Sunday, June 14, 2009

Weekly Report ES & TF - Jun 15th to 19th '09

The market again showed remarkable resilience last week. ES tested the 950s as expected only to retrace to the 937 area which still acts as a pivot level.

We're coming close to the end of the ESM09 contract which has been quite bullish since March. Both 60min charts on ES and TF show low SQ (swing quality) level hence, one chould take cues from the daily chart and eventually trade a lower time frame (< 30 mins).

The daily chart is again clearly overbought and bullish, indicating some turbulences and possibly some retracement ahead of the stall level (high 960s). Such bullishness and forthcoming turbulences are also particularly visible on the Daily MTFS with the white line crossing the green line. As described many times on the TS-T-T blog, this is called a "early crossover" which can hardly stop ES from marching ahead to the otherwise overly anticipated 1000 level. We'll therefore watch out cautiously the stall level first (~968), and a likely retracement back to the low 920s, which is a Fib retracement level on the daily chart and the low of the trading range on the 60mins chart.

In the very short term, Friday's bounce on the 937 pivot level is also a a sign for a higher support level, which means that any retracement potential should remain minimal. We'll notice a Fib retracement level in the low 920s which coincide with lows of the trading range on the 60mins chart. We certainly can't discard some substantial volatility on triple witching week so we'll watch out for this key level to see which scenario develops (968 or 920 ?).

Lastly, if we take a look at TF for possible discordances, we do notice that the daily chart has reached its first Fib target level which could trigger some selling to now test the 500 level for support. No such sign in the short term though, so again, we'll need to update our scenario as we get closer to futures and options expiration.

( posted Sunday 11 AM UK, updated Monday 6:50 AM UK )