Looking at the session on Wednesday, the first thing that we have to pay attention to is the fact that it is Christmas Eve. Obviously, the liquidity is going to be an issue but we do have one announcement that could move the market. That particular announcement is the Initial Jobless Claims coming out of the United States, and as a result we believe that the US stock markets may have a little bit of volatility.
Ultimately, we have to look at the S&P 500 as it broke above the 2080 level, an area that was significant resistance. We think that short-term pullbacks will be call buying opportunities as the market should continue to go higher over the longer term. However, we would only focus on short-term options at best, simply because we don’t trust holding positions over the Christmas holiday.
S&P 500
As far as the gold markets are concerned, is a put buying opportunity every time it rallies. We can clearly see that the 1180 level has offered enough resistance to turn the market back around, and therefore we feel the cold is eventually heading to the 1140 handle.
The EUR/USD pair should continue to offer put buying opportunities every time it rallies, and therefore we are buying puts on short-term charts that show signs of resistance after small rallies. Ultimately, we feel that the market goes down to the 1.2050 level given enough time.