Weekly Report on ER - Dec 8th to 12th '08

Dominant TF: 60mins with other time frames not far behind.
Swings: UP-UP-DN from UP-DN-DN (looking better by the day)
Market Direction(daily): staying long.
Options (RUT): put spread.

Last week i mentioned markets would be up overall and yet quite volatile. The situation is about the same now, except maybe that bigger players are ready to move in now more convincingly. We'll see that we still have a lot of volatility ahead, but the change in mindset we picked up last week will be more and more visible.

EURUSD: €/$ is now aiming at 1.288 then 1.293. It could crawl higher even if ever so slowly, and despite the high volatility, we keep our target at 1.37 in January. Over the medium term, we however do have a trading range with a pivot level ~1.27. We'll watch cautiously for higher support levels to confirm the current upper bias.

ER 60mins: aiming at 484 (stall level)
ER is more or less back to the same price area we saw early last week, and the same target around 480 is still valid. We however notice swings being way to steep and MTFS reaching extreme levels again. We don't anticipate a smooth ride to 500 and consolidation will be necessary during the course of the day.

ER Daily: looking better
Even if our long position has shown a pretty shallow take-off, we're believe that ER should reach its first target levels (480 then 500) where we will cautiously tighen our stops. We have a potential channel breakout and Entropy has clearly bottomed. MTFS however reminds us to be cautious, probably indicating some difficulty to pass our first resistance levels on the way to a clearer recovery. If 500 is passed and tested for support, we will update our targets (Fib/MM).

ER Weekly: bottom ?
The weekly chart shows little change from last week. Entropy hasn't bottomed yet, so we'll wait for another week or two at this time frame to see current prices stabilize. However we do notice a blue bar at last and a MTFS while still not looking great shows some upward inflexion now. We do still believe the worst (~380) is behind us but we may (and probably will) see some retracement when our first targets (daily charts) are hit.
Behaviour on that key target area [480-500] will however determine market direction for at least 4 to 6 weeks. We do start plotting Fib target areas in case of a breakout. We are not at a decision point yet at this time frame, so we'll have to review our scenario next week.

ON ACCOUNT OF THIS EXCEPTIONAL MARKET SITUATION, DAILY UPDATES ( --- EXCEPT FOR TOMORROW TUESDAY --- ) WILL BE POSTED ON THIS PUBLIC BLOG THIS WEEK AGAIN.

(posted Monday 2:50 AM Eastern)