Daily Market Analysis – January 27, 2016

During the day on Wednesday, we have several announcements coming out of the news cycle, as the FOMC releases its statement, the New Zealand central bank also releases an interest rate statement, and then of course we get the oil inventories number as well. Ultimately, we think that there will be quite a bit of volatility.

1 – We still believe in the US dollar overall, and as we’ve seen a bit of a pullback in the value the US dollar, we think that value hunters will continue to look to buy calls and puts in favor the US dollar, as it has given back a bit of its gains over the last 24 hours. Ultimately, we believe that the value the US dollar will continue to strengthen against commodity currencies in particular.

2 – Looking at the energy markets, we still believe in the downward pressure overall. However, we did get a little bit of a bounce in the oil markets particular, but this may be the place to serve buying puts during the day as the inventory numbers come out during the day. The longer-term downtrend should continue overall, and we believe that’s the case with all energy markets.

3 – Precious metals should continue to show signs of strength, but there is quite a bit of a fight just above current levels at this moment in time. However, be aware the fact that we could be seeing a bit of a trend change at this point in time, and those are always messy affairs.