Market Update - Dec 31st '09

Same situation today with a return to 1125 on light trading volumes. I guess we'll have to wait for another week to see some action coming back to the markets. The 1125 resistance level should act as a stall level rather than a breakout one today on this short dull day.
We can maybe get some cues from TF which tested 625 for support yesterday as anticipated, and could now creep to 632 then possibly to the high 630s. Note that TF may break out next week or early Jan and erase the retracement scenario we've seen on longer time frames. We won't jump to conclusions before we see an average 120000+ contracts traded daily.
EURUSD bouncing nicely on short time frames. We would like to see 1.4404 tested for support to aim at the recent highs or possibly (although unlikely still) to high 1.45s. The overall trend is still quite bearish so congestion is to be expected at daily level between lows and abovementioned highs.
That's all for this year.
I hope you've appreciated these daily reports. In January, we are going to offer a unique online forex daily signal service which should blow quite a few minds... More news next week, and in the meantime, I would like to wish you all a very very Happy New Year :)

Please check the ForeTrade blog next week

Market Update - Dec 30th '09

We have confirmation of the 1125 area as a strong resistance level for ES. However, to the point of being difficult again, we would have preferred seeing more volume on the high bar. Erosion is currently pausing on the 1120 area, but this drifting situation can continue to 1113 or even 1110. Again we don't anticipate anything really exciting this side of the year. Long time frames are nowhere close to turning around still.

We did notice that TF went a little ahead of itself, ignoring the 625 level and following ES on its rise to 1125. TF should also drift but it is only if/when 625 is tested again that we shall gauge whether selling will at last start. Longer time frames (daily/weekly) show no signs of reversing, and retracement potential has even reduced substantially in the last couple of weeks.

EURUSD has landed on Fib retracement level just above 1.43 but remains congested to bearish. Shorter intraday time frames which can't really use in this report point for a limited recovery at first (Fib). We still aim lower over the next few weeks.

( posted 7:30 AM UK )

Note that reports will be posted on the ForeTrade Blog from next week.

Market Update - Dec 29th '09

Here is a copy from the ForeTrade Blog report for Dec 29th 2009:

ES has now hit 1125, and it is only now that we can try and estimate opposing forces. Bulls still seem to have the upper hand at the moment but we can see that sellers are right there. One should not anticipate anything major coming until Monday, even though lower volumes can provide volatility and good trading opportunities in short time frames, but while the trading method remains the same, a daily report is not adequate here.

TF is ahead of ES and remains marginally bullish. It is obviously easier when we have a good correlation across our indices between levels and patterns. We'll assume low volumes are the cause for this temporary confusion.

EURUSD tested 1.44 as expected in our weekly report, and could even test higher grounds, at least until a Fib retracement level is hit. We do have conflicting forces across time frames so we'll safely aim at 1.443 then 1.447 if the brakout is confirmed. The more optimistic traders can maybe hope for 1.455 later on, but we'll tighten our stops along the way.

( posted 8 AM UK )

Weekly Report - End Dec '09

This blog will be moving in January 2010 i.e. next week to :
http://www.foretrade.com/blog/

And next week's report can now be found here :
http://www.foretrade.com/blog/uncategorized/weekly-report-for-end-december-2009/

Please note howwever that:
This MarketSnapshot blog will be kept maintained for more specific commentaries dedicated to TradeStation users, while the TSTT technical blog will specialize on programming issues related to the same TradeStation toolset.

Thanks for your understanding and support.

Weekly Report - Dec 21st to Dec 26th '09

ES seems to bounce on 1094 for the time being. It could otherwise just hover fairly directionless in the price range below this coming week, i.e. between 1078 and 1093. The 1102 to 1104 area is a relatively strong resistance in the short term. We unfortunately have no indication of a forthcoming end to the confusion are for now, even if the substantial retracement anticipated on the weekly chart is still there for early January.

Again, if we look at TF for correlation clues, TF has been testing 610 a number of times now and is still bullish in the short term. As mentioned in previous reports, we can discard both indices hitting their major resistance levels first (625 for TF and 1125 for ES). TF also has a Fib target on 618. In any case, buying pressure should be exhausted soon, even though volatilty may blur charts a little on account of slower trading. End of year 'window dressing' is also a common fund activity which can cause some apparently irrational market moves.

EURUSD is in bounce territory now around 1.43, which could take it to the 16.4% (1.447) or maybe even the 31.8% (1.46) levels. The longer term trend is definitely down now, so we might see 1.408 by the end of the week. Note that we even have a combined Fib level on 1.375 within the next 6 weeks.

Unfortunately, i won't be connected most of this week so there will be no daily market update.

Next report scheduled for next Sunday.

Wishing you all the best for the festive season.

Market Update - Dec 18th '09

ES broke out on the downside as expected, so an easy day overall as ES behaved pretty well to just land on the next support level, respecting the usual price quantum.
ES is now bouncing to probably test 1102 as resistance now. This remains a confusion area on longer time frame still waiting for the "big drop", so we'll stick to short time frames for now.

TF also unsurprisingly stalled on 610 and still remains more bullish, so the last push to 625 in the next week is still possible. Again, we'll have to review the pullback scenario when we get closer to that decision point.

EURUSD is now ready for a bounce if it passes 1.4404 today. However no change in dynamics in sight, so a possible upward retracement would stall on 1.462 to 1.1464 which is a very strong resistance area. The 1st 1.4404 level will be difficult enough to break already. We will therefore check for MM/Fib levels on the 30 and 60mins charts.

( posted 6:40 AM UK )

Market Update - Dec 17th '09

ES hovered in the 1100 to 1110 range as expected, and is now preparing for a possible breakout to the evolve in the lower price range with a support around 1093 (read TF below though). This is therefore the same continuation of the confusion area seen on the daily chart for about a month, and no indication yet of our anticipated retracement at weekly level. We'll have to be more patient now, and probably so until after the festive season unless to system shock perturbs the relative calm in the stock markets.

TF also stalled on 610, a level clearly showing as a stronger and stronger resistance in short time frames, but is still pushing a little. We have to figure out whether this broader based index can take ES with it. ES would then instead move back to the top of the current range. Since we do not have the usual high correlation, both charts will have to be monitored in short time frames. These markets remain relatively easy to trade in breakout mode.

EURUSD:
A daily report is not always adequate in case of fast movements. We here had a modest bounce yesterday, to see the support level being hit with a vengeance in the afternoon. This was therefore an excellent breakout situation (i.e. stop short entry) on 1.452 where EURUSD aimed straight to the next support level around 1.44 ... and is still bearish, hence this support level may well only be a pause again on the way down. We now have a 1.408 target within a week or so. Note that a bounce is still possible on the way down, maybe to 1.464 but while the scenario is plausible, this is again not compatible with this report frequency. 30 and 60mins charts will have to monitored to check behaviour on salient MM levels like the current 1.4404

( posted 6:45 AM UK )

Market Update - Dec 16th '09

ES stumbled on 1110 and is now hovering in the same price range, from 1100 to 1110. MM range has narrowed which will inevitably end up with a breakout situation. At this point in time, we could be inclined to think that 1110 to 1112 will be tested again, possibly triggering buying to the next price range, and hit 1125 finally. Only then can we start considering selling more seriously, but we'll come back to that, knowing it can happen after the festive season.

TF hit our easy 610 target as mentioned yesterday, and needs that extra push just like ES to go aim at 625. 610 will be tested again so we can prepare for a breakout situation (as well as for retracement) when there.

EURUSD behaved as expected, and we'll check for our bounce today as 1.452 is a pretty strong support level in low time frames. We'll check Fib levels on our 60mins chart for resistance. Note the bounce can be fairly strong even if it takes a short while to materialize (daily chart).

( posted late... 9 AM UK )
NB: There will be no daily reports next week

Market Update - Dec 15th '09

As mentioned on sunday, we had an easy long yesterday, with ES attracted like a magnet to the 1109 level, even overshooting it a bit. The level may a little hard to break, but there is still a slight upper bias and it would just make sense to make bulls happy and hit the target level once for all. Again a breakout situation can stop the anticipated erosion and unleash enough energy to take prices to the next range (1109-1125). Shorter time frames are recommended (15 or 30 mins), just in case the current bias fades quicker than expected.

If anything, TF is easier to read today. It is largely overbought, but is aiming at 609 now, even if it isn't clear whether it can go much higher. Here again, there is no indication of enough energy at this point in time to take it to the next price segment (610-625). We'll have to see how large banks tease with the 609-610 level first.

Finally, EURUSD.
As mentioned on the weekly report, bears are keeping it down, but it is important it holds the 1.464 area, otherwise we could have another sudden drop to just below 1.45. Selling pressure is certainly there still, so we'll watch that level carefully. Note that it can be penetrated down to recent lows and still lash back as the bounce potential is strong here. 1.476 would then be a rock solid resistance level.

( posted 7:10 AM UK )

Market Update - Dec 15th '09

As mentioned on sunday, we had an easy long yesterday, with ES attracted like a magnet to the 1109 level, even overshooting it a bit. The level may a little hard to break, but there is still a slight upper bias and it would just make sense to make bulls happy and hit the target level once for all. Again a breakout situation can stop the anticipated erosion and unleash enough energy to take prices to the next range (1109-1125). Shorter time frames are recommended (15 or 30 mins), just in case the current bias fades quicker than expected.

If anything, TF is easier to read today. It is largely overbought, but is aiming at 609 now, even if it isn't clear whether it can go much higher. Here again, there is no indication of enough energy at this point in time to take it to the next price segment (610-625). We'll have to see how large banks tease with the 609-610 level first.

Finally, EURUSD.
As mentioned on the weekly report, bears are keeping it down, but it is important it holds the 1.464 area, other we could have another sudden drop to just below 1.45. Selling pressure is certainly there still, so we'll watch that level carefully. Note that it can be penetrated down to recent lows and still lash back as the bounce potential is strong here. 1.476 would then be a rock solid resistance level.

( posted 7:10 aM UK )

Weekly Report - Dec 14th to Sep 18th '09

The last weekly report was pretty much on the ball even if it has been a chaotic week, yet not too difficult.

ES has gone all the way back up to stall level on 1105 preparing for assault of the 1109 strong resistance which could finally open the gate to fighting the 1125 level. Should be a lot of fun...

At this point it is difficult to predict wheter 1109 will break though, as there is little energy left to allow prices to creep to that salient level instead of besieging it assertively.
Whoever sold a few call spreads north of 1125 must be smiling ear to ear even if we are still waiting for that retracement still visible on the weekly chart.

TF is also a little hesitant with an upper bias, with test levels (highs) around 600, a Fib/Stall level around 610. Like ES, it isn't quite clear whether TF will eventually hit 625, now turned to strong resistance level. We note however that the retracement potential at weekly level is slowly fading, with entropy about to switch back to momentum mode (versus reversal mode). We need it to be confirmed in the next few weeks, otherwise it will disappear. Shall we have our big drop early in the new year then ? We need that salient event on 610 or 625 to generate energy, either as a breakout on the up side or the much anticipated retracement. Markets always work in quantum leaps of energy and we can notice clearly the hesitation around 500 after the March recovery. We're now experimenting the same situation exactly 125 points higher. We would then aim for 750 again... We'll come back to that scenario also early Jan.

And finally, our 3rd symbol : EURUSD
We can clearly see the quantum levels here too, on shorter time frames this time. After leaving 1.5136 to drop in a freefall, we are now in the 1.464 area.
EURUSD is still fairly bearish in the short term, but should at least test 1.464 again early in the next session. Bears could try and keep it low, possibly for the entire day, where this bungee-jumping fall should then bounce back fairly briskly. At this point in time, a bottom for the day can be friday's low or at the very worst 1.4557 (stall level). Note that the expected bounce should not be strong enough to reverse dynamics, i.e. the US$ is later on likely to strengthen further or at least stay off recent lows. Current support area if/once broken could bring the € down to 1.41 but that's at least a month or two down the line, so we'll have plenty of time reviewing this scenario.

( Posted Sunday 4 PM UK )

Morning Update - Dec 11th 2009

ES hit 1105 as planned.
EURUSD broke out as anticipated.

Look for support on EURUSD though: 1.464 while penetrated can't really break today. Traders are just aiming at Fib on 1.4611 where it will bounce and maybe stabilize.

3:25 PM UK

Market Update - Dec 11th '09

24 hours ago, i gave a scenario which would have been valid if prices had stayed below pivot level (1093), and i unfortunately didn't find the time to provide a midday report.

The 1093 breakout, which in fact could have been suspected from opposite forces in TF, allowed traders to score a few points on the way up, to reach the 50% Fib level. Shorter time frames (which are basically useless to readers after a few hours) point for some further test of 1100 and even possibly 1105, but energy is minimal right now.
The situation is still pretty messy on longer time frames, and buyers should eventually let go even if the current situation can last until ... early Jan!

TF bounced for a second time on Fib level (588), but shows signs of a continued congestion with mild conflicting forces: 60mins, slightly down, daily slightly up, and weekly still in preparation for a retracement. Note that entropy is losing stamina there. As a reminder, entropy is "dual mode": it works in momentum mode around the average, and as a tensor (e.g. an elastic) near extremes.

EURUSD is looking for support on 1.471 or in the 1.468 area where it could bounce briskly. There are however signs of an imminent breakout either way (at this very time).

( posted 7:10 AM UK )

Market Update - Dec 10th '09

ES tested 1085 on the down side, then back to the 1093 pivotlevel yesterday. Overall it behaved as expected and should drift lower again today. The retracement scenario requires ES to stay consistently below pivot level (1093), and probably more or less like yesterday until 1086 then 1078. The daily time frame should then join the party.

TF looks a little more resilient at first while being channel bound (30 and 60mins). 588 is a bounce level (Fib) for now which should keep prices in the same range. Shorter term shows a slight upper bias while longer term point towards some erosion, and despite these conflicting forces, the weekly chart still only shows a modest Fib support level (23.6%) hit a month ago which is not significant enough. In the short term, we will watch that prices remain below the 594 pivot level, to then possibly aim again at 588 (Fib test level) then 580.

EURUSD should keep on drifting lower. There are support levels like 1.468 (stall), then probably 1.464 which is pretty strong. There isn't that much selling pressure though after the big drop seen these last few days. We would need another breakout situation to clean the books and speed up selling again.

( posted 6:35 AM UK )

Market Update - Dec 9th '09

ES broke on the down side as we suspected yesterday, to hit and penetrate the 1093 level. The bounce on 1088 now needs to test that same level, then possibly 1100.
The longer term retracement seems engaged now, however prices must first break 1088 more decisively to change price segment to [1078-1093]. Since the daily chart is probably too confusing for most to swing-trade, it is easier shorter time frames, maybe down to 15mins or lower.

TF didn't hit 610 but stalled just above 605, which was more visible on shorter time frames as well. We still have very conflicting patterns across time frames at the moment, so we'll just focus on the short term trend which is down to the low to mid 590s and overall range bound.

EURUSD did more than just drift... 1.482 indeed broke, opening the way to substantial selling. 1.472 is bounce territory (stall level) but 1.465 (or just above) is our target now. That level is however a lot stronger than 1.482 used to be.

( posted 7 AM UK )

Market Update - Dec 8th '09

When it comes to chart reading, some days are easier than others, and it is often pointless trying to pick a direction. ES is going nowhere at the moment, range bound and slowing down, in hangover mode after Friday's volatility spike and waiting for triple witching next week. We can also expect end of year portfolio adjustments which can always create some surprise if volumes turn lighter.

There is little to say about ES except that the range will breakout eventually, probably on the down side even if the exact timing of the anticipated retracement on higher time frames is difficult to pinpoint on our 30 and 60mins charts.

TF is still trying to creep higher and this broader based index seems less correlated to ES, causing the current confusion. 610 would be our target here (MM/Fib).

EURUSD should keep on drifting a bit but we do recognize that 1.482 is a strong support for now. Yesterday's lows could be tested again, but like with indices, there is no precise driving force at this point.

( posted 7:15 AM UK )

Quick Update EURUSD 10h45 AM UK

Just a quick update on EURUSD:

"A bounce is possible to now test 1.489, but EURUSD should fall further to 1.477, then even possibly to 1.472. However this 1.482 support level is quite strong, so we can't discard the eventualiy of it holding for a while even though momentarily penetrated."

EURUSD indeed bounced to test level to resume south to 1.477, and is now back to 1.482

Weekly Report - Dec 7th to Sep 11th '09

What a day! Friday was the expression of the confusion i have indicated for some time. Swing trading as possible albeith difficult on shorter time frames and we should hope for volatility easing a bit on the way to the festive season. We'll still have to watch our for triple witching, but we'll have time to come back to this later on.

ES ended close to MM/Fib pivot level (1109) where it could either return to some erosion mode or aim back at Fib expansion targets (1115, 1121). Should drifting resume, support on stall (1098) then strong support (1094) won't necessarily break that easily. We can indeed still see a channel on the daily chart, but difficult to say whether ES won't try and hit the MM strong resistance at one point (see screenshot). We will check for a breakout situation on the shorter time frames first.

TF has also gone through some roller-coaster ride to end up near highs where it should aim towards 611 and probably higher close to the string resistance level on 625.
Our longer term scenario of a substantial retracement (weekly chart) is still there but is admittedly slowly fading (EntBin down to 3).

EURUSD reversed on the target provided last week, tested 1.507 for a while then dropped in a freefall. A bounce is possible to now test 1.489, but EURUSD should fall further to 1.477, then even possibly to 1.472. However this 1.482 support level is quite strong, so we can't discard the eventualiy of it holding for a while even though momentarily penetrated. We shall update this outlook during the course of the week.

( Posted Sunday 7:40 PM UK )

Market Update - Dec 4th '09

The confusion area clearly visible on daily time frame and hesitation on stall level made me pick the wrong direction (nobody's perfect), even though i was not even convinced myself. ES did not manage to push close to the (too) much anticipated resistance level on 1125. Again, i've indicated that in such case, shorter time frames are recommended.

ES broke pivot level on the downside to aim straight at stall level (also Fib level) where a bounce is likely to 1105. Longer term players are however probably slowly gearing up for the sizeable retracement mentioned before, and options traders who've place the Dec call spreads above 1125 for a while are pretty safe. Breaking 1095 would mean changing price segment to then test lows again on the mid 1060s.

TF stalled on 600 (see previous reports) to retrace to Fib and very likely lower today. 580 is our target even is a short term bounce is possible. The daily chart is just as confusing as ES, but we all know that the longer term retracement is probably under way already. It is interesting to see the conflicting Fib patterns on the daily chart, probably confirming the change of regime.

EURUSD: hit our long target yesterday to start retracing. It is now short term bearish with a pivot point on 1.5075, then maybe 1.5104
EURUSD is relatively easy to follow on shorter time frames. It should remain range bound overall, so probably a good day for easy going swing trading.

( posted 7:40 AM UK )

Market Update - Dec 3rd '09

I have mentioned on several occasions that this report is sometimes just not adjusted to the right market frequencies. In this case, the fog cleared up overnight to see ES resuming its rise, extracting itself from stall level and now aiming at 1125. This level being so much anticipated, it is not rare to see a reversal on stall level.
Renewed bullishness now guarantees a fairly easy target.
We shall review the longer term scenario this weekend, with with the channel upper line meeting resistance level.

TF is as usual in a similar situation although it has already hit it target zone (MM/Fib Exp). Short term energy is there to possibly take it to 620.

625 on TF is the alter ego of 1125 for ES, but this would mean more ground to cover for the wider index. This should translate into quite a bit of fighting while arbitragers try and balance their exposures on pseudo-equilibrium points.

EURUSD: correlation seems to be coming back, and €/$ is now aiming at 1.5135
Current level (1.512) is a Fib target on the 30mins chart so we may get there with waves.

In conclusion, volatility makes it often difficult to grasp a picture for the whole day (unless i maybe use a 120mins chart). I would therefore welcome users of the toolset to contribute to this blog.

( posted 8 AM UK )

Market Update - Dec 2nd '09

I admittedly didn't give a clear picture yesterday and maybe should have resorted to the prevailing principle "go with the flow" when the trading environment is a little confusing. There are conflicting forces across time frames, and this daily report focuses on the 60mins chart with an outlook over around 3 bars, with support from the daily chart to help cover the entire day. I sometimes find the time for a midday update, but this report is free, so only limited time can be dedicated to it for now.

ES went north to the [1103-1105] area until midday then went on to test highs again to 1110. It is now on a strong MM resistance level with some residual bullishness. On the daily chart the confusion mentioned yesterday is quite visible with a prompt reaction near the support/pivot level a couple of daya ago, thus shattering the nice and easy picture of a well defined cyclical channel. Agitation is a clear sign of a decision point coming up. We're now inches away from strong resistance level crossing the upper channel line, so we may have a last bout of selling to that 1125 level or at the very least preparation for the "battle". December is a good time for end of the year window dressing and who knows what fund managers will do to present good figures after XMas. Bonuses are major drivers in this business...

TF bounced on stall level (565) on Monday to reach the other one (589) yesterday. As mentioned in previous reports, despite the obvious correlations, TF is ahead of ES and even if it could hit resistance level on 593, the drifting engaged on longer time frames should continue overall.

EURUSD: highs on 1.511 (stall level) constitute a strong resistance where profit taking is nothing but normal. We again see no sizeable retracement, but having said that shorter time frames like 30mins provide a clearer pictures ans easier swing trading, which unfortunately cannot be commented on a daily report (at least 3 or 4 intraday updates would be needed).

( posted 7:40 AM UK )

Market Update - Dec 1st '09

Yesterday showed how difficult it is to publish only one report per day, particularly in a "confusion area" and taking into account this method looks roughly 2 to 3 bars ahead. ES is a perfect example with a modest pullback on test level but not enough energy to pull prices decisively away from that level.
ES therefore returned to the [1093-1095] area after hitting Fib PR1 (38.2%).

What now ? ES is still under the influence of conflicting forces, creeping up on short time frames, and congested to drifting down on longer horizons. ES could therefore aim at 1100 to 1103 even though we are still in a down leg on the daily channel and still waiting on the "Big One" on the weekly channel. Admittedly, "Big One" is vastly exaggerated, but some of us are getting impatient.

TF drifted to stall level (566) yesterday to go back to MM pivot level, yet is likely to turn south again. If anything, we appreciate that TF is easier to read than ES even though they are by and large correlated.

EURUSD is also in a confusion area somehow drifting directionless. We have notices a fairly strong support area on Fib level (~1.4985). One can follow some obvious visible patterns like highest highs, lowest lows, or switch time frames. Lower time frames seem to show a retracement on the way down, but the the range is narrowing which will lead to a breakout situation. At this very moment, return to highs (30 and 60mins) is possible.

( posted 7:20 AM UK)