Wednesday, September 17, 2008

Mid week market commentary (Wed Sep 17th)

There are many many sites, many trading gurus out there giving you market advices. Most are wrong or evasive, most have inflated egos. Without being overly cynical about it, a market for worthless information exists only because there is demand for it...

Anyway, let's come back to yesterday's post a minute: I gave the 687.5 support level on ER admittedly penetrated to 680 without breaking. I'm not going to explain MM lines again, but it was clear only minutes after the open that the level would hold. The braves even bought ER below the technical support level. After the 1st run, 687 had to be tested again for support etc. ER climbed 2 segments in a day. All in all, a very classic, very very profitable day.

ER: now testing the high end of its price segment with remain upward pressure, yet some profit taking is inevitable today. Again, one can take short term profits and swing play short time frames. It is far too early to confirm we're out of the woods and a return to 703 remains possible if not necessary to climb again later on.

ES: Who could tell you ahead of time prices would reach 1165 and bounce from there. Yesterday's low was 1163 to be exact. Anyway, enough boasting... Similar scenario as for ER maybe only a little more hesitant until lunch time. Same story of a 2 segment price jump, and same caution now as we should not expect a second day runaway. ES needs to consolidate a bit now.

EURUSD: Yesterday's post: "bears will be coming back and play the Euro down to the pivot level again (~1.416). Euro could also get back to recent lows below 1.41" EURUSD indeed hovered above pivot line until lunch time then reached a low of below 1.408. Easy 40 to 50 pips....
Today, we'll stay on short tick charts. Pivot level is indeed losing significance a little, and we may see a bit of congestion or erratic moves on higher time frames until a clear Fib/MM pattern emerges. The underlying downward pressure (daily chart) could make it drift a little more within the next few days but again, shorter time frames will be needed as we can't discard an up move at first.