Market update - Mar 13th '09

Nice run yesterday, obviously easier to follow intraday. ES only slowed down to ~710 to then get a boost to the major 750 resistance level.
The bounce was easier to predict on ER (aka TF), largely correlated anyway, which was already on a salient Fib level. It then passed 375 to rather settle for the Fib PR1 around 392.

Now while both symbols are overbought in the short term, they should remain in higher territory. ER could need to test 375 as a support to confirm this new price segment. As mentioned yesterday, even on this rather slow time frames, a long entry is always worth taking, even if we know this is still a contrarian trade (weekly chart not looking good). Any long trade on ER would have a stop around 355, likewise 705 for ES.
Retracement on ES should be limited anyway, as even tick charts now give the bottom of the new price segment (i.e. 719) as a very strong support level.

NB: The daily chart does not indicate a smooth rally. On the contrary, an early MTFS crossover is generally indicative of a bumpy change in trend with a Cup&Handle formation, double bottom, or even a failed recovery in the worst case scenarios.

More details this weekend on the weekly report.

( posted 5:40 AM UK )