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Markets in general on Monday should more than likely follow the patterns that we’ve seen for some time now. With that, we believe that we will simply continue to grind away in various ranges between now and the fall where liquidity returns. We only have a couple of weeks left in the holiday season, so fairly soon we should start to see stronger moves. However, in the meantime there are specific ranges that we are paying attention to.
1 – The most obvious one is the EUR/USD currency pair. We believe that the market continues to bang around between the 1.12 level and the 1.08 level. With this, we are getting a little bit overbought, and it looks like the Euro may lose a little bit of its luster. Nonetheless, we would expect short-term use, and are not looking for any type of major move over the next couple of sessions. It will take a certain amount of patience.
2 – Precious metals look as if they are ready to continue going higher, but we feel this is more or less going to be a short-term phenomenon. We think that the next couple of sessions could be fairly good to precious metals, but in the end we should start selling off again over the course of the next couple of weeks.
3 – Stocks in general we believe offer a bit of value, but we need to find some type of supportive candle in order to start buying, as the liquidity is an issue this time of year. However, large fund managers will start putting money back to work in the markets over the course of the next couple of weeks, so therefore we expect the rally fairly soon.