Friday should be a fairly quiet session, but we are paying attention to the GDP numbers coming out of the United Kingdom. Because of this, we could see a bit of volatility in both the FTSE and the GBP/USD pair, but we believe that the strongest signal that we are seen at the moment is the FTSE testing the 6400 level. If we get above there, we believe that the market goes quite a bit higher and we would be buyers of calls.
The New Home Sales numbers come out United States, but quite frankly home construction has certainly taken a backseat too many of the other economic indicators in America over the last several years. The reality is that the housing market simply isn’t going to be what it once was, so we feel that this market will more than likely be fairly quiet once it’s just the Americans on board.
We believe that the EUR/USD pair can continue to be sold off, so we are buyers of puts on short-term rallies, and believe that if we can break down below the 1.26 level we should continue to see the market drop heading towards the 1.25 level.
The silver markets were somewhat negative, but continue to show a little bit of support near the $17 level. Because of this, we want to buy puts after a short-term rally, perhaps to the $17.50 level, as it has proven to be fairly resistive recently. With that being said, we are bearish but we recognize that the market may have to grind a little bit in the meantime.
The S&P 500 continues to impress, and we believe the dips can continue to offer call buying opportunities as is market should continue to go much higher, heading towards the 2000 level given enough time. The recent move has been fairly strong though, so do not be surprised if Friday offers a little bit of a pullback as the momentum cannot be continued at this rate for a very long time.