Monday has almost nothing in the way of economic announcements, with only the Existing Home Sales coming out of the United States, and the HSBC Manufacturing PMI numbers coming out of China. The existing home sales announcement could in fact stock markets in the United States, as we continue to see a “buy on the dips” type of mentality.
However, looking at the charts we see that the GBP/USD pair has fallen drastically after the Scottish voted “no.” Because of that, we feel that the GBP/USD pair will continue to drop, but we are not comfortable buying puts into we get below the 1.6250 level, something that can happen fairly quickly at this rate. Also of note is the fact that the EUR/USD pair has been falling during the session on Friday, and it appears that we are heading towards the 1.28 handle. If we can get below there, this market could really come undone.
The silver market has broken below the $18 level, and more importantly triggered the bottom of a descending triangle. The descending triangle measures for a move down to the $12 handle, a placed actually has significant support on the monthly chart. Because of this, if we break down below the lows from the session on Friday, anticipate opportunities to buy puts to push this market even lower. Several looks absolutely anemic at this point in time, we believe that selling silver is probably going to be one of the better trades out there.
Ultimately, we believe that the same scenarios should play out: stronger US equities, stronger US dollar, and weaker commodities, especially precious metals.
