Good morning traders! Yesterday was an extremely quiet day on the markets with very thin liquidity and low volume trading for the duration of the day because of the market holiday in the States. The EUR/USD was stuck in a range all day and it looks to be the same story again unless we get a major catalyst. The market seems to be in wait and see mode ahead of Thursdays PMI's from the eurozone and the upcoming Italian political elections. The only bit of news this morning is the German ZEW economic sentiment from Germany, which we feel may be good as the DAX is already up 40 points this morning! This number is out at 10 and will give the EURO a boost aswell.
Looking at the American indices, the S&P 500 looks like it is going to open fairly unchanged from Fridays 1519 close. The market still looks very over extended but can keep going higher until some significant news causes it to correct. This still remains a buy-the-dips strategy. The 1515 level which was previous resistance and new support since the breakout two weeks ago looks a solid buy, any dip to here has been snapped up.
Another thing that we have become interested in given their recent decline our gold and silver. Gold is iddling around the 1600 mark and looks a solid buy with a stop loss somewhere near 1565, looking for an exit position of 1790+, This could be a nearly 200 point trade. The decline has resulted from a number of hedgefunds unwinding long positions and from some soft technicals. January and February are also notoriously bad seasons for Gold. Silver does not seem to want to go below 30 dollars and a target point of 35 dollars would be a good target. In this QE-Infinity world you have to believe that the fundamentals back up these metals making new highs as liquidity is being pumped into the global economic system so hard that they are the best hedge against inflation around.
Good luck in the markets!! Lowkey
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