Weekly Report on ES & TF - May 11th to 15th '09

Markets have been marching ahead last week, ES leaving the 875 level behind. It seems like this bull run finds no major resistance, but are we really going straight to 1000 now ?

On the 60 mins chart, we'll watch 930 (stall level) and 937 (new resistance level). ES actually hit 927.75 and a provisional pivot is already showing. It is recommended to trade those waves on a slightly lower time frame.

The daily chart is staying strong, minimizing the impact of volatility on the 60mins chart, hence while we do see energy exhaustion at this level, the MTFS pattern points higher. We have to acknowledge however that the MM levels haven't budged yet, i.e. strong resistance level has not moved to 1000. If we add that a pivot is also showing on last high, shall we see the expected retracement at last.
As always, we'll wait for a red bar, and since MTFS is so bullish, profit taking isn't likely to bring prices lower than the 16 or 31% Fib levels.

The weekly chart is also showing a provisional pivot.
Again, we do not anticipate a change in the dominant trend.

The situation is exactly the same on ER (TF), with however significantly more hesitation on current levels, and here again some profit taking would provide some order in this chaotic environment.

( posted Monday 11th 7AM UK )

Market update - May 8th '09

ES reached 927 yesterday, i.e. close to the 830 stall level to then retrace a bit. Will that be the signal to take profits ? Again the daily chart does not give indication of any serious selling yet. A short term return to 875 is possible some time next week but it is not visible yet.

Today, we'll watch possible resistance levels on 918 and 922 but again, no reading "between the bars". Bars are still blue on all time frames.

ER (TF) is different though as again the 500 level is certainly still holding, so caution MUST be exercised.

More details in our next weekly report.


( posted 7 AM UK )

Market update - May 7th '09

ES is following its course north now with a target around 930 (60mins chart) or higher (daily chart). Obviously there will be minor profit taking sessions along the way, and 906 could be a support level now.
Funny enough, the current rise looks like a gentle walk in the park with actually little underlying energy. We should therefore just enjoy the ride while it's there...

ER (TF) follows a more difficult course as it has not broken 500 yet. Will it join the party or will it bring everything down now ? Just like ES, the daily MTFS is very bullish even if a minor retracement could happen next week. However, in both cases, daily MTFS must now complete its pattern either breaking out on the up side or through the passage of time (i.e. a trading range near current highs).

For the time, and as always, we'll go with the flow...

( posted 6:30 AM UK )

Market update - May 6th '09

The rise of ES has been so far stalled on 905 (i.e. on MM strong resistance level) and some profit taking has now started. However, as mentioned previously, there is no some buying momentum so retracement will be limited.
Note again for trigger-happy traders, there is no red bar yet on our 60min chart.

Our tick charts (up to 64000T) have turned short already but also show a limited retracement only.
The day before yesterday prices jumped to the top of this [875-906] segment and could now find support either half way around 890, maybe back to 875-880 where support will be a lot stronger.

( posted 6:15 AM UK )

Market update - May 5th '09

I have to admit that i anticipated a retracement on 875 which never happened. I also mentioned the possibility of a breakout yesterday and we got it indeed with prices jumping right up to the top of the next segment or band. ES indeed reached 905 i.e. 30 points above the previous resistance, and only 1 point to the new strong resistance level.
The daily chart looks bullish still so any forthcoming retracement will be limited, maybe to test 875 as a support level now.
It looks like we're on our way to 1000.

The situation is similar on ER (now TF), without however any price jump. 500 still holds even if penetrated, which is understandable as the level is stronger on all time frames.
Like ES, we may see 500 being passed then tested as support.

( posted 6:20 AM UK )

Weekly Report on ES & TF - May 4th to 8th '09

We've had a shorter week last week even though trading volume was sustained on Friday, and as we anticipated, we have a bit of indecision and synchronization going on with indices now sort of realigning on their respective resistance levels.

The top question today is "Shall we now see those key levels being broken or not ?" ES is still quite bullish and the slower MTFS green line is now slowly joining the party. The chances of trend reversal are now quite reduced and a breakout is even possible. Again one should always go with the flow even if we an action plan in mind. Therefore, we have to assume that a breakout is possible opening the way to the 1000 level. We do need at least a red bar on the daily chart to bring up the retracement scenario that has been discussed for a week at least.

On the 60 mins chart, we do notice a trendline linkng channel lows hence some selling could start if ES breaks 865. Buying pressure however still looks like a dominant force.

On the daily chart, retracement levels once confirmed will be 800, 775, then 750. Nice round numbers, but nothing more than potential targets until a retracement starts showing.


ER has now caught up wiyh ES and hit 500. This level looks a lot stronger than the equivalent 875 on ES, so will this trigger the expected sell-off ? Difficult to say now but we should have an answer by mid week. In case of profit taking, a target around 440 to 445 is likely, but nothing more as MTFS is now relatively bullish.

I'm afraid i haven't here given a clear answer to the "top question" above, but my reading of the market is to prepare for both a likely retracement and a less likely breakout, even if the breakout would be a normal continuation of the current market configuration.

( posted Sunday Morning UK )

PS: Commented chart available here

Market update - May 1st '09

875 has been briefly penetrated yesterday on account of some lag between indices (ER was a little behind ES). Now that ER has finally also hit its resistance level, we can maybe hope we've reached the decision point we've been waiting for.

Unfortunately, the buying pressure has built up on the daily chart so a breakout is now possible even if we still stick to our retracement scenario. Markets could be rangy and choppy.

In the short term, yesterday's low on ES is our key level for retracement, which should be limited initially. Trading should be slow today on account of the public holiday, so we'll review this scenario early next week.

( posted 7:30 AM UK )

Market update - Apr 30th '09

Again, it is clear that one must always guard against reading between the bars (pardon the pun). We knew there was a possibility of reaching strong resistance level first, which often acts as a (strange) attractor.

ES has therefore clearly hit 875 (at least this is done now), and... we might have to wait a little longer to finally exhaust buyers enthusiasm. ES should indeed hover in this price area for a while, unless market participants decide to massively take profits ahead of the long weekend (unlikely though).

Once selling has started, we'll follow Fib/MM for targets (unchanged from previous reports).

ER (aka TF) is slightly out of sync as it is still running to catch up with its own 500 target. The pattern formation is however exactly the same.

( posted 7:10 AM UK )

Market update - Apr 28th '09

ES remains quite resilient at these levels, even though a "air hole" could perturb this configuration anytime. On the 60mins chart, ES bounced on a first Fib target on 850 which is usually fairly weak. Again, we would favour a drifting or profit-taking scenario but in order to avoid putting the ox before the cart (common mistake i also do) one should wait for the daily chart to show a least a red bar (the weekly chart is also indicating a peak).
Should selling start picking up speed, we see the next target in the 840 to 843 area.

The situation on ER (TF) is similar, and maybe clearer too. We are in a trading range made of price segments which are more or less 7 or 8 points wide. ER needs to break 468 (range mid point) then 461 etc.
The daily chart is also quite resilient, to the point that we can't discard a scenario whereby ER would manage to pass this stall level to give a go at the almighty 500 level. Here again, the "air hole" episode is quite probable so we are waiting for a red bar, and a breaking of the trading range on the 60mins chart first.

( poste 6:50 AM UK )

Market update - Apr 28th '09

ES stalled on ... MM Stall level (867.25). Quite prdeictable of course. ES then spent the day drifting to the 850 price level which is the 1st Fib target.

We know that while quite resilient, gravity should prevail so ES should test prices near MM Pivot and the next Fib target i.e. around 840 to 845.

Buyers will then have to be 'exhausted' on the 830-835 area to possibly permit a clearer picture. I however believe there will be barriers near 820 and 812, which if/when broken will open the way to our Fib target (797 then 766).


Same picture on ER (TF). In the short term, we need to see 460 broken. One might first see 468 being passed then tested as a resistance level. ER is just as resilient but maybe just need a bit of a shove to retrace more clearly.

Note however that reversal potential decreases over time, so there is very little chance to see more than a retracement for a Fib target around 410 to 414.

( posted 6:40 AM UK )

Weekly Report on ES & TF - Apr 27th to May 1st '09

Last week has been a little frustrating with pivot indications announcing the end of the bull run (since early March). The too obvious 875 resistance level has been almost hit twice and buyers may just give up anytime.

ES 60mins
This MM Stall level on 867 coincided exactly with a Fib pattern which justifies profit taking. Having said that, the ESM09 tick chart (1597T) shows a 2% FALL, hence we have to be VERY CAUTIOUS here. Check Fib retracement levels (851, 845, 840) for reversal.

ES Daily
The 2% early morning morning fall (Mon 27th) is in fact in line with our scenario even if spikes and high frequency moves in general are difficult to capture.
We here see a confirmation of our former outlook (last week's reports) for a return to the high 790s. We cannot however discard prices to remain first constrained in a range for a while with a lower boundary in the [820-830] area.
While this is way too early, one can already see a target on 766 (2 Fib patterns).

Weekly
A provisional pivot is now showing, thus giving more credit to our scenario on lower time frames. We've been repeating over and over that the bounce from early March lows would be subject at the very least to some profit taking.
We'll now wait for this pivot to be confirmed first to validate our targets (797, then 766).

ER (TF) follows the exact same configuration.
468 is a short term test level. Reversal will be confirmedn if it is broken then tested as a resistance level. Profit taking has been long overdue, but again we don't anticipate recent lows (early March) to be tested again.

Market update - Apr 24th '09

Not much to say about ES today really...
Intraday traders can have some fun on tick charts, but the 60mins chart is congested in a trading range, and the Daily chart is holding well although the 'air hole' could happen anytime. Check 843 as an intermediate support, which if broken would make the market move to the price segment below (828 - 843).

Same picture on ER (TF), which again looks quite resilient still.

We'll review our scenario quietly over the weekend as we don't anticipate the markets to collapse today.

( posted 7 AM UK )