Looking at the Tuesday session, really the only thing that we are paying attention to as far as economic announcements are concerned is the Australian interest rate decision. That being the case, the market looks to the Reserve Bank of Australia for its opinion on the marketplace and global economy. The interest-rate decision itself won’t necessarily be a huge deal, but the statement could be. If the Aussies believe that the world’s economy is falling apart, that of course will have a negative effect on stock markets around the globe.
That being said, the FTSE looks as if it trying to rally during the course of the day on Monday, but struggled at the 6800 level. With that, we ended up forming a shooting star, and that suggests that we are going to fall from here. If we do, the 6600 level were so should be supportive, and we will buy calls on a supportive candle. In the meantime, we expect quite a bit in the way of volatility.
FTSE
The EUR/USD pair tried to rally during the course of the day on Monday, but continues to struggle new the 1.14 handle. With that being the case, it appears that we can continue to buy puts on short-term rallies and will do so. Ultimately, we believe that the market will head back down towards the 1.11 handle given enough time. The 1.15 level above should continue to be the “ceiling” of the market.
The silver markets were very quiet during the course of the session on Monday, and that’s very bullish in our opinion. That’s because we had such a massive selloff last Thursday, and have since simply sat still. That shows that the sellers are running out of conviction, and that the area just below the $17 level could offer significant support. If we can break the top of the range from the Friday and Monday, we would be buyers of calls heading back to the $18.50 level.