Friday, December 19, 2008


What did i say about profit taking zone on EURUSD...? OK, to be honest, volatility still surprises me and i did not anticipate it would retrace to Fib PR1 so quickly. Again and again, high volatility is like time compression, so one just needs to shift time frames and go with the flow...

EURUSD: Our chart seems to indicate some calming down today as with some conflicting forces now brewing. It is difficult to pick a direction for the day, however the oversold situation should push the US$ down. A shorter time frame is recommended. Longer term, the US$ will definitely weaken further.

ER: Yesterday's dip should not have any lasting effect on prices slowly rising to test the almighty 500-520 zone. We do have a slowdown in energy, but this could be understandable hesitation on triple witching day. We expect a clearer picture later on today although volumes could be turn a little lower ahead of the festive season.

ES: Similar scenario at first sight, if only one wouldn't see a more definite exhaustion in the short term. One might therefore test lows near 875 again where one could then possibly gather some strength.

Overall, we see little chance of a rally coming. On the contrary, we might just be heading toward some drifting til the end of the year. More details in the weekly report this weekend.

Good trading to all,

(posted 1AM Eastern)