Market Update - Jul 9th '09

Again, markets seem to behave in a fairly orderly manner. On the ES chart, the 875 level shows some resilience still and is so oversold that a moderate bounce is possible.
We still keep our lower target for now, in the 860 area, then maybe 840. As mentioned many times in previous reports, this is not a trend reversal but only a normal pause after the extraordinary recovery since March.

TF came close to the 469 support level yesterday where it bounced temporarily. Like ES we aim for a lower target now. Our support level should be hit within a few days, but low volumes can cause normal seasonal volatility.

( posted 7:15 AM UK )

Market Update - Jul 8th '09

Always good to see the market behaving as anticipated. We've seen the 883 level holding for a while, to now test a stronger support level at 875. The thing is that we have some indication of further selling, so while this test area should hold the selling pressure in the short term, we'll keep an eye on a lower Fib targets on the daily and weekly charts. Likewise, if/once 484 is broken, TF could shed 4 to 5% to reach the low to mid 460s later on this week.

( posted 5:50 AM UK )

Market Update - Jul 7th '09

After hitting top stall level near 930 a few days ago, ES fell to the bottom stall level yesterday (883), thus confirming range trading on the daily chart (cf. weekly report below).

ES could potentially rise to 900 (Fib level). However the daily chart is still drifting so ES should remain in the bottom part of the trading range, and one can envisage 875 (May lows) being tested later on this week.

TF also bounced bounced on a salient level, and shows the same "failed recovery" crossover on the 60mins chart, hence while it can aim back termporarily to the high 490s, TF should also resume its drifting down. Again, a likely target could be in the 460-470 area where it could gather strength to aim back to higher levels (600-625) later on (September ?)

( posted 6:50 AM UK )

Weekly Report - Jul 6th to 10th '09

So, we've had the long awaited retracement last week, so far limited to one price segment on ES (921 -> 906 -> 891), still roughly 15 points apart. While it should later on go lower, we are still in the same trading range on the daily chart, and selling pressure remains relatively limited on higher time frames.
Breaking 875 which would mean falling another price segment would definitely confirm the retracement we announced a long time ago. Now to be honest, we tend to often ignore the minor 23.6% Fib retracement level which sits on 883 on the weekly chart. So, considering the fairly weak selling pressure, the level may be valid and after a period of trading range on the daily chart, prices could eventually rise again.
To be on the safe side, traders who aren't short or delta negative, may want to enter in a breakout both ways, possibly even reducing the spread between entry levels or even try a short butterfly.

TF is still hovering on the 500 key level (Fib support : ~498 on the 60mins chart). Despite a possible short term bounce, that level needs to be broken still. We've noticed here also a narrowing of the trading range, and also a typical breakout environment, potentially exacerbated by lower volumes going forward.

So, to summarize, let's keep an eye on our key levels, watch a possible bounce early in the day (after the long weekend) and watch carefully the trading ranges given by our price segments. We still favour more retracement even if selling pressure is not as strong as we would like to get over and done with this selling phase. We would then at last see the market then move on and resume its course north, eventually attacking the almighty 1000 level.

( posted Sunday 7:30 AM UK )

Market Update - Jul 3rd '09

Aaaaaah ... At last! We finally got our reversal point. The market reacted on a bad unemployment report at a time when it was already prone to retrace thereby exacerbating its effect.

ES is now aiming at a lower target still, either on 886 (Fib Expansion), or stall (882). We're now at last testing important levels where the market will have to chose between bouncing on the 875 area or retace fully to 840 or lower. We should be able to have an answer within a few days (more details on the weekly report).

ER is following the same path, with a possible pause here in the high 490s (Fib level), but probably aiming lower later on.

Let's note however that it is too early to announce a major retracement. There is a lot of residual energy in the market, and the 875 to 882 area will be the true test. We cannot discard the possibility of the market stabilizing just 1 price segment down, range trading between current lows and 906.

( posted 8:15 AM UK )