The session on Friday will be very quiet as far as economic announcements are concerned, as the Canadian CPI is really the only thing of significance coming out. With that being the case, we feel that it is going to be an extraordinarily technical day, and as a result we will look at the charts to guide the way going forward.
The EUR/USD pair continues to fall, and the in fact even managed to test the support below. The 1.2250 level of course will continue to be a bit of trouble for the sellers, but ultimately we feel that the market will go below there. Because of that we are buying puts on rallies, and most certainly on a move below that level.
EUR/USD
With that being said, we also think that the gold markets will continue to fall mainly because of the US dollar strength that we see in the Forex markets. There’s no way that we are willing to buy calls in this market, and as a result if we can get below the 1180 level, we feel that buying puts down to the 1140 level is be applicable trade.
Looking at the S&P 500, you can see that we broke out during the session on Thursday, as the 2020 level is now a thing of the past. Because of this, we feel that the market can offer call buying opportunities every time it pulls back and we see some type of support. Ultimately, we feel that’s exactly what’s going to happen, and as a result we anticipate seen the S&P 500 reach the 28 handle.
Keep in mind that the markets will be fairly illiquid, as the Christmas holiday is upon us. With that being the case, keep your trades small and short-term as far as duration is concerned.