The Tuesday session has plenty of announcements coming out of the United Kingdom, which ironically will more than likely be glossed over during the session. While under normal circumstances, this could be a major day for the markets in both Britain and the British pound, the truth of the matter is that with the Scottish Independence Referendum vote will override everything else. However, there could be minor and short-term moves based upon a couple of these particular announcements.
We believe that the CPI number coming out year-over-year and anticipated to be 1.5% for the United Kingdom could move the FTSE. A better than anticipated number of course would be good for the stock market, so we would be buying calls, but only of the shorter-term variety. After all, it will only be a matter of time before concerned about Scotland come back into the marketplace. The same thing can be said about the GBP/USD pair, and we also believe that the PPI Input month over month numbers coming out of the same time and anticipated to be -.4% should also have the same effect.
Once the Americans come back into play, we could get a bit of a more straightforward reaction. The PPI numbers month over month are anticipated at been 0.1%, and that of course can have an effect on the S&P 500, the NASDAQ, and the Dow Jones Industrial Average. Our favorite trade out of all of those markets will be the S&P 500, as it is forming a hammer for the Monday session, and we have a clear area above 1990 as reason enough to start buying and aiming for 2010 via the calls that are available.
We also like shorting oil, or buying puts every time the market rallies and the fact that the API a Weekly Crude Stock numbers come out today, could give us an opportunity to fade any type of rally by getting bearish. Nonetheless, we think that the real action this week will be coming later.
