Market Update - Oct 30th '09

Yestersday's bounce was a little stronger than anticipated, but took ES to Fib/MM level so we got the signal and target, even though we did not capture the effect of volatility. It has been said many times on this blog and elsewhere, that volatility is essentially a time compression variable which is not easy to capture in TradeStation.
ES is now back to the top of the price segment which is a strong resistance level. We've seen EntBin moving from extreme low (-5) to extreme high (+5), indicating volatility and hesitation for this last day of the month. We'll check a lower time frame and Fib levels from yesterday's swing.
The same applies to TF where a lower time frame is here more than recommended. Yesterday's bounce should fade pretty fast, and lows will be tested again some time next week.

EURUSD: airhole effect could take prices back to 1.479 then 1.477 within a couple of days. However a "airhole" does not mean in any way a sudden drop. It is rather a congestion period leading often to a breakout situation.

More on the next weekly report.

( posted 6:45 AM UK )

Market Update - Oct 29th '09

Market reading has been quite easy lately, and many traders must be smiling ear to ear... ES is now on the 60mins stall level and still looking a little bearish.
The early MTFS crossover is a classic example of a stall which may translate in a soft landing in the low to mid 1030s.
We shall notice again and again our 32 points segments. If this one breaks, we might head onto 1000 again.
The Entropy is very low (EntBin=-5) so a bounce is more than likely, however selling pressure is still too strong in the first hours of the day.
On the daily chart, we notice the channel boundary, the Fib level and a lot of bearishness, so we'll certainly have to check for a breakout.
TF is also coincidentally on a strong support level on both 60mins and daily charts. It is therefore in bounce territory when the selling pressure fades a bit.

EURUSD: on stall level as well (60mins), on the channel low boundary (daily), so a lot in common with our indices. At this point in time while the € could drift a little further, we know that the retracement is bound to be limited (weekly chart) hence we first have to analyse the price behaviour on this stall level (1.471) and on or near strong support level (1.464)

( posted 5AM UK )

Market Update - Oct 28th '09

ES is really struggling with the current support level, and should sink further today. We have a MTFS early crossover forming which could mean an unconvincing attempt to hold or even bounce a tiny bit, but we should rather look at channel bottom on the daily chart, in accordance to Fib retracement levels.

If we look for some confirmation from TF, it is clear that it is aiming for range lows and stall level in the mid to high 570s.
The pullback could later on take prices further down.

EURUSD: very modest bounce on support level, which is also a channel boundary on the daily chart. Traders will try and keep it above the 1.477 support level, but negative pressure is certainly there still and profit taking could continue to the 1.464 area (to be confirmed).

( posted 6:30 AM UK )

Market Update - Oct 27th '09

ES fell to the support level after breaking out. We had anticipated it as prices stayed below the key pivot level and selling pressure accelerated. ES should remain fairly bearish, yet 1062 should hold and a minor bounce is even possible at first.
As mentioned on the weekly report, the current support level will determine whether prices will fall to the next price segment or not. It is unclear whether this will happen today or not... but it could in the next few days.

TF is also sitting on its strong support level, and since it is a also strong Fib level, a bounce is likely. However, like for ES, we should start preparing for a pullback to the low 500s.

EURUSD: we'll check for a channel bottom as we still don't see any major retracement coming. Short term bearish for now.

( posted late 10h30 AM UK )

Weekly Report - Oct 26h to 30th '09

ES has taken a bit of a knock on Friday, but one should not jump into conclusions of the "big one" just yet. It is only normal profit taking at this stage. Indicators on the 60mins chart do show a bounce potential, but 1078 will be key level. If prices stay below it, we can safely assume ES has moved to the lower price segment and will aim at 1062. That level if/when hit will be a lot more crucial going forward.

TF is also in soft landing mode on stall level just below 600, and could later drift to the strong support level (~594). Longer time frames also show that retracement target as key support which could trigger substantial selling pressure. Although a major retracement is due, we cannot say with any sort of accuracy whether the timing is right. We have all noticed a sort of double top and a return to the [500-513] range is in the cards, but we'll need to update our scenario as we go along (triple top ??)

EURUSD: we notice some exhaustion of the Euro, and a narrowing of the range which could lead to a breakout situation this week. The US$ should remain weak in the short term, and a lower time frame is recommended. We'll check 1.502 for support.

( posted hastily 6:10 AM UK ... will try and give an update around noon)

Market Update - Oct 23rd '09

ES has been oscillating in a same trading range for about a week now. It is still trying to push higher, and one cannot discard the possibility of a last breakout to the next price segment (~32 points to 1125). I personally think we'll have to go through at least another round of oscillations in the current trading range.

TF is also a little volatile. It is currently sitting on the Fib2 level in the mid 610s, with a bit of buying pressure prior to the open. TF has been leading the retracement so far and since we know a pullback is in the cards, we'll watch the market action carefully. TF must indeed at least pass recent highs and even breakout 625 to escape from the erosion scenario which could accumulate some momentum later on.

EURUSD follows the same path of indecision on target level (stall level to be exact), otherwise nothing new really. Correlation with indices is high. Profit taking to be expected soon, but really nothing major... The US$ has lost all its shine, and this situation should last at least a few months months.

( Posted late, thanks to Blogger.com being down for a while, 9:30 AM UK )

Market Update - Oct 22nd '09

Yesterday's market action was a little too abrupt for our time frames and i hope you have switched to lower time frames as recommended recently.

1094 is indeed a strong resistance, only a few points away from a Fib target on the daily chart so it is a good price area for the "air hole" also mentioned in recent reports.

Having said that, on our time frames at least, we don't see the potential for a the big retracement just yet. We believe prices should drop again today to the low 1070s, but should bounce relatively soon (Check 30mins time frame or lower).

TF has been showing the way south and pulled back a little more markedly. It hit stall level just below 600 and could even reached support level on 594. Selling pressure is however not as strong as one could imagine, so yesterday's dip does not preclude a sizeable retracement here either. At least for now...

EURUSD: nothing new really. €/$ has hit a target on stall level and has the potential to go a little higher still but is certainly more hesitant now. It might have a go at it after gathering strength near range lows around 1.49

( posted 7:30 AM UK )

Market Update - Oct 21st '09

Sorry about yesterday... Could not find a minute to connect.

ES is finding it difficult on 1094 but it isn't clear yet whether this is the signal for the pullback we've been waiting for. Prices should indeed hover around current levels, and test resistance again. We shouldn't be too far from the peak now so i again recommend moving to lower time frames.

TF has already retraced a bit to 610 where a bounce is likely. Same period of hesitation otherwise, so caution must be equally be exercised at these levels, even if we don't anticipate any strong pullback in the short term.

EURUSD has hit the target we had on MM stall level. We also notice that the retracement potential on the longer term (weekly) is fading, hence only minor profit taking could slightly affect the current bullishness in the couple of weeks or so. Passing stall level and then the strong 1.51 resistance should prove difficult though, so we'll update our scenario as we get close to target.

( posted late 8:25 AM UK )

ES has reached the 092 target we gave last week to retrace to mid-resistance level (high way to pivot level). It is now even more hesitant, and even though higher time frames still point to a new target close to 1125, we have to remain cautious about significance level on the MTFS which is dropping fast, indicating we should pay more attention to a lower intraday time frame. We'll therefore first check whether the [1076-1080] support range holds on Monday morning, as it could trigger selling to the 1060s.

TF is also hesitant, losing a little bit of ground without any selling pressure. Erosion could continue to 610 first, maybe 604 later on. We'll have to update this over the next few days, as a If selling doesn't pick up momentum, a congestion period could last for a while.

EURUSD: Quite resilient, it is testing Fib/MM level around 1.486 to 1.489 for now, and could lose a bit of ground to 1.48. Like for indices, selling pressure is pretty mild still, so we may see some congestion, trading range and even our target being hit still.


That's all for now... We'll try and be a little more definite over the next few days. On account of traveling, Tuesday's report shall however unfortunately be posted late.

( Sunday 11:40 AM UK )

Market Update - Oct 16th '09

ES is now on its resistance level on the 60mins chart, and looks still bullish... As mentioned in previous reports ES is aiming to 1125 or at least to the stall level just below.
We're anxious to see whether that will be the retracement point we're looking for.
TF is also bullish, close to the 625 resistance level but while also looking bullish right now, looks like having less upward potential. We can expect some fighting on current levels, and can't discard a volatility spike in either direction.

EURUSD seems to be following indices, in a catch 22 situation like for gold, offsetting returns in Euros terms. EURUSD is more hesitant now, but should remain bullish if it stays above 1.489
Stall level is on 1.498 with the strong resistance on 1.501, this is an area where we should see that anticipated exhaustion and likely modest retracement.

( posted 6:40 AM UK )

Market Update - Oct 15th '09

Sometimes chart reading is easier, particularly in momentum mode when "quantum" levels are visible.
ES is now very close to the 1094 resistance level, and residual bullishness should support ES moving higher again.
TF which was slightly ahead of ES is now more in sync, and is also inches away from the 625 resistance level, which could prove a lot harder to break.

EURUSD: same story... €/$ should hit stall level and probably resistance level around 1.5 later on. While going with the flow, one should always remain cautious about the apparently obvious though.
One can't discard the possibility of a sudden bout of selling on target.

( posted 7:50 AM UK )

Market Update - Oct 14th '09

ES keeps on rising relentlessly... hesitation on highs has now faded so we can expect it to reach 1085 today (maybe 1093).
I know i probably confused some readers with my retracement warning on the weekly chart: yes, it is still there, charts are clearly overbought, but the momentum effect is too strong in the short term.
TF is now loading correctly again here. It is moving along with ES and should aim for the stall level or maybe right to the resistance level on 625.
Again, we have to realize that the retracement scenario is a little more advanced here than on ES hence TF could lead the forthcoming retracement (next week?). We'll come back to it in due course.

EURUSD: US$ is very weak and despite being on a target now (1.489), resistance level could break hence we could hit our longer term target (just above 1.50) earlier than we thought.

( posted 7:15 AM UK )

Market Update - Oct 13th '09

ES is now testing september highs with some hesitation. It isn't clear whether it will stall now in the short term, but it is probably too early to assume the timing is right for the retracement announced on longer time frames for some time. ES will probably try and creep higher, maybe up to the next Fib/MM level around 1125.
The dominant time frame being the 60mins chart, we'll remain obviously quite cautious.

TF hit stall level yesterday. This can explain the current exhaustion, but 625 is just around the corner now and should be tested still. We do notice that TF is definitely closer to the anticipated retracement.

EURUSD: key level 1.477 could determine some retracement if broken but this is unlikely. Current hesitation is quite normal but we still aim higher in the longer term around 1.50 to 1.51

( posted 8 AM UK )

Weekly Report - Oct 12th to Sep 16th '09

ES has crept higher relentlessly the whole week, right to the 1062 resistance level which is still valid even though penetrated on Friday.
Since we should always stick to our "go with the flow" guideline, we have to push back our longer term indications of the retracement announced on the weekly chart (EntBin = 5).
The daily chart also remains bullish for now, but we have to realize that the 60mins chart IS the dominant time frame by far with a significance level of 88% (only 34% and 31% on higher time frames).

ES could therefore either enter into a airhole or test September highs again, or higher to 1125. We're not going to carry on waiting anxiously for the reversal point as it can take a couple of weeks or more. We'll monitor shorter time frames, update our scenario day after day, and as always "go with the flow..."

No TF data (problem with the TradeStation server) so we can 't confront the analysis of our two indices as we always do. We'll try again tomorrow.

EURUSD: The situation is not so clear here with some erosion in short waves on the 60mins chart. Yet, on the daily chart, the trading range we've seen since mid-october is still valid, with 1.464 remaining a key pivot level. Like for indices, a retracement potential is quite visible on the weekly chart, but once confirmed (after hitting 1.50 or 1.51 in a few weeks?) such pullback should remain relatively limited (23% Fib retracement at the very most).

( posted Sunday Noon UK)

Market Update - Oct 9th '09

The upward momentum is fading but is still there in the short term (60mins chart) and we have the same situation of conflicting forces or diverging information at least across our charts.

ES could and should stall but could technically creep higher. 1062 remains the key level for the time being. The weekly chart is pointing towards a retracement (EntBin=5) but it can be in the next 3 weeks or more! We'll therefore stick to the 60mins chart for direction.

We'll go with the flow with TF also bullish on 610 resistance level, with no indication of a strong retracement initially. It could however retrace to 1st or 2nd Fib level in the next few days if 610 holds.
TF tends to tell us that the forthcoming potential retracement on the weekly chart is both obvious yet limited also. Confusing isn't it ?
The market will almost certainly try and test one of the key levels we've seen in recent weeks, for support this time.

EURUSD: range bound for now.

( posted 8:30 AM UK )

Market Update - Oct 8th '09

As said yesterday, ES is under conflicting influences, hence "our outlook is still of an upward bias on the hourly chart, of a congestion on the daily chart and of a retracement over the longer term".

ES is now on a strong resistance at 1062 trying to go even higher. Taking the risk of looking stubborn, our outlook is unchanged today.

TF is on stall level with some residual bullishness, so could reach resistance level on 609. Like ES, it should however stall, congest (daily chart), and eventually retrace (weekly chart).

EURUSD: still bullish to 1.477 so we should go with the flow (as always) while remaining cautious. Like indices, we anticipate a peak. Retracement should however be limited.

( posted 6:20 AM UK )

Market Update - Oct 7th '09

ES shot up to Fib PR2 around 1052, which could jeopardize our longer term scenario. We have to admit that chart reading was not as clear over the last few days with conflicting information. This unfortunately happens sometimes.
Obviously the report frequency being daily, one can expect the information to be more related to the shorter time frames, but we also try to provide a longer term view.
Our outlook is still of an upward bias on the hourly chart, of a congestion on the daily chart and of a retracement over the longer term...
We'll check 1052 on ES and 600 on TF as short term resistance levels.

EURUSD: we'll keep an eye on 1.464
€/$ should lose a bit of ground, but behaviour on that key level will determine where it will go next.
We notice that despite being very overbought selling pressure on the weekly chart has reduced, hence the retracement we've announced for a while may be overall even more limited than we anticipated.

( posted 5 AM UK )

Market Update - Oct 6th '09

I have to admit the weekly report is a little wrong. We did notice a landing on target with no selling pressure to go lower, but we could not anticipate a jump over the weekend (news?) even if the time was indeed right for a reversal.

ES now retraced to the first salient Fib level and still does not convince us of a stronger recovery. Obviously, volatility has been pretty strong over the last week that a move of 1% or 2% up or down would not be indicative of anything but noise. Right or wrong, we keep our target down over the medium term.

TF of course also bounced, or should i say, led the bounce since the support level on 578 was certainly obvious. TF also bounced to Fib level and like ES will probably fade over the next couple of days.

We'll refine our targets over the next few days.

EURUSD broke on the up side and hit about stall level (1.474) close to the 1.477 target. We cannot at this point say that the retracement below 1.45 was the one we expected just yet. We'll have to wait for the weekly pivot to confirm, knowing that chances of a strong retracement are certainly low.

( posted late 8 AM UK )

Weekly Report - Oct 5th to 9th '09

Our chart reading went quite well last week.

ES indeed landed on 1022 as anticipated, breathing a bit on its way lower. There is not enough selling pressure to justify a Fib target on the weekly chart, so we'll keep a cautious target around the stall level on the 60mins chart (i.e. just below 1010).

TF is sitting on a strong support level so the same dynamics may lead to some fighting at first. A floor could be found half a segment (~16 points) lower in the low 560s.
Like for ES, we'll then check energy levels to then confirm weekly Fib targets or not.

EURUSD: strange volatility spike which bounced on 1.452 (after penetrating it quite deep) to hit the 1.464 key level. This event makes our time frames send us conflicting information, but we'll stick to a higher probability scenario, erasing the effect of the spike to return to our previous erosion mode. We'll check 1.452 again then 1.444
Again our weekly chart does only point towards a minor retracement (16 or 23% Fib at most).

( posted Sun 8:30 AM UK )

NB: Tuesday's update will probably be posted late

Market Update - Oct 2nd '09

We finally got our retracement ! Last report was posted before we could confirm the acceleration but the direction was right nonetheless. Hedge funds probably had a go at indices on the 1st day of the month (will it be a dreadful October like many times in the past...)

ES is now on its target (1022) where a temporary bounce is possible. We aim lower though around 1007 or even 1000 but maybe not today. We are however not going to turn morose and start drawing Fib retracement levels on the weekly chart.

TF has been if not leading at least giving us clearer pictures lately and we notice the strong support level on 578 (stall level 582). We'll wait to see whether the level holds today, or whether like ES, we aim lower. The pressure is on but selling could well abate temporarily.

EURUSD: we would like to see a bounce on strong support level on 1.4526 but the daily chart is bearish still. Should the level break, EURUSD could shed another full cent in less than a week.

( posted 7:40 aM UK )