Looking at the Monday session, there’s very little in the way of economic announcements worth paying attention to outside of the United Kingdom. Because of this, we feel that almost all of the substantial action will be found in the FTSE and perhaps in the GBP/USD Forex pair.
The GBP/USD Forex pair fell substantially during the session on Monday, but still remains within the consolidation area that we have been in for some time now. Because of this, we believe that there is potential to finally make a significant move but will have to wait until the end of the day in order to place any serious money on a trade. However, we would recognize that there is the possibility of buying puts if we get a little bit of a bounce as we should more than likely continue to be bearish over the longer term.
The DAX looks absolutely horrible. We formed a shooting star at the bottom of the downtrend and that’s always bad news. We feel that if this market can get below the €9500 level, we should then head to the €9400 level. We would be buyers of puts underneath the €9500 level, and as a result we are bearish. On the other hand, if we go higher, is going to be difficult as the €9700 level above is so resistant.
The gold markets look like they are starting to sell off a little bit, but we recognize the $1200 level as been supportive, so we are waiting until we get below there in order to start buying puts. In the meantime, we anticipate that the gold markets will be very choppy, and as a result it’s likely that we will be relegated to treating short-term charts and ultra-short-term options playing the range back and forth.
