Looking at the session for Monday, there isn’t much in the way of economic announcements to move the marketplace. However we do have Core Personal Consumption Expenditure or Core PCE out of the United States, and that can have a slight effect on stock market. Beyond that we believe that the market to be technically driven.
Looking at the FTSE 100, you can see that we have formed a fairly negative move recently, and it now appears that we could continue to go bit lower. We believe that there is support below though, and eventually we will turn things back around and continue the uptrend. We believe that the support is down at the 6700 level, and that it’s only a matter of time before the buyers step in.
FTSE
Looking at the EUR/USD pair, you can see that we fell initially and tested the 1.08 handle. However, we found enough support there to turn things back around and form a hammer. That hammer suggests that we may very well go back to the 1.10 level where we should find plenty of selling pressure. We are buyers of puts closer to the 1.10 handle.
The S&P 500 struggled a bit during the session but remained above 2040. Because of this, we believe that the market will in fact bounce and head back towards the 2120 level given enough time. We are buyers of calls on short-term supportive candles as well as an impulsive move higher as we believe that the market will head back to the highs and go much higher than that given enough time.