Monday will be a fairly quiet day as far as announcements are concerned coming out of Asia, but we do have one important number coming out of Europe: German CPI month over month numbers. The number is supposed to be -0.1%, and as a result it’s very likely that the DAX or the EUR/USD pair could be moving right out of the gates. Obviously, a better than anticipated number is good for both the DAX and the Euro, but it’s very likely that the number will probably come in line, thereby pushing the Euro lower, although the DAX looks like it could rise a bit, once it gets closer to the €9400 level.
The United States sees Pending Home Sales month over month coming out, and that of course can move the stock markets in the United States. We believe that a break above the top of the range from Friday and the S&P 500 since the market looking for the 2000 level fairly quickly. With that in mind, we are buying calls on a break above the top of the highs from Friday.
The EUR/USD pair will continue to offer put buying opportunities every time we rally, as the market is most certainly broken down. We have no interest in buying calls, and with that we feel that the market should head down towards the 1.25 handle given enough time.
We also like selling silver every time it rallies, as we believe it will eventually break down and head towards the $15 level. With that, the market should continue to be one that you can buy puts every time we get a little bit of a bounce, as silver continues to suffer the wrath of a strengthening US dollar overall. With that being the case, we think that buying puts in the silver market will be one of the more profitable trades for the rest of the year.
