stock markets finally got a reprieve as the Dow headed higher for the first time since mid last week. The index finished 0.58% higher as digital options should have been profitable with Above options trading signals which we provided yesterday. Specifically, we explained that an appreciation in the Dow stock index could be taken advantage of and that’s exactly what occurred. The trading signal we provided was a BUY signal at 13000 and simply enough, the index closed the trading day at 13001.56. This is a scenario that should cause traders to better understand why binary options can be such a powerful financial instrument. The fact that the market finished higher just 0.011% above the trading signal while the payout on such an option was higher than 75% is a powerful statement. Think about it this way, despite just a small move, the payout on the trade was nearly 7 times higher than the move itself. Obviously, this can work the other way around but traders need to take in consideration that actual volatility of every market before rushing to judgment
Today it will be hard to expect solid trading signals on the Nasdaq after the drop in the index yesterday. The stock index, which dropped 0.3% to 2961. This is just a bit too far away from the trading signal at 3000 but it’s possible that this resistance will in fact be broken today. As such, be prepared to take Above options on the Nasdq index.
We are still watching Apple (APPL) stock which reported better than expected earnings. We recommend watching this today as well as Exxon Mobile, XOM, which is nearing the 87.5 trading level. That price level should be very important to binary options traders as the level will allow them to take Above options upon any break. We don’t expect the market to come back down after any significant break of this level so the risk level of this is very low.