Market update - Feb 13th '09

We anticipated that the market needed a (last) bout of selling to clean out a few punters. Will it be enough now to turn the page over and look at a new cycle though ?
ES indeed had to test 812 pretty much head on and even reached 805 for a short while. We've seen equivalent levels in the past 4 weeks, so this was clearly a volatility effect.

What's in store for today ?

ES has a stall level at 840 (also a 50% fib retracement level) and a strong resistance at 844.
One should not expect fireworks just now, but any move away from danger zone is positive. Today, one should see some continuation of momentum trading. It is not clear yet whether ES will retrace on the low to mid 840s or whether it will pass it, test it as support to then move to the upper half of the trading range (to the mid 870s). That's for next week anyway.

ER follows a correlated path. It bounced on 437 (hit a low around 433) then reached MM pivot already. It now has to either retrace or move to the upper part of the trading range as well (from 453 to 468). Longer term 468 will be hard to break and we may just stay in that messy trading range for a while still.

( posted 6 AM UK )