Monday, December 29, 2008

Weekly Report on ER - Dec 29th '08 to Jan 2nd '09

Dominant TF: 60mins leading, with Daily dropping lately.
Swings: UP-DN-UP from UP-UP-UP (range bound on the 60mins chart)
Market Direction(daily): preferably flat, or tight stops at this time frame.

As anticipated, no action on ER last week, and such situation should persist this coming week. As usual, we'll start the report with our outlook on EURUSD which is a lot more exciting:

EURUSD: last week, we indeed saw a retracement to ~1.39 on Monday which quickly proved to be a very strong support, from which the US$ started weakening. Those who followed our recommendation to sell the US$ must be smiling. We probably also have had a bit of luck as the fall of the US$ may however have been exacerbated by lack of volume inducing the US$ to lose ground without much resistance. The long term trend is in any case clearly indicating a return to the high 1.40s (or even higher) but this last spurt above 1.41 should technically only be a short term spike before settling below or at the MM resistance level (~1.4146).

ER 60mins: ER has been a little erratic at this time frame, yet we still have an upper bias hence a breakout is always possible even if there is very little energy right now. Lack of volume can also make market reading a little tricky. Those who wish to trade intraday in equivalent intervals should turn to 16000V bars for instance.

ER Daily: At this time frame, we see buyers resting rather than actively besieging the 500 barrier. This is typical of this time of the year, yet we may see surprising moves this week. At the moment, the time frame is clearly not the dominant one and MTFS is very difficult to read so we'll remain on the sideline or very careful as the situation is definitely affected by lack of energy and lack of volume.

ER Weekly: No change from last week (cf. report Monday 22nd). Entropy certainly looks a lot better but MTFS had an early crossover generally indicating a failing recovery hence should pull back before going higher later on. Like mentioned last week, buyers can maybe wait a little longer, or enter preemptively on an aggressive limit price or wait for a consolidation and buy market later on.