Weekly Outlook on ES for Sep 8th to 12th '08

Dominant TF: 60mins, weekly
Swings: UP-DN-DN (from DN-UP-DN)
Market Direction(daily): flat, re-entering long on shorter time frames

Please also always read ER2 post below for guidance.

Another roller-coaster week yet again which can have been costly to some as one should either trade on the dominant time frame or just hang on until volatility settles now.
You will have noticed that the price segment analysis will have helped with abandonding the 1281 level to try 1250 then 1220 in clear 30 to 31 points gaps. 1281 remains an important level going forward.

60mins: recovery in place
In times of high volatility, following movements on this shorter time frame looks easier at first, but in fact, moving to even lower TFs is recommended keeping this 60mins as the context TF. We'll watch resistance levels (Fib/MM) and where prices now settle. There may be a number of adjustments and arbitrages in the next couple of days (we'll keep a close eye on EURUSD and bonds this week).

Daily: high volatility, but no major change overall...
significance level has dropped for a while at this TF, so the more conservative will have switched to a higher or sometimes lower TF, or stay on the sideline for a while.
We see a recovery to the 1270-1281 area, but we certainly need volatility to subside a bit to determine a clearer direction. ES may therefore congest for a while in this price segment or the one above.

Weekly: Congestion to very limited upper bias for now
Despite last week's volatility, virtually no change in our outlook:
Now that we've seen support holding, we have been looking for a recovery potential, but it appears it will start on a very slow note. Ou MTFS crossover does not point to any convincing recovery. A congestion or limited upper bias remains our favourite scenario for the time being.