On a day that has very little in the way of important economic announcements, we believe that a lot of the moves will be technically driven. However, Tuesday could provide a view headlines, and the first announcement that we are paying attention to is the German Consumer Climate number, expected to come out at 9.0 for last month. With that, we could see a reaction in the EUR/USD Forex pair, as it has been selling off so drastically. At this point in time, if the number comes out better than anticipated, it is possible that we could get a little bit of a bounce in the EUR/USD pair, but quite frankly that should simply end up being a nice selling opportunity. It is not until we break above the 1.33 handle that we would consider buying this market.
Later in the day, we have the Crude Oil Inventories number coming out United States. That will be localized as far as its effect, probably being seen only in the WTI Crude Oil markets. Any bounce that doesn’t get above the $94.50 level however, should simply be a nice selling opportunity. If we managed to break down below the $92.50 level, we feel that this market will continue to fall down to the $90.00 handle. In the meantime, we anticipate a lot of volatility in the oil markets, with very little in the way of range.
The S&P 500 tried to break out to the upside during the session on Tuesday, and didn’t manage to for some time. In fact, we went as high as the 2005 level, and found that area a bit too rich, and pulled back to form a shooting star. If we can break the top of the shooting star for the Tuesday session, we believe that the market goes much higher. We do believe that happens eventually, but the fact that we formed a shooting star suggests that perhaps we need to have a little bit of a pullback in the meantime. We will look for supportive candles below in order to go long.
