During the session on Monday, we anticipate that the German Business Climate numbers could very well be by far the most interesting announcement of the day. We do have Pending Home Sales numbers coming out of America as well, but at the end of the day we do not think that the market will respond too much to those US numbers. The US stock markets look very bullish anyway, so we do not believe that the market will react too negatively to any numbers come out that this point.
The EUR/USD pair tried to rally during the course of the session on Friday, but it appears that the shooting star tells us that the markets ready to go lower. That being the case, we feel that the markets will continue to offer put buying opportunities, especially on rallies. That being the case, we are much more interested in fading rallies and with that we are very bearish.
The S&P 500 continues to look very bullish, and as a result we buy calls on pullbacks as the market looks set to head to the 2000 level. The fact that we broke above the 1960 level tells us that the buyers are most certainly on top of the situation and we will buy calls only. We have no interest whatsoever in buying puts.
Gold markets look a little bit soft at this point in time as well, as it has been a market that has been selling off from the $1250 level. If we break down below the $1220 level, we feel that the market continues to go much lower, possibly breaking down as low as $1000 given enough time. On the other hand, if we find a supportive candle near the 1220 level, we feel at that time the market could bounce. Nonetheless, at this moment time we do favor buying puts on short-term rallies that show signs of resistance.