Binary Options Report (Oct. 17- Oct. 21)

Sep 8, 2011
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Binary Options Trading analysis written by David Frank - BinaryOptionStrategy

Markets

Stocks ended near session highs Friday following news that a group of Euro zone finance ministers have approved the next round of aid for Greece.

The Dow Jones jumped 267.01 points, or 2.31 percent, to finish at 11,808.79, firmly in positive territory for the year.

The S&P 500 rose 22.86 points, or 1.88 percent, to end at 1,238.25. The Nasdaq gained 38.84 points, or 1.49 percent, to close at 2,637.46.

DJIA CHART

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FOREX

The Euro traded higher ahead of what could be a dire week for currencies and financial markets. European leaders, the International Monetary Fund, and members of the European Central Bank will meet over the weekend and on Wednesday to determine the fate of the debt stricken Greek economy.

Fundamental analysis plainly favors Euro weakness and further fiscal turmoil is essentially guaranteed across the EMU. The numbers are scarey. Economists predict that Greece will have total debt worth a massive 160+ percent of its Gross Domestic Product by the end of the fiscal year. In real terms this means that each percentage point paid in bond yields represents over 1.6 percent of the total economy.

Obviously Greece would never accept such high interest rates for funding. This likewise implies that its government will depend on indefinite aid from Europe and the IMF. The previous wave of fresh fiscal aid was contingent on the fact that private creditors would forgive 21 percent of the Net Present Value of Greek debt. At the time this seemed enough to quell market fears of complete insolvency, but in real terms it would barely make a dent in Greece’s extremely high sovereign debt ratio.



EURO Chart

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COMMODITIES

Gold finished more than $23 higher Friday to end a four session losing streak. This comes as lower prices and a weaker dollar helped entice investors back to the yellow metal. Howeve the metal still tallied a 2.8% loss for the week.

Gold for December delivery added $23.20, or 1.4%, to settle at $1,636.10. It has traded as high as $1,649.60 and as low as $1,612.80.

Crude for December delivery, the new front month contract, added $1.33, or 1.6%, to settle at $87.40. Prices ended the week with a 0.7% gain.

Gold Chart

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EQUTIES

Ford rallied after Standard & Poor’s raised its rating on the automaker by two notches.

Seagate Technology jumped more than 20 percent after Needham & Co. said the firm is better positioned to emerge from widespread flooding in Thailand than its rival Western Digital. The brokerage also reiterated its “strong buy” rating on Seagate.

And Eastman Kodak rose after a report that said the camera company is in talks with Cerberus & Silverpoint for up to $900 million in rescue financing.