Market update - May 27th '09

Sorry for yesterday... one of those days...

Anyway, was i right or wrong ? A bit of both. ES indeed hit lows as expected, but i did not pay enough attention to the bounce potential. ES even passed a significant 906 level and could therefore aim back at range higher in the low to mid 920s.

Having said that, this is only "noise" at daily level, and this trading range is kind of directionless, and could eventually break on the way down, as described in previous reports. Our outlook remains a target in the mid 820s upon breaking on the 866-875 level. On the upside, the target would obviously be the almighty 1000.

If we take cues from TF (aka ER), we'll have to check the 500 level carefully. It should hold and send prices down, but we'll remain carefully of a breakout nonetheless.

( posted late 7:40 AM UK )

Market update - May 26th '09

Just a quick note today. One should expect slow drifting to last week lows, or to major support as described in previous reports.

More details tomorrow.

( posted late 10 AM UK )

Weekly Report on ES & TF - May 25th to 29th '09

Last week, ES bounced on stall level to reach about Fib PR1. ES now shows little energy either way on the 60 mins chart, which is maybe understandable as markets are closed today on Memorial Day.

The longer term scenario remains unchanged with markets looking at taking profits down to the mid 820s yet not showing more than a marginal profit taking potential at the moment. This can be explained by a relatively strong support level in the 866-875 area.
One cannot exclude a less likely scenario of prices rising to sell more heavily on 906-908.

TF again follows about the same path with a possible landing on 468 on the 60mins chart. The daily chart gives us a lower target in the low 440s, but doesn't show any energy to take us there yet. Breaking 468 would certainly help but we'll assume a trading range for now.


( posted 7:10 AM UK)


NB: the market update will be posted late tomorrow.
Memorial Day today in the US.

Market update - May 22nd '09

Selling took prices almost to the 875 level to bounce late in the day. That level is definitely going to be a test for our target in the mid 820s.

We see ES having difficulties passing the 892/894 levels and some range bound trading is quite possible. Only if 875 is broken, will we then consider the retracement starting. In the meantime, it is recommended to rather stick to lower time frames.

Having said that, we cannot discard 892 (acting as a pivot) breaking to then see movements in the higher part of the price segment i.e. 892 to 906. For the time being, we favour the lower trading range i.e. below 892. Again, a lower time frame is required to pick up movement details.

Same for TF, except price segments are wider percentage-wise.
Check 485 to 489 for pivot.

( posted 7:15 AM UK )

Market update - May 21st '09

We've had TF showing clearer patterns for quite a while, with the almighty 500 level acting as a "strange attractor" and now triggering some selling. Our target on the 60mins chart is 480, but again, the selling pressure is quite limited on the daily chart so it is difficult to say whether we'll reach the low 440s Fib target there. A period of congestion is more likely.

Let's go back to flagship ES now.
It is started a pretty steady descent with an immediate target on 894 then 890 (tick charts). 892 is actually also a Fib target, so we have a few easy points to pocket there. However we have to realize that while we do have a Fib target nicely laid out for us in the mid 820s, we have no indication of substantial selling pressure to take us there yet.

( posted 7:15 AM UK )


Note: Next Tuesday's report (May 26th) will be posted late.

Market update - May 20th '09

ES stayed high yesterday and even spent most of the day a little higher than the 910 level i mentioned to only start drifting in the afternoon.

We should see a continuation of the current movement, probably to 900, then 895.5. Selling pressure is however limited. We have noticed that the 875 resistance level has turned to support level last week. It can technically be tested again opening the way for a more sizeable retracement to the 825 area, but it is only one possible scenario at the moment. Again, there is not enough selling pressure at the moment and buying could resume in the mid to high 890s levels.

Same situation on TF (ER).
Possible target in the low 480s, but selling pressure is simply not there right now. Who knows... It may just take a spark to get the market going though...

( posted 6:20 AM UK )

Market update - May 19th '09

Who's now surprised about volatility? The expected bounce on 875 started on 876.75 (certainly not an exact science and even less so on long time frames), to jump right up to the top of the price segment, almost exactly equal to Fib PR2.

Prices should stay in this high part of the range at least in the short term, but again, while we don't anticipate heavy selling, ES should stay in the same price range for now (i.e. below 910).
We may have some congestion or drifting, but it will take some time to reach the 1st Fib retracement target (866), to then possibly validate our scenario for a target in the high 820s. We'll update this scenario as the week goes along. Again, not much of a selling pressure on the daily chart.

TF again follows a very similar pattern and could lead ES on its profit taking path.

( posted 6:40 AM UK )

Weekly Report on ES & TF - May 18th to 22nd '09

ES is retracing in a pretty clean manner with an obvious target around 875. We've had a small bounce on 878 (1st Fib target) on the 60mins chart, but selling pressure is still there. In fact, support could be found a little lower (~867).

On the longer term (daily chart), it seems ES could shed another 50 points for a retracement target around 825. Having said that, we still have no indication of significant selling, and even less of a return to a bearish trend, so we'd better check behaviour on the [866-875] support area.

TF (e-mini Russell 2000) follows a similar path with an immediate target around 468, and seems a little more bearish (reversal indications were also clearer last week). It may reach 444 by the end of the week. Like ES, let's first see what happens on 468 before we confirm that (likely) scenario.

( posted 7:20 AM UK )

Market update - May 15th '09

Hmm, should i just copy/paste yesterday's post... ?

ES bounced on stall level, in fact bounced exactly on Fib target inches below stall level (882). We would always favour days like these but one can't see more than some drifting down, or some trading range in the short term.
ES needs to go test 875 (possibly penetrated to the high 860s) to confirm the new Fib pattern on the daily chart.

ER looks the same, with a logical target near lows on the 60mins chart, and yet only limited selling pressure after a down week so far. Could be directionless day here too, even if drifting should continue next week.

( posted 6 AM UK )

Market update - May 14th '09

I've been saying all along that the retracement would be somewhat limited, but how limited ? Buying pressure was strong enough until to justify prices staying above 875, close to a generally weak Fib level (~866). Now it seems obvious that 875 will be hit (Fib target was 878 on the 60mins chart), and while such level certainly looks like a reasonable landing zone on the 60mins chart, selling pressure has picked up some momentum on the daily chart. So, one might have a bit of fighting in the current price area, to eventually drop another price segment (still about 31 points wide) maybe tomorrow, or some time next week.

You will notice that ER (TF) gave us the actual retracement signal better than ES itself. It is therefore recommended once again to follow the behaviour or mood of both indices (€/$ is also interesting). TF also indicates a "landing zone" around 468, and could also go lower after testing that support for a while.

( posted 7:10 AM UK )

Market update - May 13th '09

Nice bounce on the 60mins stall level, typical of a fast move all the way from strong resistance level around 922.
One could have anticipated it to be stopped around 906 (MM+Fib) but volatility was strong enough to take it to the next Fib level. Will it even reach 915 now?

906 is a pivot level, i.e. prices can bounce on that level at least momentarily, but the drifting down should then resume anyhow.

We can also take 500 as a reference price on TF. If not broken, selling should pick up speed (see channel forming on 60mins chart)


( posted 7 AM UK )



Reference on MM:

http://ts-trading-technique.blogspot.com/2007/11/murreymath-gann-more-details.html
http://ts-trading-technique.blogspot.com/2008/09/few-words-on-mm-stall-level.html

Market update - May 12th '09

Selling started yesterday, and those who switched to lower times frames have certainly scored on a fairly clean down swing. MTFS is also joigning the party on the 60mins chart and we notice that the strong resistance level has dropped to 922, indicating a forthcoming trading range with a support level in the 890 area. Again a significant retracement is not visible yet.

Note however that the the Daily MTFS is also tilting, so we'll watch for a possible lower support level (end of week or next week).

The 500 level on the ER (TF) has been an everyday reminder that the broader market has been ready to retrace for about a week. It is obviously always difficult which market will pull the other one even if 500 certainly looks stronger on ER than the equivalent resistance level on ES. Let's however NOT jump to conclusions: the daily bar is STILL blue, so funny enough, resistance is stronger AND retracement potential more limited.

Today, we'll watch 906 as a key level on ES, which could send prices somewhat lower.

( posted 7:15 AM UK )