As we warned yesterday, global markets headed down again and it looks as though today will be no different. The major US stock indices fell yesterday for the 3rd straight trading session. The Dow Jones stock index dropped 0.65% to 12653 as the S&P 500 fell 0.81% to 13541. We explained a bit more in depth what will occur if the Nasdaq falls and as it fell 1.0% to 2902, a support was broken along the way. This means, binary options traders should have been able to make a nice profit on at least one of the 2 trading signals we provided yesterday. On the other hand, the break of 2900, which we also expected, didn’t have enough momentum. The stock index finished the day slightly above this level at 2902 and this is what we would deem a false break. It’s unfortunate but part of trading. On the other hand, it sets up the trading today with a strong trade ready for us as soon as the US trading session begins. It means that 2900 is still a support and if broken, will allow binary traders to take a Down option with a low risk trade.
The drop in the US was not matched in the European markets. Actually, the Europeans saw slight gains on stocks as some of the worries surrounding the Italian and Spanish debt were relieved slightly.
The reason this occurred is that the Euro zone finance ministers, during a meeting, agreed to give aid to Spain’s banks before the end of this month. The European markets took this as very good news and pushed stocks there higher. The DAX finished the trading day higher by 0.79% to 6438 and the FTSE closed the day up 0.65% to 5664. 6535 is the next resistance for the DAX, so binary traders looking for a solid trade early in today’s session could use Up options on any break of this level. It looks very possible and a break of this level will likely lead to a bit more momentum. If this then occurs, we could see the major resistance at 6578 break thereafter. That would then distinguish the current trend as an outright uptrend. But for now, we would be happy to just see the first resistance broken.
The lack of correlation between stock markets has caused many traders some trouble while analyzing the markets. With the Nikkei heading down today (by 0.45% to 8817) while European markets head higher, it’s difficult to tell where markets will go. It’s hard to anticipate things without solid correlations. However, there is a good chance US markets will head higher. It can happen today if the Europeans manage a good trading day. If the European stocks head higher, it could allow stock indices in the US to climb higher as well. The reason is, there is no major economic news today, so there doesn’t seem to be a reason to create new reasons to sell. In addition, stock index futures prices are near break even. So any good news could possibly push stock indices in the US higher
By the Goptions.com Binary Options Dealing Room