During the session on Tuesday, we anticipate that the EUR/USD pair may trying to continue going higher, this could be exacerbated by the German unemployment numbers coming out, and if they are better than anticipated we could see a nice put buying opportunity on a rally. On the other hand, the market getting above the 1.30 level would be a complete change of momentum and would have us thinking about changing directions. However, that seems very unlikely.
Looking at the FTSE, it appears that we are ready to bounce a bit from here, especially considering that we formed a hammer during the day on Monday. We are buyers of calls above the 6660 handle, as we believe the FTSE should continue to go much higher. It has been oversold for some time now, and as a result we believe that the rally could be rather significant.
The DAX found support at the €9400 level during the session on Monday, and with those German numbers we believe that the DAX could offer nice buying opportunity. The upside potential goes all the way to the €9800 level, so we will be buying calls on a break of the top of the range from the Monday session.
The S&P 500 looks like it’s ready to start rallying as well, and as a result we feel that the market could offer buying opportunities as far as calls are concerned, and as a result we believe that the S&P 500 will head to the 2000 level. On top of that, we believe that a move above the 2000 level could head to the 2020 level as well, as we are still very bullish of the S&P 500 overall. We have no interest in shorting any of the stock markets in America, so puts are not an option.
