Best Month in a Year
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One great way to make binary options work to your advantage is to trade based on monthly and quarterly earnings reports. Options can be predicted to rise or fall shortly before these news releases. If you do the research you can capitalize on these movements in the market. But more on this strategy at a later posting. Now let’s concentrate on our monthly report.
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Stocks did better this month than they have in an entire year. Sixteen of the thirty DOW stocks ended higher at the end of July, including Home Depot (up 1.6% at $28.51) and Boeing (up 1.4% at $68.14). Intel (down 1.7% to $34.46) and Merck (down 1.7% to $34.46) ended lower than expected.
Stock Market Summary
DOW- ended at 10,466 points, rising 7.1% for the month. Earlier in the day the DOW fell almost 120 points, but it ended a point below the day’s opening. It ended with a fall of .01% for the day.
Nasdaq Composite Index– ended three points higher, at 2,255.
DAX- Germany’s DAX index rose .2%.
IBEX- Spain’s IBEX fell 1.2%.
Nikkei- Japan’s Nikkei stock average fell 1.6%.
S&P 500- ended at the same rate at 1,102, rising 6.9% for the month and .01% for the day.
News Events of the Month-
Technology News-
Research in Motion (RIMM) shares jumped 3.3% to $57.53 after announcing its plans to release a tablet competing with Apple’s iPad in November, the “Blackpad.” In addition, it will announce a rival to the iPhone next week.
Economic News-
The US government reported slow growth in the period of April to June, with a GDP of an annual rate of 2.4% in the 2nd quarter compared with the 2.5% predicted by economists.
Spain’s credit rating is likely to be cut, as it faces mounting unemployment at 20% and rising debt.
Congress voted on a $2 billion cash for clunkers program, a new program offering Americans a cash incentive for trading in gas guzzling automobile for fuel efficient alternatives. This program should help stimulate the automobile industry.
Currencies-
The dollar rose against the British pound and Euro but fell against the yen.
Savings and Consumer Spending-
Consumer sentiment for July rose to 67.8 and not the expected 66.5.
Commodity Market
Oil, gold, and copper all rose in price.
Gold- $13.30 to $1,181.70 per ounce.
Copper- up 2.15 cents to $3.3115 a pound, up 12% for July.
Oil- closed at $78.95, up 4.39% from last month.
Employment
Increased to 9.6% from 9.5% for last month for the US market.
Private employers added 90,000 jobs to the payroll, an improvement since June.
Sales and Manufacturing
Manufacturing activity slowed to its lowest level since December. Reports of Midwest manufacturing rose to 62.3 this month from 59.1 for last month.
Source: Gold Alert
Market analysts speculate that gold could be the next bubble, as large investors continue to buy gold along with other commodities as a safe investment against the rising economic instability in Europe and now Asia.
Developing countries have simultaneously been buying gold as a safe and secure place to store monetary assets.
Both reactions have caused a rise in the price of gold over in the last week of May even though demand has fallen in the first quarter of 2010. But what is more interesting is that gold prices are extremely sensitive to sentiment, or people’s perception of the value of the commodity.
Financial investors are largely responsible for the market price of gold, who decide whether they believe the price of gold will rise, and then invest in gold. This causes the price of gold to rise even further, as investor sentiment rises.
The price of gold has been known to fall in times of wealth and economic prosperity, however. In times of severe economic hardship, as in ware or economic collapse, it has been known to be a fairly liquid investment which can be easily traded for money.
Gold Prices for Last 10 Years (Google Chart)
In the last 10 years, gold has risen steadily (see chart on side), breaking an all-time previous high of $1,241 an ounce on May 12. Due to the Greek crisis, foreign investors are cautious about investing in the Euro and prefer to invest in the seemingly more stable commodity of gold.
The price of gold, like other commodities is affected by demand and supply. However, since the total amount of gold in the world is already mined and currently in existence, the price of gold is affected more by demand than other commodities. For the right price, market suppliers can sell gold in the marketplace.
But the sudden growth in demand for gold could also contribute to global inflation, especially in light of the current global crisis and the European Central’s bank’s surprising decision to buy bonds of weak government economies. Investors are currently speculating as to whether gold will continue to rise, or if it truly did hit the breaking point on Wednesday.
Gold and other commodities are offered as investment options on our binary options platform.
Posted by Tamar | Posted in commodities, corn, gold, oil | Posted on 11-05-2010
We will soon start posting our own take of the commodities market.
But first, here is a nice report for today from FuturesMag.com. Use this to trade commodities on our site at Bull Options.
