Market update - May 12th '09

Selling started yesterday, and those who switched to lower times frames have certainly scored on a fairly clean down swing. MTFS is also joigning the party on the 60mins chart and we notice that the strong resistance level has dropped to 922, indicating a forthcoming trading range with a support level in the 890 area. Again a significant retracement is not visible yet.

Note however that the the Daily MTFS is also tilting, so we'll watch for a possible lower support level (end of week or next week).

The 500 level on the ER (TF) has been an everyday reminder that the broader market has been ready to retrace for about a week. It is obviously always difficult which market will pull the other one even if 500 certainly looks stronger on ER than the equivalent resistance level on ES. Let's however NOT jump to conclusions: the daily bar is STILL blue, so funny enough, resistance is stronger AND retracement potential more limited.

Today, we'll watch 906 as a key level on ES, which could send prices somewhat lower.

( posted 7:15 AM UK )