... a ray of light ...

Oh well, yes, i got it wrong yesterday. It does not happen too often, so i won't take it too badly. We had a support level around 843 on ES, and a pivot level around 875 and those levels were cleared marked on our charts. What happened was a sudden breakout effect to the next resistance level. This is nothing new and charts reacted very well. Regular readers now know that we always have to analyse those price jumps in the light of quantum dynamics, i.e. prices being attracted to predefined levels.
Secondly, i repeat again that high volatility acts as a time compressor which requires looking at shorter time frames. This is also why i still publish daily updates on this blog dedicated to weekly market reports, and it is sometimes not even enough.

Do we have to now jump and buy frantically? I'm afraid not. But let's first have a look on our charts:

EURUSD: We have a target around 1.27 to 1.274, and we have to see whether 1.27 will now act as a support to go higher. It is unlikely though. This bounce is likely purely technical. We keep our mid term objective in the 1.22 area, with continued volatility. A bottom may be near.

ER: Nice rebound to Fib PR1. Obviously one would need to see 500 passed and even tested for support to see a change in trend. We may have a 2nd up day but no major reversal right now even if again volatility plays tricks on us.

ES: Levels are even clearer here, with 930 being a strong resistance ahead. There could be some carry-through, either technically motivated, or from some start of herd effect, but we're not out of the woods yet, and there will be opportunities at cheaper prices still.

Over the longer term, we know we have an absolute bottom either around 843-875, i.e. just behind us, or in the low 700s still. The massive amount of negative pressure has to dissipate in one way or the other, with a much awaited decrease in volatility. This has to take at least a few weeks and possibly until the end of the year. Difficult to say whether markets will sink or hover, but the clear buy signal later on will be the test of 1000 on ES. We may have a few interesting battles before we count the dead and feast among victors...

(Snapshots available on request)