Market Update - Dec 2nd '09

I admittedly didn't give a clear picture yesterday and maybe should have resorted to the prevailing principle "go with the flow" when the trading environment is a little confusing. There are conflicting forces across time frames, and this daily report focuses on the 60mins chart with an outlook over around 3 bars, with support from the daily chart to help cover the entire day. I sometimes find the time for a midday update, but this report is free, so only limited time can be dedicated to it for now.

ES went north to the [1103-1105] area until midday then went on to test highs again to 1110. It is now on a strong MM resistance level with some residual bullishness. On the daily chart the confusion mentioned yesterday is quite visible with a prompt reaction near the support/pivot level a couple of daya ago, thus shattering the nice and easy picture of a well defined cyclical channel. Agitation is a clear sign of a decision point coming up. We're now inches away from strong resistance level crossing the upper channel line, so we may have a last bout of selling to that 1125 level or at the very least preparation for the "battle". December is a good time for end of the year window dressing and who knows what fund managers will do to present good figures after XMas. Bonuses are major drivers in this business...

TF bounced on stall level (565) on Monday to reach the other one (589) yesterday. As mentioned in previous reports, despite the obvious correlations, TF is ahead of ES and even if it could hit resistance level on 593, the drifting engaged on longer time frames should continue overall.

EURUSD: highs on 1.511 (stall level) constitute a strong resistance where profit taking is nothing but normal. We again see no sizeable retracement, but having said that shorter time frames like 30mins provide a clearer pictures ans easier swing trading, which unfortunately cannot be commented on a daily report (at least 3 or 4 intraday updates would be needed).

( posted 7:40 AM UK )