During the session on Monday, we do not expect much in the way of economic announcements to move the marketplace. With that being the case we feel that the market will more than likely pay attention to perhaps the US Industrial Production numbers month over month, but beyond that really nothing else.
Looking at the EUR/USD pair, you can see that the market did in fact fall during the course of the day on Friday, but bounced enough to form a hammer. The hammer sits just that the 1.25 level so it is likely that we will see short-term bullishness. However, we are not fooled by that and we are looking for a resistant candle above in order to start buying puts again. The market has essentially found a little bit of a base in this general vicinity, but at the end of the day it is a bearish market for reason.
The S&P 500 had a fairly slow session on Friday, but we think it is simply the market taking a breather after a massive bullish move higher. We believe that the S&P 500 can only be bought, so we will buy calls on pullbacks to show signs of support. We believe that the 2000 level should be massively supportive, and we are willing to buy them via calls over and over again.
Gold and silver markets both had a very positive session on Friday, but quite frankly we feel that it’s only a matter of time before the sellers come back into the marketplace. With that, we would be looking to buy puts on resistive candles just above, with the gold markets focusing on the resistance at $1200, while the silver markets will focus on the resistance near the $18 level. With the US dollar having been so strong, it’s very difficult for us to believe that the precious metals markets are about to take off to the upside.
