The day after the storm…

Without a doubt, Monday was brutal. Tuesday was much calmer and it seemed to be a day of healing and rebuilding. The massive sell-off that we have seen in the stock markets around the world of course suggests that we could either see continued weakness, or perhaps look at it as potential value around the world. We believe that the latter of the two situations will continue to be the case.

S&P 500 offering call buying opportunities above 1950

Looking at the S&P 500 (SPY), we feel that if we can break above the 1950 level, we would be call buyers. In the meantime, expect a lot of volatility. At this point in time, we are not comfortable buying puts, mainly because the market has sold off so strongly.

USD/CAD looks strong

The USD/CAD pair looks like it’s ready to continue going higher, mainly because of the softness that we see in the oil markets overall. We initially fell during the course of the day on Tuesday, but found enough support below the 1.32 level to turn things back around and form a massive hammer. On a break above the top of the range for the day on Tuesday, we believe they call buying is what we should do.

Silver looks very soft

Silver markets tried to rally, but found so much in the way of resistance at the $15 level to turn things back around and form a shooting star. We are sitting above significant support at the $14.50 level, and if we can get below there things would get rather ugly. We would see massive put buying opportunities underneath that level, but we also look at short-term rallies as put buying opportunities. We have no interest whatsoever in buying calls.

The pair AUD/USD is trading downwards testing the support level at 0.7100. We might be buyers of put options. Near-term support is at 0.7100, with a break below that on a daily closing basis exposing the support level at 0.7000. In case of a move above the 0.7257, we could be buyers of call options.

EUR/GBP – The Euro rebounds against the British Pound but is still trading below the 0.7400. We could be buyers of puts for the EUR/GBP. Near-term support is at 0.7270 with a break below that on a daily closing basis exposing the next level at 0.7205. In case of a move above the 0.7400, we could be buyers of call options.