The GBP/USD pair has been rather volatile recently, but finally broke down during the session on Monday. By slicing through the 1.52 level, we feel that this market is in fact going to continue to go down towards the 1.51 handle, and then possibly 1.50 where it will find even more support. With this, as long as we are below the 1.52 level, we feel that you can buy a short-term puts in order to take advantage of small moves with the overall attitude of the market.
In the FTSE, you can see that we try to rally but found far too much in the way of resistance above. Because of this, it appears of the market is going to head back towards the 6900 level, where it should find plenty of support. If we get down to the 6900 level and find the market starting to bounce, we would be buyers of calls as the area has been fairly reliable. It is not until we break down below 6800 that we would consider buying puts.
Facebook bounced off of the $79 level during the session on Monday, showing significant support. This is exactly where we had anticipated seeing it, so now we are buyers of calls in this general vicinity as we believe the market will then head to the $82 level given enough time. We have no interest in buying puts at this moment.
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