Thursday, October 09, 2008

Oh well, just another few hundred billion dollars of market cap evaporated yesterday...

At least the business of printing money is booming... Anyway, no sarcasm and let's just focus on our charts with a caveat first: A support level is a support level, or until it's broken, it's not broken... May sound silly, but many traders read too much in charts, and tend to project their fears on the market. Let's just try and be rational. Again, we'll leave the more fundamental analysis for later.

EURUSD: Yesterday's range was valid, and while we have an upper bias in the short term, we need to confirm 1.3672 as a new support to go higher. It's really ready for it... just waiting for the spark...

ER: The 531 level given 2 days ago is more than valid still even if one should not overlook the enormous downward pressure that is still present in the background. While we can a lot of fun in short time frames, short sellers could maybe tighten their stops a bit. No rush to go long on hourly charts and above.

ES: The equivalent level on ES was just below 970 (see previous posts) and is also holding for now. However, only a clear passing of 1000, then firmly tested for support could announce the end of trouble, and that's certainly not visible yet. The dynamics are otherwise very very similar to ER's.

Should sellers wish to give a last bout before the weekend, we'll look for a bottom in the 500s for ER and 930s for ES. We'll also check for volume to make sure this bear trend is fully exhausted.

(screenshots available on request)