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During the session on Wednesday, we get several announcements coming out of Great Britain, the United States, and an interest rate announcement coming out of the United States. Because of this, we could have a bit of volatility in the markets overall, but we believe that the longer-term trends will continue as per usual.
1 – Energy continues to struggle, and as a result we have no interest whatsoever in buying calls when it comes to oil and natural gas. On the other hand, short-term rallies in energy markets could offer put buying opportunities as we go forward.
2 – We believe that the US dollar will continue to strengthen overall, and as a result we like buying calls or puts in order to favor that particular currency. Given enough time, we believe that anytime you see weakness in the US dollar, it will get corrected by the markets as there are far too many issues out there to think that risk appetite is going to strengthen at the moment.
3 – Stock markets in general look like they are continuing to struggle, and as a result we prefer buying puts in general, at least until something changes economically. At this point in time, the market continues to offer short-term opportunities to the downside again and again, and should continue to do so.
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