Several important economic releases were announced last week and they have important implications for traders. For starters, there was a major announcement from the Bank of Japan, and the US economy reported growth figures that were lackluster in Q4, 2015. With negative interest rates in Japan, there are fears that reciprocal measures will be adopted by other countries to remain competitive. Now there are cracks beginning to form in the US economy and the US has also ended a 40-year ban on the export of crude oil. China continues to feel the pressure from plunging growth figures and emerging market economies are facing steep revenue declines as commodity demand plunges. In the US, the greenback is proving to be resilient and placing tremendous pressure on commodity prices for foreign buyers.

1 – Currencies Trading: Consider placing Put Options on the JPY

The recent move by the Bank of Japan (BoJ) to reduce interest rates into negative territory has had a profound effect on the JPY. The problem in Japan and many other developed economies is deflationary pressures. We are seeing lacklustre economic growth as prices are being dragged down by slack demand and plunging commodity prices. The Bank of Japan surprised everyone recently with a decision to reduce interest rates on bank deposits to negative territory – effectively making it cost depositors money to keep their money in the bank. The reason why the BoJ has adopted this measure is to encourage a sharp increase in overall economic activity.

By ‘forcing’ people to spend money and to borrow money, the hope is that inflation will increase. But it is seen as a negative move for the JPY. But now we are seeing other concerns taking root in other parts of the world as European leaders are concerned that the EUR will be losing ground to a more competitive JPY. This means that currency wars may ensue and the EUR may also depreciate further if the ECB acts in a similar way. Therefore consider placing PUT options on the JPY, with an eye on the ECB and its policy actions this week.

2 – Commodity Trading: Consider placing Put Options on Crude Oil

The above chart paints a grim picture for shale oil producers in the US. The price of WTI crude oil continues to head south, after plunging to 12-year lows recently. The price is currently at $33.73 per barrel but recent data suggests that US oil and gasoline inventories are high, owing to maintenance work at US production facilities. This will result in prices moving lower. Volatility will remain with OPEC and Non-OPEC countries failing to come to consensus about cutting production.

The 2-day performance of WTI Crude Oil on the NYMEX has been positive compared to Brent Crude which snapped up two days of losses. The 52-week range for WTI crude oil is $27.56 on the low end and $65.69 on the high end. We are presently scraping the bottom, but the mini-rally in crude oil prices will likely return as February orders kick in. The cold snap in the US saw additional crude oil consumption taking place but the feeling is still bearish for binary options traders. For that reason, my forecast is PUT options on WTI crude oil.

3 – Stocks Trading:Consider CALL OPTIONS on Walt Disney Co

There is plenty of value in Walt Disney Co (DIS) stock. The 52-week trading range on the stock is $90 on the low end and $122.08 on the high end. The stock ended 2.45% higher in the previous trading session at $95.82 on the NYSE. It has a market capitalization of $153.54B and a dividend of $0.71. The dividend yield is 1.50%, the price/earnings ratio is 19.09 and the earnings per share is 4.95. Based on several factors that I’m about to list, Walt Disney Co warrants call options by binary option traders.

The stock’s revenue growth is strong, EPS is strong, and net income increases are strong. The stock has a decent valuation and the ROE is fairly good too. On the downside, the company features low profit margins. For the year-to-date, DIS has a -8.81% return, -16.71% for 3 months, 2.79% for 1 year and 77.48% for 3 years. Currently, the vast majority of analysts rate Disney as a Strong Buy, Moderate Buy or a Hold. Sell and Strong Sell ratings are minimal. Therefore I’m going with say consider CALL OPTION on DIS.

4 – Indices Trading: Call Options on the Dow Jones Industrial Average

The Dow Jones Industrial Average (DIA) was trading at 16,466.30 (+2.47%) for the day on Friday 29th January. The Dow Jones has a 52-week trading range of 15,370.30 on the low end and 18,351.40 on the high end. Wall Street ended January on a high note. The performance leading into the final week was rather lacklustre and the fact that the Bank of Japan (BoJ) dropped interest rates into negative territory for deposits fired up Wall Street. This marks the second successive week of gains for Wall Street, yet despite the gains the month was still the worst on record since the global financial crisis in 2009. For the week, consider going long on the Dow Jones Industrial Average with Call Options.