During the session on Thursday, one of the biggest announcements will be German Unemployment Numbers. Also, there will be CPI numbers coming out of the United States, while GDP numbers come out of the United Kingdom. With this, it makes sense that the market will more than likely be very volatile, and therefore should offer plenty of trading opportunities during the day.
Looking at the EUR/USD pair, we ended up doing nothing during the session as we continue to be very flat overall. With this, we feel that the market should continue to be one that is best played by buying puts on short-term rallies, as it plays the range along with the longer-term downward bias. The area that we are currently stuck in looks a lot like the market taking a bit of a breather, after a significant fall.
Gold markets broke out to the upside during the session on Wednesday, but as you can see gave back quite a bit of the gains. Because of this, we are not overly enthused by gold markets at this point but recognize that it’s only a matter of time before this market goes higher. We buy calls on short-term pullbacks recognizing them as potential buying opportunities as is market should then head to the 1220 handle.
The S&P 500 fell initially during the session on Wednesday, but found enough support below to turn things back around and form a hammer. Because of this we believe that the market continues to go higher, and that buying calls will be the only way to play this overly bullish stock market. With that, we are very bullish of the S&P 500 and feel that the 2200 level is about to be targeted. Any pullback this point is a call buying opportunities far as we can see and should represent value.