Looking at the session on Monday, we believe that the EUR/USD pair will continue to offer put buying opportunities as the market continued to show weakness on Friday. The nonfarm payroll numbers came out stronger than anticipated during the session on Friday, and that of course drove money into the US dollar.
On top of that, we have the German Industrial Production numbers month over month, and they could have an effect on the EUR/USD. Quite frankly, we are begging this market to go higher in order to buy puts based upon value in the US dollar. However, if we break down below the lows for the session on Friday, we would be buyers of puts there as well.
The gold markets also look like they are starting to roll over, and then makes sense considering that the US dollar is showing strength. That should have put buying opportunities left and right in this marketplace, as we believe the gold markets will now head towards the 1140 level given enough time. We look at any rally as a potential put buying opportunity.
The S&P 500 had a slight gain during the session on Friday, and we believe that it would continue to go higher given enough time. Short-term pullbacks will be call buying opportunities as far as we see, and with that we have no interest in buying puts in a market that is obviously strong. We believe that the S&P 500 is now going to head to the 2100 level, and then quite possibly higher than that.
We believe that the USD/JPY will continue to go much higher as well as we broke firmly above the 120 level. Pullbacks at this point time offer call buying opportunities as the US dollar should continue to strengthen in general, just as the Japanese yen should continue to weaken against most currencies around the world.