Market update - Jan 7th '09

As usual these days, we complement our short term outlook with a tick/volume chart. Obviously it is not quite compatible with a daily/weekly report but gives a better perspective to the 60mins chart, and i invite users of this technique to build their own mix of charts with the same indicator set.

So, what happened yesterday? First EURUSD had to make me lie by a few pips... I was targeting 1.33 (1.33057 to be exact) and the market bounced on 1.33119 ... Not quite an exact science, isn't it ? Anyway, the market bounced to a first Fib retracement target to pause there. EURUSD could retrace to the low 1.34s in the short term (tick chart). Longer time frames seem to show EURUSD looking for support to probably shoot higher later on.

ER carried on its course and hit its target. I conservately gave 510s, but it actually came inches away from the Fib retracement level on 519. Now it is not clear where it's going next, however it may look for support on 500 to then go higher. This however does not mean it will go MUCH higher. The selling point is maybe just a little higher (just above 550s). We are still in a failed recovery scenario on our long term weekly chart. (NB: failed recovery may mean cup&handle or just a choppy recovery with a better limit long entry point in the next few weeks)

ES is again following a very similar path with a substantial resistance level around 937, yet a willingness to go and test 955 before retracing. We'll remain careful as buyers may just give up here in the short term. Too late to enter long anyway...

( posted 7.20 AM UK - screenshots available on request )

NOON UPDATE: a commented chart is available on :
http://ts-trading-technique.blogspot.com/2009/01/eurusd-chart-with-commentaries-2.html