The hardest hit by the downward movement was actually the EUR/USD. Sure, the S&P fell below the 1500 support level and finished the trading day at 1495, but the EUR/USD toppled over from 1.3645 earlier yesterday and is now trading at 1.3485. The DOW also fell below critical support levels and finished the day at 13880 breaking through the support at 14000 on its way down.

In other news, very early this morning, AUD/USD fell 0.1% to $1.0423 after the Reserve Bank of Australia, the RBA, kept the Australian economy’s interest rate at 3.0%. This was an expected move as the central bank did make some interest rate cuts in December and another similar move would have been a very big surprise.

As reported by Yahoo Finance today, markets across the globe are undergoing a correction and the EUR/USD is facing a correction based on profit taking. Due to the speed at which the currency pair headed higher over the last couple of weeks, Hiroshi Maeba, head of FX trading Japan at UBS in Tokyo, believes that this recent drop in the currency pair is just part of the way the market is trading during this round of corrections and should be seen as perfectly normal and the reasoning behind this is that he believes that the market will push back higher in short order.

We too see the same possibility as being the most likely. A further drop seems very unlikely due to the increased risk appetite in the markets these last weeks and nothing seems to be able to really put a damper on it. So sure, there could be further corrective pressure to the downside, but it seems to be very short lived.

Looking ahead to the coming trading day, binary options traders will continue to monitor the charts as no major news is expected today. The main assets traders will be following will obviously be the likes of the major indices like the S&P and DOW as well as forex pairs like the EUR/USD.

But the individual stocks out there are incredibly interesting as well. Keeping an eye today on tech stocks like Google, which reached an all time high, seem to be a great choice to follow today. The stock might test highs above 775 today and binary options traders need to be remain vigilant as the downside might also be tested with this stock.

The day started well enough for US stock indices as Retail Sales figures surprised with a slightly better than expected release. The market consensus was for a reading of 0.2 but the release turned out better at 0.3. The surprise to the upside helped retail stocks head slightly higher as well but the influence of the crashing stock price of Apple was not enough to keep momentum higher.

So now binary and stock traders are asking themselves the simple question: is Apple stock crashing? The simple answer to this is actually, yes, it is crashing. After losing over 8% this year alone, the stock price is certainly in dire straits. We explained as early as last week that the stock was exhibiting the early signs of a head and shoulders. But now that it’s pretty clear that the head and shoulders has in fact made it on to the charts and the recent break was the “collar” trend line support, the rest is really clear. The stock is expected, according to classic technical analysis, to head down another 200 points a target that sends the stock all the way back down to the 300 level which is actually less half the price it set back in mid September above $700.

If this does in fact play out according the rules of technical analysis, this will be a colossal collapse of one of the biggest companies ever to have made it on the S&P index. This is not us being overdramatic. The charts are very clear and with the stock now down below 500 after creating a downward gap back on Monday, things are certainly not looking good. With the break below 500, the stock has set in motion a strong trend likely to cause issues for the S&P in the coming day as well. Expect this breakdown to maintain momentum and don’t pay to much heed to a possible minor correction back towards 500. Reversal strategies will be those that gain the most on days like this with more breaks to the downside the real focus of the day.

Other news for the day will be the release of the CPI today at 13:30 GMT and is expected to be a reading of 0 as compared to last month’s -0.3.  Core CPI is expected to release a figure of 0.2 as compared to last month’s 0.1.

But the risks to this positive outlook are clear to binary options traders. For those who don’t really know how to get a feel for the risks associated with the current uptrend, you need only head to the CNN Money weekly Fear & Greed Index which is an indicator corresponding to measures of risk appetite versus risk averse. The index includes figures ranging from the current stock price momentum, junk-bond pricing and options activity. Basically the index comes up with a current reading of what they term “extreme greed” and this can be translated into what technical analysts term as overbought. But it’s not really the same thing. When technical analysts see a chart’s indicator pointing towards an “overbought” situation it can mean more than one thing as overbought really only means that there is a lot of momentum in the market. It’s also based on the charts’ derivative values and not on values from the world at large. But the Fear & Greed indicator measures a broader spectrum of numbers and events from outside the stock index and as such provides an interesting look at the current situation in the market.

So looking ahead when the index is really at a near all time high “greed” level, many wonder whether this can really continue. We are of the belief that the answer is yes. Quite simply, the market is still solid and stable and binary options traders have taken notice. As a result of this, indices, forex pairs, and commodities have all been providing clear trends.

For the coming trading session, traders will want to focus on the charts because there are no major news events to expect in the coming day. No economic data is expected today either. The only items on the calendar are earnings reports from US companies but there aren’t any majorly traded companies reporting today and as we mentioned, the charts will be the guiding light for the day. Forex traders will be looking at 1.3360-1.3365 as a resistance and support level for the coming day. Any break will lead traders to take Up options from below. But after the level is broken, binary options traders will likely be looking at a break to the downside as an opportunity to take Down options.

Look for opportunities on stocks like Facebook and Google which booth continue to trend higher today.

The S&P headed right past the critical resistance at 1466 and finished the day at 1472 which for binary options traders should be very significant. The reason for the importance placed on this was due to the fact that many didn’t expect the 1466 level to break and now things look very interesting for the index as we are in unfamiliar territory. These are levels not seen since 2008, where the index managed to spend less than a week at these levels only to crash back down. So if the market closes above 1466 today as well, it will be signal longer term investors that it’s time to enter the market and this can create a huge influx of capital into the markets to the upside and further push the S&P to higher highs.

The story with the EUR was even more optimistic seeing as how the market wasn’t expecting ant change in monetary policy from the ECB (European Central Bank) and actually got nothing in the way of change. What was received about 45 minutes after the ECB decided to leave rates at record low levels of 0.75% was a very optimistic speech from Mario Draghi, the ECB president. The message was somewhat cautious, but still aroused optimism in the market and helped the forex market push the EUR/USD to new highs unseen an weeks. For binary options traders, this was a great move as there were no less than 3 resistances broken along the way, leading to at least 3 profitable trades for our readers.

We also sent a trading signal on this as the market was ready to erupt and are hopeful that readers of the evening trading signal managed to take advantage yesterday.

For the coming day the only news of interest is the Trade Balance in the US at 13:30 GMT which is expected to post results of -41.3 billion as compared to last month’s -42.2 billion.

With little in the way of news, we are likely to be in store to a similar day to yesterday where we pointed to the likelihood of a rise in the markets well in advance due to the lack of news and indicators like stock futures and others all pointing higher. So today, most of the same indicators are again pointing higher and we are very optimistic of a solid day for the US markets. Especially after the Japanese posted a wonderful day finishing ever closer to the critical 11,000 level and this leads us to believe that today will be a “green” day again as stated by Investing.com 

Binary traders can simply wait for the S&P to break above 1466 today, which looks likely, and take Up options with what look to be low risk trades. The same goes for the Dow breaking the 13405. Although this level was tested and even momentarily broke, the index didn’t manage to finish the day above the level and as such leaves the level in play for the coming trading session.

The reason we are so optimistic about the coming trading sessions is due to a number of factors. For starters, the stock index futures are pointing higher and look to be enough to get the bullish into the market. But there are certainly more indications of a positive trend brewing. Another good sign of things to come is how the Japanese market is closing up at this moment. The NIKKEI is currently up 0.77% to 10659. With European markets closing higher and later the US and Asian markets looking higher, it looks rather likely that the US markets will pick up where it left off yesterday and head higher today.

As explained earlier this week, this is the only day with any significant economic news and it starts pretty early with the Bank of England’s interest rate decision at 12:00. No changes are expected at the BoE but surprises can always hit the market so be prepared for anything. Only 45 minutes later at 12:45 GMT, the central bank of Europe releases their own interest rate decision. Although they too are not expected to make any changes they will be holding a press conference at 13:30 and the rhetoric could move markets. Especially volatile may be the forex pair EUR/USD. There is no other major economic news expected for the day aside from Initial Jobless Claims in the US at 13:30 GMT. The markets are expecting a figure of 365k as compared with last week’s 372k. These are very high numbers and actually show how weak the US economy really is. But any surprise to the upside can further assist the US market’s move higher for the day.

The EUR/USD is currently trading near the lower boundary of the range at 1.3044 after heading down nearly 21 pips since the session in Asia began a number of hours ago. Binary options traders need to be alert today. If the USD continues higher it could push right past the 1.30 level and target 1.29 thereafter

According to Yahoo Finance  “U.S. corporate profits are expected to be higher than the third quarter’s lackluster results, but analysts’ estimates are down sharply from where they were in October.” With some companies already reporting as of yesterday, we are expected to see some volatility in the markets. Most reports are published either directly before or directly after the trading session so as to not disrupt trading. But this can cause large gaps to form in stocks due to after-hours trading and excess supply or demand. As such, binary options traders need to be fully aware of when the stock they are about to trade is reporting on its earnings, leaving yourself exposed to large moves in a direction that may be to your detriment. To be on top always check. But today, there are no major companies with reports due so you are likely in the clear.

Binary options traders not looking in the direction of stocks or stock indices are probably being drawn in by the downtrend of the EUR/USD. Amongst forex pairs, the currency duo have been the fastest movers of late. Albeit in a range, volatility has been high and as a result, traders have been able to take advantage of strong moves above and below critical resistances and supports. Trading near 1.3090 at the moment, the forex pair managed to break below 1.3105 and now targets the next critical support at 1.3025. Binary traders will be quick to point out that if the 1.3025 level is not broken and there is even a slight rebound that a head and shoulders could be in the process of formation. If that’s the case, expect at least 1-2 full days above the 10.3025 level before a crash below it.

For those who still want to deal with stocks, Google stock (GOOG) looks interesting today. Look for the support level of 722 to be at least tested today. A test of the level will likely lead binary options traders to look for a bounce and as such reversal strategies will likely be employed. If the stock heads higher however, the current resistance is at 738. In this case, we are looking for a break. Only a break will prompt an entry point for binary options traders. Look for a break before entering with Up options.

As with any trade, make sure to validate the momentum using RSI and MACD prior to entry

The NFP report is released every first Friday of the month and that’s today. It is being released a day after the release of the ADP employment change report which is not the official number but can certainly help lead investors to the direction of the NFP report. The ADP private sector payroll report showed the addition of 215,000 new U.S. jobs last month, up from a revised 148,000 in November. In addition, the release of the initial jobless claims which rose by 10,000 to 372,000 last week. Consensus opinion amongst economists were for an expected reading of 360,000 claims.

But what really set markets in motion yesterday was the release of the “FOMC minutes”. These are the notes from the previous Federal Reserve, Central Bank of the United States, monetary policy meeting. It was shown that there are a number of board members who are seriously concerned about the “potential risks of the Fed’s asset purchases on financial markets, even if it looked set to continue an open-ended stimulus program for now”, according to Yahoo Finance.

The release of the notes caused US stock indices to drop slightly. It wasn’t overly dramatic and it’s pretty obvious to all investors that the Federal Reserve is increasing certain risks by continuing the program indefinitely. Binary options traders watching the indices of the world closely though should see an opportunity brewing in the drop as if it was just a small correction to gather momentum, then it sets in place the possibility of a test of the next resistance at 1466. A break of 1466 would allow binary options traders to take Up options with very low risk. It’s a level previously tested on multiple occasions back in September and October. But the level hasn’t been broken since 2007 and this causes many to suspect that the resistance may be too hard to break in one day. So many technical analysts are opting for a reversal strategy for the time being.

What this means is that on any test of the 1466 level, binary options traders could opt first for a Down options before any break occurs. This could be a very profitable strategy today seeing as how this could be a very tough resistance to break making every test a potential trade. However, once the break comes along, we recommend switching the strategy for the break strategy that could potentially be a smaller risk trade.

According to Yahoo Finance, the deal between the political parties has now “set up potentially bruising showdowns over the next two months on spending cuts and an increase in the nation’s limit on borrowing. Republicans, angry the fiscal cliff deal did little to curb the federal deficit, promised to use the debt-ceiling debate to win deep spending cuts next time.”

So with the new fight being that of the debt ceiling, which is the same issue the two parties faced back over the last summer, investors should be feeling a bit more worried in our opinions. Last time, the debating between the parties and the deal to solve the debt ceiling crisis led to credit agencies reducing America’s credit rating and it could be far worse this time. The reason is, Republicans are feeling as though they lost the previous battle and won’t allow themselves to lose this next one.

With markets as sensitive as they are, we expected a series of drops yesterday due to the fact that the fiscal cliff deal failed to address the budget issue. But markets didn’t mind. They headed higher dramatically, taking the results of a deal as the best news possible.

The S&P flew past resistance at 1428 and finished the day 2.54% higher to 1462 in one of the strongest days in the indices recent months. The Dow did very well also as it headed 308 points higher or 2.35% up to 13412. The NASDAQ index was the most impressive after soaring higher by 3.07% to 3112 which constitutes a rise of 92 points. This was after the European markets already showed their strength earlier in the day as well.

In forex, the EUR/USD is heading downwards as the USD strengthens across the board. Today should be more of the same and binary options traders would do well to follow the charts. However, not any less important are the economic indicators expected for the day. At  13:15, the ADP Non Farm Payrolls Report (NFP) is expected. It is released each first Thursday of every month right before the US Labor Department’s own NFP report. Markets take the ADP results in more subdued fashion than that of the Labor Department’s NFP report. The expected results today is an increase to 133k new jobs created in the US economy as compared to last month’s 118k.

15 minutes later, the Initial Jobless Claims report will be released with expectations for a result of 355k as compared to last week’s 350k.

The only saving grace is that many in the political world are claiming that a deal is imminent. Maybe that’s hopeful optimism, but we do hope that is really the case. Binary options and other investors are keenly interested to know how markets are going to react today. For starters, with a bill already passed, technically, the market is nearer to a solution. However, the risks have not yet been avoided and markets can be very fickle in this regard.

Stocks in the US rose sharply in the last day of trading on Monday as the S&P climbed 1.69% to 1426, just below critical resistance at 1428. In addition, the Nasdaq had a monster of a day after rising 2.0% and shot right past the 3000 level resistance. The Dow had a great day as well after heading up by 1.28% to 13104, this after breaking resistance at 13000 by a far margin. But things were different over the weekend and it really seemed like a deal was done. Now, it’s not even close to as clear and anything is possible.

In the coming hours, the European market will react to the passing of the bill. For now, Asian stocks markets are closed for New Year’s Day (China and in Japan it’s an “exchange holiday) so there is no way to get any indication from that side of things. Binary options traders will need to be acutely alert and look closely at the developments in the European session to get any inkling as to the future movements. For now, the futures market in the US is pointing down very slightly which is indication enough of the uncertainty facing the markets this coming day.

Today at 15:00 GMT, in addition to any developments as they pertain to the fiscal cliff, all binary traders will be tuned in to the release of the ISM Manufacturing index, a critical industrial index that can move the EUR/USD and other forex pairs in great amounts quickly. The market is expecting a figure of 52.2 as compared to the previous 52.5. Any figure above 50 is indication of an expanding economy. Markets will simply be looking at that based on these rather low expectations. Any figure well above 54 will cause the USD to head higher in quick order. Don’t expect such strides in the manufacturing sector of the US, as past indicators have been tepid at best. Look for a rather close figure to that which is expected and a moderate reaction for the forex pairs.

Sure, in Japan the market is in a post-election euphoria, thinking the Shinzo Abe will make drastic changes to the Japanese monetary policy. But from an economic perspective, we really aren’t very confident about the likelihood of such a change. Japanese interest rates are at near zero levels and there is little more the Bank of Japan can do to intervene with the market and get the country’s economy of the deflationary cycle it is in.

But there are always two sides to every story aren’t there. The fact is, we are 3 days away from the fiscal cliff deadline and throughout the world, traders of all types are waiting with bated breath. Republicans want a higher tax threshold. Democrats want a lower one. Who will win out in this grudge match of populism and awkward stubbornness? We don’t think anyone will “win” per se. If the Democrats win out, then those with family incomes greater than 400k will be taxed heavily. If the Republicans win out, then they will be labeled as helping only the rich and only those with incomes of 1 million or more will be taxed heavily. There is a sort of poetic justice continuing the Bush era tax structure of only taxing “millionaires”. But as we said, there are two sides to this story. Without more tax dollars from America’s wealthier household, there are surely other problems to be met.

Binary options traders will be keen to see if this last minute meeting being help by both sides will make any difference and provide the necessary ground work to close a deal before the deadline. With the 31st of the month being a near dead trading day on Monday, this is the last real day for the markets to show a reaction. We are expecting further drops in the US. Despite the Japanese Nikkei increasing by over 0.8%, we don’t think this can be a momentum builder for Europe and certainly not for the US stock markets. Expect very slow movements in the market, as has been the case for much of the last trading sessions.

The EUR/USD is basically flat lining near 1.3243 and has little chance of making a real breakout today. Nonetheless, keep focused on the news events of the day as they have the only legitimate means of turning the market into a more fruitful playground for profit making for binary options traders. But with only the Chicago PMI as news today, expect little