Market update - Mar 4th '09

When we saw 375 being tested as a resistance, we all knew ER could only go down, and it did...

A fall like this one comes in waves, not Elliott and the like, but rather lines of defence being smashed one after the other. Prices indeed always try and find an equilibrium level in quantum leaps.

So now, in absence of clear Fib pattern, except for some possibility of a target ... near 330, we just estimated where the next wall will be, and it is around 31 points lower than the previous one (375). This means we could still see more bloodshed. Sellers however generally pull on brakes 7/8 of the course, so we could see another attempt to break the fall in the high 340s.

About ES now:
While dynamics are obviously similar, ES has reached its short term target given yesterday (687.5). Here also we have the same quantum jumps which could eventually take prices all the way down to 625, but let's first give this support level a chance. Again NO chance of recovery in the short term but stopping the pain would already be beginning of healing for some.

( posted 5 AM UK )