The US unemployment rate quietly moved up in January 2017 while everyone was focused on the strong NFP jobs data for January. The Bureau of Labor Statistics reported an increase of 227,000 new nonfarm payroll jobs for January, significantly higher than forecasts of 180,000 new jobs. Despite the strongest growth in jobs since September 2016, they are some concerns about wage growth, labor force participation, and rising unemployment levels. It is certainly not a clear-cut picture of the US economy with a new president at the helm. The Bureau of Labor Statistics indicates a concerning trend – an upward spike in the number of persons not presently in the labor force who are seeking employment. This number has been increasing ever since October 2007 when it was at a low of 4.3 million people. The current figure is 5.7 million people. Another important metric is the employment to population ratio.

Back in 1997, approximately 64% of all people were employed in the economy. By January 2017 that figure has dropped to 59.9%. While it is on the rise, there is no doubt that the recession in 2008 caused a sharp decline in the number of people working in the US. The slow recovery is indeed a cause for concern. Of equal concern is average hourly earnings. Wall Street analysts were anticipating an increase of 2.7% for January, year on year, but the actual earnings increased by just 2.5%. This is an important determinant of the health of the economy, especially when the Fed is trying to raise interest rates to increase inflation. Low real wage growth is holding the economy back, and it will likely require Fed intervention. It is against this backdrop that we examine the top 4 financial trading assets in the US that binary options traders should be watching.

Trading Opportunity #1 – Oil on the Rise

On Friday, 3 February 2017, oil prices in the US rose to $53.83 per barrel. Oil is up a remarkable 19% since OPEC countries agreed to cut their output by 1.2 million barrels per day on 30 November 2016. Over the past 1-year, oil prices have approximately doubled. Investors in the US oil fund ETF (USO) have seen an uptick in performance of 14% since the lows in 2016. However, it’s a tough call with the oil market on a global scale. When Brent crude oil producers cut back on production, WTI crude oil producers are increasing production. The net effect of this on the oil price is sluggish growth. However, the general opinion of commodity traders is that oil is on the rise. This was bolstered by President Trump’s sanctions against Iran for violating the terms of the nuclear deal reach between the West and the rogue Middle Eastern nation in 2015. As it stands, we can expect oil prices to move in the region of $60 – $70 per barrel for both WTI and Brent crude before the year is out.

Trading Opportunity #2 – USD/JPY Pair Trending Bearish

The USD/JPY currency pair is heading inexorably lower towards the 112.00 level. The greenback has weakened across the board, despite Wall Street gains. The daily low of the USD/JPY pair hit 112.30 on Friday, 3 February 2017, and the consensus among analysts is that bearish activity will continue. The above chart indicates the technical levels of the pair where it is clear that the 50-day moving average is well above the prevailing exchange rate, at 115.19. The 200-day moving average of the USD/JPY is 107.32. The USD/JPY pair has been moving lower since January 2017, as dollar weakness dominates.

If the USD/JPY pair moves towards the 112.00 level, and breaches it, we can expect fresh new lows to be hit. If this is the case, the November 22 high of 111.70 could be breached, or the November 28 low of 111.35 could become the new support level. As a binary option trader, it’s important to understand that the USD is trading lower across the board. The USD/CAD pair is targeting 1.2820, while the EUR/USD pair rose above the critical 1.0800 resistance level, consolidating after a week of modest gains. Currently, the broadest measure of the USD – the US dollar index – is down 0.14%, or 0.14 at 99.69. It measures the greenback against 6 major currencies, of which the JPY forms a part. The 52-week high is 103.81 and the 52-week low is 91.88. Currently the 1-year change in the US dollar index is down 2.72%.

Trading Opportunity #3 – Walt Disney Company Stock Down

The Walt Disney Company (NYSE: DIS) is currently trading at $110.30 per share, down 0.28% or $0.31. The company has a market capitalization of $174.7 billion and a respectable price/earnings ratio of 19.25. The company’s current earnings-per-share is $5.73 and its next earnings date is Tuesday, 7 February 2017. This is generating tremendous hype among traders, and clearly the seesaw nature of its earnings reports is course for concern. Consider that in Q4 2015, DIS posted a positive earnings surprise, followed by a negative earnings surprise in Q1 2016, a positive earnings surprise in Q2 2016 and a negative earnings surprise in Q3 2016. For the current quarter, analysts are estimating earnings of $1.50 per share.

The 1-year target estimate price of the stock is still bullish at $114.39 per share, although the 52-week range indicates that we are already pushing the limits. The 52-week high is $111.99 per share. In terms of consensus forecasts among analysts, Disney has been graded with a 2.4 on a rating scale where 1.0 is a strong buy a 5.0 is a sell. On a positive note, there have been two recent ratings upgrades for DIS stock. The first came from Goldman Sachs on 17 January 2017 from a neutral to a buy rating. The second upgrade was more recent on 30 January 2017 when Morgan Stanley upgraded DIS from an equal weight rating to an overweight rating. This could impact trader sentiment ahead of the earnings announcement this week.

Trading Opportunity #4 – the S&P 500 Index Is Modestly Bullish

The S&P 500 Index (SPY) reacted positively to the news that the US economy added 227,000 new jobs in January 2017. That Wall Street expected just 180,000 new jobs was enough of a cushion for a buoyant SPX. Much the same is true of the Dow Jones Industrial Average and the Nasdaq. Analysts were expecting NFP data to come in between 160K and 230K. That actual results came in at 227K is notable. The S&P 500 Index rallied accordingly. Analysts measure the performance of this index by the number of contracts that are traded. By 6:45 AM central time, some 100,000 contracts had been traded. After the January jobs report, the S&P 500 Index rose 0.7%, just a point shy of its all-time high. As a binary options trader, we can expect to get a little more traction out of the January jobs figures on Monday, as traders continue placing call options, before profit-taking kicks in.