Weekly Report - Nov 30th to Dec 4th '09

On Friday, ES bounced to 1095 (cf report) responding again pretty well to MM/Fib levels. The Dubai pseudo-bankrupcy was obviously a non-event to manipulate markets on a light volume day. Some traders have made a LOT of money on that kind of hoax.

Anyway, looking at the forthcoming week, we are still in the same daily channel even though the "confusion factor"is increasing. This 1095 area is again a test level to try and test highs again around 1110 or follow the down Fib expansion pattern visible on the 60mins chart. In any case, we have only 2 scenarios either the channel on the daily chart hits 1125, or the pullback starts on current levels (with a high of 1112). In this uncertain environment, an upper bias is likely at first.

TF tested its MM/Fib target around 562, then bounced to 579 which a test level (also Fib/MM). It is following the same dynamics as ES and despite the same upward bias in the short term, lows should be tested again by mid week.

To be quite honest though, I would wait for the market to settle a bit after the long weekend, so a mid day update would be justified.


EURUSD: hit stall level on 1.507 with some residual buying pressure. A lower time frame would be recommended to pick a reversal short signal which could take prices back to 1.496 later on. We will monitor MM/Fib levels when the MTFS is completed and sellers take control. Profit taking should remain limited.

( posted late 8:20 AM UK )

Market Update - Nov 27th '09

ES took a bit of a knock on Thanksgiving, only exacerbated by lighter volumes. It has now hit stall level on 1070 where selling should slow down and maybe even bounce. Reaching strong support level in the low/mid 1060s is however likely. On daily/weekly time frames, even though selling was abrupt we will only validate the "big slide" on a channel breakout.

TF is already on strong support level, and on Fib/MM target on the daily chart. Current levels should hold for a short while, but it looks like the substantial retracement announcement a while ago is under way. If current levels are broken, the next target is in the low 530s.

EURUSD has reversed quite abruptly to also reach a Fib target on current levels (~1.482). Selling pressure is still prevalent in the short run even if lows should hold for now. In case of a bounce, 1.489 (and then maybe 1.495 later on) will be test pivot levels which could send prices further down or not. Mid to long term look a little messy, so shorter time frames are again recommended.

( posted late 8:40 AM UK )

Mid-day update

What a beautiful slide...
Selling pressure is still strong but target area is now in sight.

Market Update - Nov 26th '09

Same confusion for longer term players, and same fun for intraday traders. The trading range is known, so is our preferred time frame (30mins to 60mins). Levels are nicely demarcated with MM and Fib levels... so much so that the overall chart reading technique is just a little "add-on" to public domain stuff.

So, ES bumped onto the strong resistance level to retrace abruptly. Test level will be the range lows now. Buyers may give up the fight and let the big slide begin. We'll first check 1095 (stall) and 1093 (strong support) for a possible breakout. Note that the daily chart is not indicating anything particular, hence despite this volatility spike, this is just the same congestion on that time frame.

TF is also aiming at range lows around 580. We've been repeating that TF seems to be leading and while there is still a bit of fighting around the current range, a breakout to 560 (and possibly lower) is in the cards.

EURUSD did hit our target on 1.513 to trigger some normal profit taking, probably to 1.5045 now. The low 1.50 have to be tested for support to validate the new range after yesterday's breakout. We have no indication of a major pullback just yet, so intraday time frames are again recommented even if not quite adequate for this daily report...

( posted very late 8:45 AM UK )

Market Update - Nov 25th '09

ES hit 1095 briefly, which served as a test for the 1093 level mentioned recently. ES is now clearly testing the top of the range, therefore aiming at 1109. As we generally go with the flow, we have to assume it will try and breakout to go and touch the 1125 level, which would also be a channel high on the daily chart. We'll update the scenario later on. We first have to break current highs, which is in no way obvious.

TF is maybe providing more clues, with a test level around 593 which could send prices back down to recent lows. We do notice that TF is following Fib patterns very precisely on the 60mins chart. If broken, TF may test 598 or even aim for the 606 area. We however believe it will stay congested for now until it is ready for descent (daily/weekly)

EURUSD: on the rise again, and aiming for the strong resistance level (1.5015). Yet, it should lose steam and only a breakout situation to 1.513 could affect the scenario. We are still in the same "hesitation territory" visible in longer time frames, which should translate into congestion for at least a few more weeks until the weekly pattern is completed.

( posted late 8 AM UK )



PS: It must be noted once again that this method is adequate for swing trading as it captures energy level in a quantum way. It does not always capture volatility as the outlook is generally 3 bars ahead, sometimes down to 1, sometimes as long as 5. It is therefore impossible to cover a full day using a 60mins chart, and mid-day updates are too time consuming at the moment. Thanks for your understanding.

Market Update - Nov 24th '09

Short report from London while connecting...

ES broke out as we suspected, even if we again didn't quite catch the volatility spike. Not too important for swing trading though. ES should try and test the same 1093 level today, and remain somewhat messy on the daily chart. This pivot announced on the weekly chart is certainly still hesitant.

TF: same situation... Are we now going to see the much expected pullback...? Like ES, i don't think it will happen overnight.

EURUSD: largely oversold on intrady time frames. It could test 1.49 (MM) again or 1.487 (Fib), but a bounce (spike) is likely. Again, the probability of a sizeable retracement is fading, and we could see more of this congestion for at least a few weeks.

( posted late 8:05 AM UK )

Weekly Report - Nov 23rd to 27th '09

The weekend is always a good time to reflect and gauge how previous reports anticipated forthcoming market action. It's not an exact science, and again, it is impossible to estimate whether this chart reading technique provides some insight 1, 2, 3 or sometimes more bars ahead. Overall, it's not doing a bad job.

ES has lost a bit of ground last week to the high 1080s and despite some buying late in the day on Friday, should try and find support a little lower, more likely around 1078 (Fib/MM). In any case, 1093 is a test level for this last retracement, which could trigger the last bit of selling to 1078 or send prices back to 1102. Should the market opt for the down scenario, we would still be in our same channel (daily chart) but we can't say yet whether ES has engaged into the retracement we've been announcing on the weekly chart. In addition, this weekly chart is still not showing a pivot, and indications of a retracement are starting to fade. This probably means that only a clear channel breakout on the daily chart can confirm the retracement scenario or not going forward.

TF has landed inches away from support (578) which remains a major test level. The short term outlook is hesitant with conflicting pictures across time frames, but the down side is more pronounced than on ES. Here again a breakout of the 578 level would certainly clarify our patterns and confirm a return to the low 500s.

EURUSD has test levels ahead (1.4873 and possibly 1.492) to try and stop the current erosion. There is no indication of a sizeable retracement, and on the contrary looks fairly congested with a support level just below 1.48 hit last Friday. On the upside, we'll keep an eye on test levels above and a possible channel breakout. We'll have to update this rather fuzzy picture as we go along.

( posted Sunday 6:20 AM UK )

PS: Note that on account of traveling, there might be no market update on Tuesday morning.

Market Update - Nov 20th '09

ES broke out on the down side. It was a typical breakout situation but i admittedly advised to cover both sides on a OCA basis. ES wiped the MM level to fall to the Fib level visible on the daily chart. Here again no surprise, and an easy trade overall. Today 1093 will act as a pivot levelto dtermine whether the index resumes south or not. Indicators will point timidly up to 1097 or even to 1102 but the job hasn't been done i.e. there are still a few sellers out there who will try and keep ES below 1093.
TF fell to stall level and should also try and complete the down pattern before moving on to a new formation. So, the strong support on 578 might be hit to make shorters happy, even if TF should try with much difficulty to move slightly higher (Fib Expansion). The 30 mins chart is easier to read and confirms the scenario. Basically, we're looking at a mild retracement up on the 60mins chart, some upward congestion on the daily chart, with the same weekly chart ready to swing down.

EURUSD looks congested with an upward bias. We have an unambitious short term target at 1.494 for now.

( posted 6 AM UK with an awful headache )

Market Update - Nov 19th '09

ES once again behaved as expected and stayed range bound between 1101 and 1110. In such a situation, a shorter time is always recommended to pick reversal points, the context being provided by the weekly chart. The residual bullishness there is still suprisingly resilient. Again, it is difficult to predict whether ES will hit 1125 before the substantial retracement we've announced for quite some time, but this is in any case a good breakout environment where we can place stop orders outside our 60mins chart's range.
If we take cues from TF, the upside shows good potential after bouncing on MM/Fib levels on 594. Should that scenario materialize, we should see 610 to 612 being hit over the next few days. So, we'll have to be a little bit more patient for our reversal short...
EURUSD follows the same clear patterns. After hitting a high on 1.4990 it retraced to first Fib target and should head further down. This remains a relatively messy situation, congested at daily level, and not quite ready for profit taking. Shorter time frames (30mins) are easier to read with the same support level on 1.4891 for now. A second Fib level is around 1.486 but we again can't guarantee EURUSD is ready to retrace to the 1.46 levels.

( posted 4:45 AM UK )

Market Update - Nov 18th '09

The report yesterday indicated ES would try and aim higher, testing 1110 again, even if we are clearly in a 'confusion area' as this is also a reversal zone.
The current Fib expansion pattern had a first target on 1111, i.e. in the same target zone. It could break out to the next one up (1118) or more likely test retracement levels just above 1100 or even lower. In other words, the 60mins chart will probably look congested again, which means that a shorter time frame may be recommended, taking in consideration the context provided by the daily/weekly charts.
TF is hovering high near stall level, looking unconvincingly at creeping higher to around 610. A Fib target has been reached on 602. So, will buyers try and give it one last shot ? We hope to see time frames aligning for a clearer picture soon, and this probably on the way down.

EURUSD: The signs of exhaustion mentioned yesterday actually turned into a sizable retracement to bounce to Fib (~1.489). This pivot level will determine whether selling now resumes or not. Our indicators would rather point down, but rather to congest in this new trading range (yesterday's lows to pivot level) than fall a lot further.

( posted 5:30 AM UK )

Market Update - Nov 17th '09

So far, so good... ES climbed as expected to hit resistance level around 1110 where it started retracing. Erosion to ~1100 would be normal (Fib/MM), and although improbably to the next Fib levels. The daily chart still looks very bullish but may be losing steam and even stall ahead of the 1125 target. ES will at least try and give it a go in the next couple of days. The weekly chart is looking at peaking soon, so the context is known and understood. Providing this is in line with your trading style, lower time frames (15mins and 30mins) will be easier to trade.

TF reached the 2nd Fib expansion target (602), i.e. a little higher than expected. It is now more hesitant ahead of stall level (605) and strong resistance (609). If TF carries on leading, it should try and take both indices a tad higher, but certainly with increasing difficulty.

EURUSD was a little spiky yesterday, with larger players out there to clean out the book. €/$ briefly hit the resistance level on 1.501 again to then lose a bit of ground. Hesitation can help keep prices in current high range nicely delimited by both high and low spikes yesterday, but there are more and more signs of exhaustion going forward.

( posted 5:50 AM UK )

Weekly Report - Nov 16th to 20th '09

We've seen ES testing October highs to probably aim at channel highs, at the strong 1125 resistance. Nothing new here...
Bullishness is still indicated there on both the 60mins and daily charts. Our target this week is probably more the 60mins strong resistance level near 1110. It isn't quite clear yet whether ES will push to 1125 as we know a pullback is already announced on the weekly chart.
TF is leading ES and while it is aiming at the 60mins Fib target near 592 or MM resistance on 594, that area is also a strong 61.8% resistance on the daily chart (~597). Since we have here as well the retracement announcement on the weekly chart, we look at the resistance area as a potential reversal point we will monitor closely. We do not change our longer term scenario for the time being.

EURUSD is short term bullish trying to break out the 61.8% fib retracement to aim to stall level (1.4894) and probably higher to resistance level (1.501). That target will however lead to some congestion. I mentioned last week a scenario given by our weekly chart whereby EURUSD would stay high (retracement potential is fading by the day...) probably until year's end or more likely early Jan. That outlook is still valid.

( posted 5:50 AM UK )