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On a day that only features GDP (Preliminary) out of the United Kingdom and Core Retail Sales out of the United States, we feel that this may be a fairly quiet day. On top of that, several of the stock indices that we follow are approaching significant resistance but also look very healthy at the same time. With that in mind, we feel that this market will eventually break out to the upside but it may take some time to do so. With that you’re going to have to be very patient, and probably play short-term trades in the meantime.
1 – We believe ultimately that there is a significant amount of bullish pressure underneath most stock indices around the world right now, so having said that we are call buyers in general. We don’t have any interest in buying puts overall, as it appears that the “risk appetite” of traders globally is picking out.
2 – Currency should continue to favor of the same type of attitude, but keep in mind that you will also have to focus on short-term trades in this market as well. With this, we believe that the British pound may be one of the better ways ago, especially if the GDP numbers come out fairly strong. In that case, we believe that buying calls in the British pound against the US dollar will work, but we will be even more rewarded against other currencies in favor of the British pound.
3 – Precious metals should continue to be very volatile, but ultimately we still feel there is a significant amount of support just below as even though the US dollar saw a resurgence last week, precious metals essentially held their ground. With fact, we believe that there is more of an upward bias than anything else.
