Thursday, September 18, 2008

What a day !

Again i invite readers to take a look at yesterday's post to realise it was correct... until lunch time! The markets are so wild that we have a very short visibility at the moment.

Let's have a look at the situation for today, taking into account Oct futures and options are on their last breath, meaning we could have some wild swings again.

ER: for the last few days, the salient support levels are 675 and 689 (cf. previous posts). It is ESSENTIAL that 689 holds, otherwise the road will be open to 656, 625 etc. No panic though: while bearish, a support level is likely to be found.

ES: Similar even if more bearish looking (more exposed to financials), ES must also CRUCIALLY hold the 1165 level. The problem here is that there is more indication of ES going further down even if 1165 looks pretty strong. We'll therefore give it a chance today. Next levels are 1100, 1050, 1000... Some doom-sayers look at this market as the double top of the century (2000 and 2007) sending market to the floor eventually... Let's just hope depressives will stay quiet now...

EURUSD: Yesterday's post was correct until lunch time where the Euro gained 3 cents in 1 hr. This is absolutely crazy (other forex pairs also had their wild moves). This retracement to 1.44 could and even should pause for a while (strong resistance level). We'll have a deeper look into it in our weekly report, but it seems that it could remain range bound for a while, or break out to the 1.465 - 1.47 levels in the next hmmm week, 2 weeks? Volatility is so wild that it could happen any time actually.

Safe trading to all,