Market update - Mar 5th '09

I gave yesterday some information about price jumps (quantum leaps) and this current volatile provided a good example of such move in just one day. Prices indeed bounced from the support level in the high 680s (687) to the high 710s (719 to be exact), i.e. the 31 to 32 point range i mentioned previously (this value actually hasn't changed in the last 6 months at least).

So ES hit a strong resistance level to retrace sharply down. As said before, the conditions are not right for a recovery, and only contrarian traders on shorter time frames can have a bit of fun here. ES should however try and stay above 700 (Fib Ret + MM) and possibly try and test the resistance level again. This does not change our longer term scenario (see weekly report)

ER is on the same boat and tested the already discussed 375 level again.
Markets could be cooling down a bit, at least temporarily. On the longer term, there will be that indecision or debate about 375 being either broken opening the way to lower lows, or Monday's lows only momentarily penetrated (or strectched) under the effect of volatility.
I won't give an answer now, but to give credit to the latter scenario, prices must creep back above 375. Full stop.
If prices stay too long under that level, gravity will prevail...

( posted 3.50 AM UK )