Tuesday, October 21, 2008

Preparing for battle...

A good day yesterday with more investors jumping in in shorter time frames to make sure they don't miss the train. Long time frames still show uncertainty and fear and it is true that we're not out of the woods yet. Volatility can still make us sweat a little going forward...

EURUSD: as said before, we've left the [1.354 -1.3672] range to settle lower and [1.33-1.3328] is where it could happen. No recovery potential here for the time being though. We have to wait for the current drifting down to stop first.

ER: Could reach 560, but indicators are not very convincing. We don't see any reason to rush into the market using long term scenarios. It is probably easier to swing trade using shorter intraday time frames, or wait a little using daily/weekly charts.

ES: We can see a bit of angst ahead of the 1000 key level, but current resistance level inches away from the much anticipated 1000 is also a strong technical level on short tick/volume charts, where action actually is. For now bounce level can be 984, or 8 or 16 points lower. 969 is now a very strong support level and it is clear ES needs a stronger base to prepare for the "final batte" ... :) It is only when 1000 is attacked that we will see more energy being released in the market.
A caveat though: volatility is still very strong so one may just as well hit 1000 first on a positive news then retrace, bounce etc

Watching short time frames is again most recommended.