The Monday session has several different announcements that could move the marketplace, all of which are Manufacturing PMI numbers. They come out of the United States, Britain, and Germany. So because of this we will focus on a few specific markets for the day.
We believe that the DAX pressing up against the €10,000 level will more than likely find sellers stepping in and order to take profits. Those pullbacks should be opportunities to buy calls based upon value, as we believe the DAX will ultimately break above the €10,000 handle. On the other hand though, if we get above the €10,000 handle without pullback, we would have to believe that call buying opportunities exist for longer-term move is considering that we would then enter the next leg higher. However, the DAX is fairly parabolic so pullback would be preferred.
The EUR/USD pair struggled at the 1.25 level again, and then fell. Because of this, we believe that the put buying opportunities abound every time we rally, based upon short-term charts. We believe that the EUR/USD pair will continue to go much lower given enough time, and therefore have no interest in buying calls at all.
The FTSE looks very healthy as well, and if we can get above the 6775 level, we believe that it will continue to go much higher. At that point time we would anticipate a move to the 6900 level, and then perhaps as high as the 7000 level as well. The shape of the candle suggests that the buyers are in control, and we believe that the market will ultimately show strength time and time again. Pullbacks offer value as well, as the FTSE should continue to be strong given enough time.