1 – The GBP/USD pair initially fell during the course of the day on Tuesday, but found enough buying pressure near the 1.5150 level to turn things back around and continue to go higher. It now appears that the pair is heading to the 1.55 level, but there is a significant amount of noise just above the 1.5350 region. Expect deceleration in the rate of progress buying the British pound. Quite frankly, this rally is very overextended, and unless you are already long via calls, you are probably going to be better served to simply wait for resistive candles closer to the 1.55 level, expecting some type of pullback.
2 – The S&P 500 (SPY) initially fell during the day on Tuesday, but the 2100 level continues to attract buyers. The shape of the candle suggests that we are going to continue going higher and we are call buyers. We also believe that the GDP numbers coming out of the United States could surprise to the upside, and that of course should send the market going higher. On top of that, if the numbers are lower than anticipated, perhaps market participants will anticipate that the Federal Reserve will remain ultra-easy for longer than anticipated. That of course is bullish for stocks also. Either way, we think that pullbacks will be call buying opportunities.
3 – The DAX fell during the day on Tuesday, as the €12,000 level continues to be resistive. However, we see quite a bit of support at the €11,600 level, and also recognize that we are in a general uptrend anyway. Because of this, we are looking for supportive candles on short-term charts in order to continue buying calls. Eventually we expect this market to break out to the €12,400 level and remain bullish.
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