During the session on Wednesday, the only economic announcement that we are paying attention to is the Bank of England Minutes, which also coincides with the voting record of the MPC. With that being the case, it is likely that the British pound could move, and although we saw a bit of weakness during the session on Tuesday, the reality is that the 1.52 level is in fact very supportive. We would be buyers of calls on signs of support in that region, and believe that the market can’t be sold in that area simply because it is far too much in the way of noise below. However, having said that 1.55 level above is extraordinarily resistive.
GBP/USD
Silver markets got absolutely walloped during the session on Tuesday, slicing through the $16.50 handle. That of course is a very negative sign but there is a lot of noise only down to $15.50 in this market, meaning that could come into play anytime between here and there. We would be buyers of calls once we see that support, but are not willing to buy puts because all of that potential volatility.
The S&P 500 fell initially during the session on Tuesday, but found enough support to turn things back around and form a hammer. With fact, it appears the market is trying to break out and above the 2100 level. We believe that a move above 2100 that is sustain for any real length of time is a nice call buying opportunity for the long-term as the S&P 500 should rise rapidly from there.