Market update - Feb 27th '09

Markets are desperately trying to hold on key levels and they might indeed. When we see so much selling pressure, there is only 2 ways to dissipate such energy, either the market does not resist and waits for prices to reach a new equilibrium level, or tries to absorb it to evacuate in another form. At the moment, the market is indeed "both feet on the brakes" trying to stop the fall, thus generating a lot of heat...

Now, obviously nobody knows whether the brake pads are worn out or not, but our visibility is limited anyway.

ES:
In the short term, we might see yet another bounce attempt, and again with no chance to hold, so whoever wants to go long should switch to lower times frames. Our tick chart does pretty well in such environment.
Mid to long term, those who have been short can stay short, eventually cashing in some profit. Some may want to sell on breakout.

ER:
Similar story as we can expect. ER reached stall level and is should now aim to targets given previously i.e. close on on 375.

Since ER and ES are slightly out of synch, ES could settle around 730 to follow ER... We shall see...

Note on EURUSD: 1.27 is STILL key level...

( posted 6 AM UK )