Weekly Report - Aug 17th to 21st '09

On Firday ES received a "shock" from a systemic point of view and apparently absorbed it pretty well.

Being indeed on a strong resistance, a market is generally more susceptible to bad news, while not necessarily derailing the on-going trend. In this particular instance, ES was halted around 1016 (we note the same 16 point wide price segment we've seem for a while), to fall almost to the bottom of the trading range (~990), where it found support and rebounded late in the day.

The question is therefore: was it a false alert or on the contrary the first tangible sign of exhaustion of the bull market after a very strong month of July.
MTFS on the 60mins chart could indicate a return to the lower part of the trading range, so we'll check the behaviour on 1000 then on 990. However while we can see a pivot on higher time frames, there is still a lot of residual buying pressure. We shall review our scenario as the week progresses particularly if our trading range breaks out on the down side.
Traders who have been long for a few weeks should consider tightening stops below 980.

The scenario is the same for TF. We'll be watching closely the 555 and 548 levels. Again, not much concern just yet.

( posted 8 AM UK )