Daily Market Analysis – December 23, 2015

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During the course of the session on Wednesday, we have several announcements such as GDP coming out of both the United Kingdom and Canada, as well as Crude Oil Inventories, Core Durable Goods coming out US, and the Japanese Monetary Policy Meeting Minutes. Because of this, should be plenty of volatility during the day, plus you have to keep in mind that we are getting towards the Christmas holiday, so having said that we believe volatility will drop off drastically late in the Wednesday session.

1 – Nonetheless, we still prefer shorting commodities via puts, as the energy and precious metals sectors still are very bearish in general. Both precious metals that we follow are starting to get close to the top of the consolidation area, so we are looking for opportunities to take advantage of what should be a continuation of the longer-term move. On the other hand, energy markets are an absolute mess, and simply cannot be bought via calls, and quite frankly we start buying puts every time they rally.

2 – Looking at the US dollar in general, it appears that the US dollar will struggle a bit during the session, but no massive meltdown is anticipated. Quite frankly, it should just simply be a continuation of the overall consolidation that we’ve seen in the Forex markets for the last several sessions.