Wednesday, October 15, 2008

Adrenaline levels at last back to normal...

At last, markets are calming down and behaving as anticipated. We've seen ES looking for support on 1000 and ER retracing also to Fib level 1 around high 540s. On EURUSD, we have a key 1.3672 level which proves difficult to pass so we may see more uncertainty around current levels (i.e. hovering between Fib 1.358 and MM 1.3672 levels). As said before, EURUSD needs a "trigger" to bounce off these lows, so may test the higher range boundary until it breaks out. Check lower time frames for a better picture (we use a 233T, 610T, 1597T set of charts).

ER: can go either way today, but drifting a little lower is likely. On the daily chart, it is obvious that we need to test a stronger level to go higher. We'll watch Fib/MM as in the last resort, ER could need to test as low as 500 to gather more energy.

ES: same story here, ES will probably not hold 1000 and look for a stronger support level while staying above 900.

So, no rejoicing just yet, the worst may be over, but buyers must remain quite selective and look for a better entry point, not so much for the long term, but after losing so much market cap since Aug, one may want to look for bargains a few % lower than current prices.

(snapshots available on request)