Weekly Report on ES - Feb 23rd to 27th '09

Oh well, when i said "ES could really sink deep" last week, i somehow didn't quite anticipate we would have such heavy selling, but it was witching day on Friday, thus adding to the high volatility environment.

I added a commented chart on the technical blog, and we still have a strong correlation to our other Russell index (see article below), so we'll just glance at ES peculiarities here.

60mins:
Inches away from it's 750 target, so immensely anticipated that buyers came back to avoid options being exercised and maybe triggering a more dramatic bloodshed. The following bounce has been here more convincing than for ER, with MTFS looking like it could take prices a little higher. ~780 will be key and we have to be careful as options and futures expiry can certainly spike the market. Longer time frames certainly do not provide any support for optimism just yet...

Daily:
MTFS here confirms a bounce potential in oversold territory, possibly to a Fib retracement level, on mid 780s or close to 800. Having said that, i wish to reiterate that we have no reason to go long right now, as there is no recovery potential right now.
However 750 is quite strong, and we may just see prices hover for a while in the bottom half of the same range we've had for the last 2 months, i.e. [750-812]

Weekly:
Same as ER, and as mentioned on the commented chart, the picture at this level is just as bearish. Without any change in dynamics and assuming 750 will hold (even if possibly breifly penetrated) the above scenario of prices being restrained in the lower half of our trading range is our best bet. We'll therefore check the key 812 level later on in case of a sudden bounce.

( posted 6 AM UK )