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During the session on Friday, the US Nonfarm Payroll numbers come out, and as a result we believe that the US dollar and the US stock markets will take focus. Looking at the expected number of 220,000 jobs added for the month of July, we need to understand that any shock to the system via a bad numbers or extraordinarily strong numbers can cause quite a bit of volatility.

If we get a number that's reasonably close to the 220,000 level, any knee-jerk reaction should immediately have you thinking of going the other way. This doesn't mean that you do it immediately, but rather you wait for signs of weakness. It is quite common to see the EUR/USD pair jump in one direction initially, only to turn things back around and jump in the other direction. By the end of the day, it's quite often relatively unchanged. We think there is a high potential of that happening today.

Looking at the stock markets, the US markets in general have pulled back during the session on Thursday, but we feel that any signs of support should be call buying opportunities in the S&P 500, the NASDAQ, and the Dow Jones Industrial Average. With this, we are bullish of stocks but we realize that we may need to let the markets react first, and then place our trades.

Precious metal still look like put buying opportunities on rallies, and we will continue to look at them as such. We think that any rally during the session today should simply be an opportunity to buy puts at higher levels. We have no interest in going long via calls at this point in time in either gold or silver.