On Monday, we feel that there is very little to move the markets as far as announcements are concerned, at least not until we get to the Chinese late in the session. With that, it’s very likely that the Chinese GDP numbers will influence what the markets are going to do on Tuesday, but in the meantime it looks as if we will have a very technical session.
The EUR/USD pair still looks very soft, and as a result we like buying puts in this marketplace as it should head to the 1.25 level given enough time. We have no interest in buying calls, and as a result I we feel that this is a negative market that’s only going to get more and more negative.
The S&P 500 formed a hammer for the weekly candle, so therefore it feels as if the market is starting to find a bit of a footing in this general vicinity. The 1900 level above been broken to the upside would be the reason we would start buying calls as it would show significant strength. We have no interest in buying puts, because we believe that the bounce from the 1820 level was significant enough to show that the buyers are still out there.
Gold markets look very confused and lost at the moment, and in our opinion probably should be avoided until we can get above the $1250 level, which at that point in time we would be buyers of calls. Bit no interest in buying puts, as the market although bearish, certainly has a lot of noise below that could slow down the sellers.
The GBP/USD pair has bounced off of the 50% Fibonacci retracement level near 1.60, forming a massive hammer for the week. With that, if we can break above the top of the hammer which is essentially the 1.61 level, we feel that this market could be very bullish for the longer term, going back to the 1.72 level given enough time. Obviously, we would be buyers of calls on a break above the 1.61 handle, and we have no interest in buying puts at this point.