Article source: investing.com
Today’s Binary Options Trading Strategy:
• Equity Index: S&P 500
• Timeframe: H4 (Hourly Chart)
• Binary Option Trading Recommendation: Seek binary call options on dips below 2,080.00
• Upside Potential: The upside potential for this binary call option is 4,950 pips to 2,129.50
• Downside Potential: The downside potential for this binary call option is 2,500 pips to 2,055.00
The S&P 500 was exposed to a corrective phase which took this equity index from its most recent intra-day high of 2,129.50 reached on June 22nd 2015 to its current intra-day low of 2,055.00 which was recorded on June 30th 2015. Binary option traders who took advantage of equity index option trading are now eying binary call options in the S&P 500. Fundamental data released during the US trading sessions is expected to mix with technical indicators and allow this equity index to advance back into its horizontal resistance level.
Price action is now trading inside of its horizontal support level from where it is trying to stabilize before attempting its next move. The S&P 500 is expected to retrace its corrective phase and move to the upside. Binary options traders can take advantage from the anticipated price action reversal with binary call options. Today’s binary options trading strategy suggests call options to be placed on dips below 2,080.00 for a risk/reward ratio of 1.0/1.98.
Volatility decreased during the corrective phase, but has gradually increased after the false breakdown below its horizontal support level. Equity index option traders are expecting a further increase in volatility as buyers and sellers are set to square off inside of an important horizontal support level. Sellers are anticipated to exercise an increase in downward pressure in order to extend its corrective phase, but the most recent intra-day low of 2,055.00 is likely to hold any potential drift lower from current levels. Buyers are expected to use the reversal of the false breakdown as a platform to push the S&P 500 to the upside. This favors binary call option in this equity index.
The S&P 500 will face its first resistance level at its intra-day high of 2,090.75 reached on June 29th 2015. This level marks the high after this equity index opened Monday’s trading session with a gap to the downside. A breakout above this level will take the S&P 500 to its intra-day high of 2,115.25 which was recorded on June 11th 2015. This level represents the high of a previous advance. The final resistance level is located at its intra-day high of 2,129.50 which was reached on June 22nd 2015 from where a double top formation may emerge.
The following economic data out of the United States is expected to impact the S&P 500:
Non-Farm Payroll Report & Unemployment Rate for the month of June:
• Expectations: The addition of 230,000 jobs is expected for the month of June, an unemployment rate of 5.4%
• Previous Report’s Data: The addition of 280,000 jobs was reported in the month of May, an unemployment rate of 5.5%
• Impact on the S&P 500: The expected data from today’s NFP report is likely to apply upward pressure on the S&P 500 which favors binary call options in this equity index
In addition the following economic report out of the United States is also expected to impact the S&P 500:
Factory Orders for the month of May:
• Expectations: A monthly contraction of 0.5% is expected for May
• Previous Report’s Data: A monthly contraction of 0.4% was reported in April
• Impact on the S&P 500: The anticipated contraction in factory orders is likely to be overshadowed by today’s NFP report; this favors binary call options in the S&P 500.