Binary Option Analysis – Markets Slide as Investors Reexamine Last Week’s Gains

Sep 8, 2011
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Binary Options Trading analysis written by Bradley Welcher - BinaryOptionStrategy


Equities

The Bank of Japan intervened in the currency markets, in an attempt to weaken the yen to aid exporters. The move initially pushed Japanese stocks higher, but the Nikkei closed down .7% as sellers took advantage of the bounce. The Kospi slid 1.1%, the ASX 200 declined 1.3%, and the Shanghai Composite eased .2%. The Hang Seng closed down .8%, but ended the month up an impressive 12.8%.

A fierce wave of selling hit European markets, as investors focused onItaly’s debt. The DAX and CAC40 both skidded 3.2%, while the FTSE shed 2.8%. Italy’s MIB index tumbled 3.8%, and European banking shares slumped 6.6%, as yields on Italy’s 10-year note remained above 6%, despite last weeks European Summit.

Selling continued across theAtlantic, as the Dow tumbled 276 points to 11955. The Nasdaq shed 1.9%, and the S&P 500 closed down 2.5%, while the VIX jumped more than 10%.

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Stocks Erase some of Last Week's Gains

MF Global Finance filed for bankruptcy protection, adding to the pressure on financials.

Humana shares rallied 5.7% after beating earnings forecast and lifting its outlook.



Treasuries and Commodities

Bonds soared as investors questioned last weeks progress on the European debt front. 10-year notes spiked 1 25/32 to yield 2.11%, and 30-year notes rocketed up 4 30/32 to yield 3.13%.

Commodities traded lower almost universally. In energy, crude oil slipped .74 to 92.58, and gasoline dropped 1.9% to 2.596. Natural gas bucked the losses, inching up .1% to 3.928.

Gold fell 1.8% to 1716.20, silver dropped 2.8% to 34.30, and copper fell 2.7% to 3.605.

Agricultural futures slumped universally. Among the losers, coffee closed down 3.5%, and wheat slumped 2.5%.



Currencies

The Yen tumbled 3.1% to 78.18 and hit 79.49, after the Bank of Japan (BOJ) intervened in the currency markets. In August, a similar move by the BOJ was quickly undermined by sellers, so it remains to be seen if this effort will succeed.

The Euro dropped 2.1% to 1.3856, and the Australian Dollar fell 1.6% to 1.0536 as investors cashed in on last week’s sharp gains. The Pound closed down a modest .3% to 1.6084, and the Canadian Dollar fell .9% to 1.0001.



Economic Outlook

The Chicago PMI report showed a slowdown in business activity, as the index fell to 58.4 from 60.4.

Tuesday’s reports will include ISM manufacturing index, construction spending, and monthly auto sales figures.

Earnings are due from Pfizer, Credit Suisse, and Dollar Thrifty.