Monday, September 15, 2008

Quick Update - Monday 15th

ER: After the initial shock, ER is now staying in the 705-719 segment, yet, while energy is subsiding, there is still substantial downward pressure. We'll have to watch whether 705 holds. The segment below (support around 690) is a safer bet.

ES: Same story, here with a 1219-1250 segment, and also some remaining downward pressure. Not much of a safety below though, so lows have to hold otherwise...

EURUSD: a retracement to above 1.44 was expected, almost awaited, but it certainly came extremely suddenly. There is still some retracement potential but things are likely to calm down first just above pivot level.

Weekly Outlook ES for Sep 15th to 19th '08

Dominant TF: weekly, with 60mins coming back
Swings: UP-DN-DN (from UP-DN-DN)
Market Direction(daily): short or flat

Please also always read ER2 post below for guidance.

Another week of a fall then a recovery, hard to follow on a daily chart, but OK on a 60mins chart or below.
Again we look at the market in clear segments (see last week's posts) to better understand price jumps.
We're now trying to pass the 1250 level again, a level which has lost its significance now, at least until it is again firmly tested as support. This remains to be seen.

60mins: watch pivot level
Again, maybe repeating myself, we have to wait for a confirmation of prices staying above pivot level. MTFS is relatively bullish, even if Entropy seems to be losing steam already. One may want to study shorter time frames, as well as correlation to bonds and forex. We should know within the first few bars of the day if ES stays above 1250 i.e. evolves within the 1250-1281 segment.

Daily: high volatility, but no major change overall...
significance level has dropped for a while at this TF, so the more conservative will have switched to a higher or sometimes lower TF, or stay on the sideline for a while.
Current recovery still looks quite unconvicing, so its potential may be limited at first. Congestion and a clearer testing of the 1250 level would be needed to take prices higher. We'll remain very cautious in the short term.

Weekly: Congestion to lower for now
Summer recovery is over and failure to pass 1300 will force the market to find a reliable support level. The MTFS crossover right now comes with line gradients indicating that support may be lower than 1250, maybe near recent lows. We'll therefore watch shorter time frames carefully until MTFS and Entropy both look healthier.