Weeky Outlook on ES 1st to 5th Sep '08

Dominant TF: 60mins, weekly
Swings: DN-UP-DN (from UP-UP-DN)
Market Direction(daily): long, with tighter stops

Please also read ER2 post below for guidance.

Another roller-coaster week, down and then up again, with only some weakness ahead of the weekend. A good week to trade shorter time frames, or to wait quietly that uncertainty finally settles to open way to the anticipated yet difficult recovery. We'll see below that 1281 is key to the continuation of this ES recovery.
As usual, we'll follow the general macro-economic context.

60mins: looking for support
ES will be looking at testing the 1281 level for support. The [1250-1313] range is split into 4 equal segments, and prices may remain in current [1281-1297] segment or fall into the next one below. While it should hold, we'll have to wait a few bars for confirmation, and eventually update our game plan.

Daily: same weaker trend - 1281 level is crucial to this recovery
Despite 2 blue bars, ES is still relatively congested overall. A slow difficult rise is probably emerging, but we'll remain very cautious here. As for the 60mins chart, we have to wait for prices to move to an upper segment, and breaking the 1281 level would definitely indicate continuation of this congestion period... to a possible new test of the 1250 level!

Weekly: Again, worst is over but...
Virtually no change from last week.
Now that we've seen support holding, we have been looking for a recovery potential, but it appears it will start on a slow note.
Compared to last week, only the MTFS crossover looks a bit more positive. This does not change our outlook in the least as such crossovers generally provide little recovery potential. A congestion or limited upper bias remains our favourite scenario for the time being even if Entropy is weakening too fast for our liking.