During the session on Friday, we should continue to show a lot of volatility when it comes to Europe. However, with the ECB working against the value of the Euro, the markets moved a bit too far during the day. We believe that the EUR/USD pair could very well recover some during the day today, as we approach a significant support barrier at the 1.11 handle. With this, it is only a matter of time before the markets reenter consolidation as far as we can see. We don’t have any interest in trying to work against that previous consolidation unless of course we completely break down.

1 – European stock should do well though, as the European Central Bank looks ready to continue with the quantitative easing. With this, it is probably only a matter time before the DAX, CAC, Ibex, and many others go much higher. We are buyers of calls in all of those indices.

2 – US indices should do fairly well also, but there could be a bit of a shock to the market initially as the US dollar strengthens. However, it is only a matter of time before the indices go to the upside again. With this, we are bullish of the US stock markets but recognize that a pullback should offer value for call buyers.