We anticipate a fairly quiet session on Thursday, as there are only two announcements that we are paying particular attention to. The German CPI numbers month over month could push the value of the EUR/USD market around, or perhaps even the DAX. The DAX should rise based upon this numbers, and there could be a bit of a “knock on effect” in the Forex markets as the Euro would be finally receiving some type of positive news.
The other announcement that we are paying attention to is the Initial Jobless Claims coming out of the United States. We believe this market will have an effect on the stock markets in general, and as a result we will be watching US indices. Of particular note is the Dow Jones Industrial Average, as it found enough support at the 17,000 level to turn things back around and form a nice-looking hammer on the daily chart. With that, it’s more than likely that we are going to bounce and aim for the 17,150 level, which of course is the top of the recent consolidation. With that being the case, we are buyers of calls above the 17,050 level, as it would break the top of the hammer at that point. We believe that this is a short-term opportunity, and we do not plan on being married to the position.
Light sweet crude markets continue to fall apart, as petroleum now trades at an even lower level. We think at this point in time, any type a short-term rally is an event that you can buy puts at, and other words short. We do not think that the oil markets are going to be able to pick up enough steam to rally with any significance without first testing the $90.00 level, an area of rather significant support and important on the longer-term charts.