Weeky Outlook on ER2 11th to 15th Aug '08

Dominant TF: Daily, Weekly, with 60 mins lagging a little
Swings: UP-UP-UP (from UP-UP-UP)
Market Direction(daily): long
Options (RUT): no change in outlook for August, i.e. condor outside the 625-750 range. Some will have followed an older comment about going safer above 780. It is a personal risk preference although 750 should not be passed by expiration.

If we read last week's (daily) comment again, we can see that a retracement 'just below 700' was in the cards (Aug 4th), that the resistance level would be tested to try and go higher (730s). Obviously, only those of you who see charts in realtime or at least day by day have seen action developing according to forecast.
Same story on EURUSD where focus was given on "pivot (may) be tested again, opening the way for further gains later on". This occured early monday, to give the Euro slide a lot more energy. Breaking the 1.534 trendline (lows) only accelerated the movement.
A really easy easy week overall... :)

EURUSD: we have a strong resistance level coming now, and a retracement looks inevitable now. However, the reversal is now well engaged, and once this level just below 1.50 is broken, more gains will be in store. This will make the Chinese happy, bodes well for the US campaign, and should leave doomsayers speechless... :)


60mins: upper bias should weaken
MTFS is certainly bullish but is quite overbought also, hence profit taking may start shortly. This is also confirmed by an Entropy about to peak. Having said that, we'll wait for an white line inflexion, Entropy going darker blue and even a red paintbar to take a possible retracement trade (for the braves only).
Should the remaining momentum take ER2 higher first, our target is around 742 (stall level), on the way to 750 later on (not visible at this time frame yet).
Retracement should be limited to around 726.

Daily: could creep higher
Very little change in fact: This is again the dominant time frame and MTFS lines still point higher. The 720 Fib level broke out to provide some additional energy to reach 730. MTFS lines gradient is moderate but Entropy is coming back a bit so ER2 could try and pass current stall level to give a go at 750 later on. It may take time however, and one may even see some very moderate profit-taking first (note: bar is still blue).

Weekly: upper bias - same trading range for now
We're now aiming back at the upper range boundary, but apart from that, nothing to add to last post really. We're in a summer recovery mode but the trading range is still there and unless new energy comes on a breakout of the 750 level (750-756 area to be exact), one may just go for another round of congestion. We'll have to wait a few more weeks and more volume to get a better picture.