The two fastest growing sectors last week in the U.S. stock markets were non-cyclical consumer goods and utilities. These grew by 0.89 percent and 0.51 percent, respectively. Part of this is surely due to the fact that the price of crude oil appears to be on the rise. The other part is mainly due to the rising stock prices that we have seen lately. As the economy is now rising, consumers are more comfortable spending their money. The joblessness rate is low, wages are rising, and people are now feeling more confident with their money. However, this needs to be looked at with a longer term point of view, and this means that the stocks that have been on the rise at the fastest pace are still in danger of falling prices. As you look at the next few weeks of trades ahead of you, keep in mind that the economy is currently doing well, but that this could change. It adds an element of unpredictability to the markets, and thus the trades you make will likely not have the same certainty rates that they typically do, unless you act with a degree of caution.
In order to accomplish this, it’s important to look at the fundamental information that is driving the prices in each of these major sectors, assuming you want to execute trades within them. We can see that utilities were one of the biggest movers upward, but if you look at the fast moving stocks in the downward direction, energy and technology were hit hard. Companies like Apple had rough weeks thanks to the fact that consumer demand for iPhones has reportedly dropped again. Also, Alphabet and IBM, two of the biggest tech companies out there, have earnings releases coming up, and this always is preceded by trader scrutiny. Even though the economy is doing well, these companies are in the spotlight, and it has caused some otherwise strong companies to see some undue volatility.
Binary options traders should be paying close attention to which companies are dropping in price without a fundamental cause behind it. For example, if IBM has better than expected earnings, the trend for that company should move upward instead, and prices will begin to rise. If trades are timed correctly, then this leads a huge window of opportunity for traders to ride the trend for even days at a time, and this can lead to huge profits—even more so than if you had been trading the stock in the traditional sense—when done right. Yes, you will have incorrect trades here and there, but as long as you are using firm technical indicators for the individual timing of each trade, then your success rate should be high enough that you will make large amounts of money. It depends on the timeframes that you use, too, so be sure not to put yourself at a disadvantage by trading too close to the time of execution, or pushing trade expiries too far out into the future. If you are planning on waiting to see if these drops were unwarranted, then look at the fundamentals, see how strong the companies truly are, and then wait for a sign of recovery before you start taking out call options on them.
Other sectors, like healthcare, industrials, and telecommunications, showed very little signs of movement. Their movement was almost imperceptible, compared to the rest of the marketplace. As a general rule, even if there is opportunity in these sectors, they should be avoided. When a group of assets is moving sideways, the trend disappears, and making profitable binary trades on them becomes much more difficult to do.