Group of announcements for Friday
The PPI numbers in America and the University of Michigan Consumer Sentiment numbers will move the stock markets and the US dollar in general. We also have the Flash GDP numbers coming out of the European Union, which of course will move the Euro itself.
USD/CAD looks primed to continue bullish run
The USD/CAD pair bounced during the session on Thursday, offering more signs of continuation. We have seen a nice run higher, this coincides with the oil markets falling apart, and we feel that it is going to continue. Short-term pullback should be call buying opportunities as long as we can stay above the 1.29 handle. We recognize that it might be choppy, but having said that the markets will eventually break out to the upside.
Speaking of crude oil…
The WTI Crude Oil markets have touched the vital $42 level. It is because of this that we are not quite ready to start buying puts yet, at least until we get well below the $42 level. In the meantime, we are very susceptible to get a bounce, and sooner or later we could buy puts at higher levels. We have no interest in trying to pick the bottom at this moment, and as a result we have no interest in buying calls. We buy puts on short-term rallies, and we buy puts on daily closes below $42.
DAX has a volatile session
The DAX had a volatile session on Thursday, forming a bit of a shooting star sitting just above the €11,000 level. We believe that there is more than enough support below to keep this market somewhat afloat though, so we are buyers of calls on bounces from below, and of course a break above the top of the shooting star for the session on Thursday.
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