Tuesday, October 14, 2008


Yes, what a mad day again ! Amazing relentless buying spree yesterday... don't tell me now that cash is hard to borrow when one can still shop away with leverage levels which are still quite high. I was told that banks and financial institutions have accumulated a LOT of cash ready to pour back in the markets... Shall we say in a few days and weeks that this storm only occurred to shake the system to eliminate the weak. Now and then the market takes traders and investors to the cleaners, wiping out part of the community. Is this also a Law of Nature? I'll let "market philosophers" ponder on this...

Anyway, the charts for today indicate:

EURUSD: so far easy to follow up, €/$ is testing the 1.3672 level again and could pass it very shortly. However, no chance to see a rally on the daily chart as there is still quite a lot of down pressure. €/$ could hover around current levels, then test the level for support and then only shoot up.
For now, we'll watch the resistance level on shorter time frames as we may have some retracements first, even if the breakout is quite likely. Such breakout would bring short term energy, but no pounding on the $ just yet.

ER: Should i dare give a target for the day... These markets are so crazy. ER will hit Fib level (and minor MM level) very shortly, and could stall there. It could also reach the next one in the 610s. A pause is necessary so we'll take profits soon as a sizeable retracement (cup&handle) is likely some time this week.

ES: Same story. No way we could anticipate yesterday that our 1000 target for the week would be hit in the 1st day... ES is more overbought than ER so retracement may start here, if only to test 1000 for support now. For the time being,the bias is still up so we may just as well exhaust buyers first to the next Fib level. On the longer term, same pattern to expect so a pullback is more than necessary to wipe sellers out of the market.

(snapshots available on request)