World markets fell yesterday showing losses everywhere from the US to Germany. The Dow fell yesterday by a small margin of 0.08% to 13268 as the S&P fell 0.25% to 1402. The DAX fell 0.75% and the FTSE tumbled 0.93%. For binary traders, the fact that the S&P is sitting just above a support a 1400 is good news as it provides for a number of possible trading approaches which we will discuss further below. Another bright spot for the trading day was the fact that the Nasdaq actually headed higher despite all the bad news coming out. The cause of the declines mentioned above was primarily due to poor manufacturing data from Europe in addition to worrying news from the US about the state of the private employment.
As is the case every month, the start of this one is no different with the release of the ADP employment report, slated each month 2 days before the release of the Non-Farm Payrolls (NFP). On Friday, the NFP will be released at 13:30 GMT and the real market action will probably be seen. However, yesterday showed what bad news can do to the markets as the ADP report showed that private employers added 119,000 jobs in April. This figure was well short of the 177,000 expected. The poor result will cause many analysts to expect a lower NFP report, which could push markets further down today and possibly all the way into the hour of the NFP release. This is because analysts are amending their NFP expectations lower just 125,000 to 150,000 jobs last month, well below a Reuters consensus forecast of 170,000. But this can also have a number of effects for binary traders as the fact remains, when you lower expectations and they have time to be priced into the market, a slightly better figure may suddenly cause a rise in the market prices.
As such, binary options traders should stay very alert today and stay clear of downward pressure on the markets. The first possible trade of the day could be the S&P which is currently at a support just above 1400 at 1402. Any break of 1400 should allow BELOW options to be used.
Our expectations for a break in Exxon Mobile shares above 87.5 were again out on hold when the price of the stock dropped again, just 1 day after testing the resistance. We still expect a break of this level and recommend binary traders keep focused on this level throughout today and the week.
Forex comes back to focus with the USD/JPY which just last week tested the support at 79.5 but made a quick recovery thereafter. We think that the forex pair could test again today which would allow binary traders to take BELOW options on any break of 79.5.