Friday, May 29, 2009

Market update - May 29th '09

Would be a good time to go on a long weekend today, as there is very little to add about these markets.

One can just notice a narrowing of the range, indicating a possible breakout either way. The daily chart still points for a retracement as mentioned in previous reports.

Look for breakout immediate targets around 882 on the downside, 920 in the upside, still within our daily range, hence still in the same congestion. Ultimately, retracement is still our favourite scenario.

( posted 6:55 AM UK )

Thursday, May 28, 2009

Market update - May 28th '09

ES finally decided to plunge on the 60mins chart, but nothing to be excited about at least until we've passed daily range lows (strong support in the 875 area).

We might indeed see some continuation of the current hesitation for a little longer. However the daily indicators start showing some exhaustion so we might see the support being tested soon enough. Note that we still have a lower targetin the high 820s.

Once again, TF follows a similar path. Range lows on support level around 468 must be broken before we can aim at the low to mid 440s, then around 300. We do not anticipate more than a moderate retracement for now.

( posted 7:45 AM UK )

Wednesday, May 27, 2009

Market update - May 27th '09

Sorry for yesterday... one of those days...

Anyway, was i right or wrong ? A bit of both. ES indeed hit lows as expected, but i did not pay enough attention to the bounce potential. ES even passed a significant 906 level and could therefore aim back at range higher in the low to mid 920s.

Having said that, this is only "noise" at daily level, and this trading range is kind of directionless, and could eventually break on the way down, as described in previous reports. Our outlook remains a target in the mid 820s upon breaking on the 866-875 level. On the upside, the target would obviously be the almighty 1000.

If we take cues from TF (aka ER), we'll have to check the 500 level carefully. It should hold and send prices down, but we'll remain carefully of a breakout nonetheless.

( posted late 7:40 AM UK )

Tuesday, May 26, 2009

Market update - May 26th '09

Just a quick note today. One should expect slow drifting to last week lows, or to major support as described in previous reports.

More details tomorrow.

( posted late 10 AM UK )

Monday, May 25, 2009

Weekly Report on ES & TF - May 25th to 29th '09

Last week, ES bounced on stall level to reach about Fib PR1. ES now shows little energy either way on the 60 mins chart, which is maybe understandable as markets are closed today on Memorial Day.

The longer term scenario remains unchanged with markets looking at taking profits down to the mid 820s yet not showing more than a marginal profit taking potential at the moment. This can be explained by a relatively strong support level in the 866-875 area.
One cannot exclude a less likely scenario of prices rising to sell more heavily on 906-908.

TF again follows about the same path with a possible landing on 468 on the 60mins chart. The daily chart gives us a lower target in the low 440s, but doesn't show any energy to take us there yet. Breaking 468 would certainly help but we'll assume a trading range for now.

( posted 7:10 AM UK)

NB: the market update will be posted late tomorrow.
Memorial Day today in the US.

Friday, May 22, 2009

Market update - May 22nd '09

Selling took prices almost to the 875 level to bounce late in the day. That level is definitely going to be a test for our target in the mid 820s.

We see ES having difficulties passing the 892/894 levels and some range bound trading is quite possible. Only if 875 is broken, will we then consider the retracement starting. In the meantime, it is recommended to rather stick to lower time frames.

Having said that, we cannot discard 892 (acting as a pivot) breaking to then see movements in the higher part of the price segment i.e. 892 to 906. For the time being, we favour the lower trading range i.e. below 892. Again, a lower time frame is required to pick up movement details.

Same for TF, except price segments are wider percentage-wise.
Check 485 to 489 for pivot.

( posted 7:15 AM UK )

Thursday, May 21, 2009

Market update - May 21st '09

We've had TF showing clearer patterns for quite a while, with the almighty 500 level acting as a "strange attractor" and now triggering some selling. Our target on the 60mins chart is 480, but again, the selling pressure is quite limited on the daily chart so it is difficult to say whether we'll reach the low 440s Fib target there. A period of congestion is more likely.

Let's go back to flagship ES now.
It is started a pretty steady descent with an immediate target on 894 then 890 (tick charts). 892 is actually also a Fib target, so we have a few easy points to pocket there. However we have to realize that while we do have a Fib target nicely laid out for us in the mid 820s, we have no indication of substantial selling pressure to take us there yet.

( posted 7:15 AM UK )

Note: Next Tuesday's report (May 26th) will be posted late.

Wednesday, May 20, 2009

Market update - May 20th '09

ES stayed high yesterday and even spent most of the day a little higher than the 910 level i mentioned to only start drifting in the afternoon.

We should see a continuation of the current movement, probably to 900, then 895.5. Selling pressure is however limited. We have noticed that the 875 resistance level has turned to support level last week. It can technically be tested again opening the way for a more sizeable retracement to the 825 area, but it is only one possible scenario at the moment. Again, there is not enough selling pressure at the moment and buying could resume in the mid to high 890s levels.

Same situation on TF (ER).
Possible target in the low 480s, but selling pressure is simply not there right now. Who knows... It may just take a spark to get the market going though...

( posted 6:20 AM UK )

Tuesday, May 19, 2009

Market update - May 19th '09

Who's now surprised about volatility? The expected bounce on 875 started on 876.75 (certainly not an exact science and even less so on long time frames), to jump right up to the top of the price segment, almost exactly equal to Fib PR2.

Prices should stay in this high part of the range at least in the short term, but again, while we don't anticipate heavy selling, ES should stay in the same price range for now (i.e. below 910).
We may have some congestion or drifting, but it will take some time to reach the 1st Fib retracement target (866), to then possibly validate our scenario for a target in the high 820s. We'll update this scenario as the week goes along. Again, not much of a selling pressure on the daily chart.

TF again follows a very similar pattern and could lead ES on its profit taking path.

( posted 6:40 AM UK )

Monday, May 18, 2009

Weekly Report on ES & TF - May 18th to 22nd '09

ES is retracing in a pretty clean manner with an obvious target around 875. We've had a small bounce on 878 (1st Fib target) on the 60mins chart, but selling pressure is still there. In fact, support could be found a little lower (~867).

On the longer term (daily chart), it seems ES could shed another 50 points for a retracement target around 825. Having said that, we still have no indication of significant selling, and even less of a return to a bearish trend, so we'd better check behaviour on the [866-875] support area.

TF (e-mini Russell 2000) follows a similar path with an immediate target around 468, and seems a little more bearish (reversal indications were also clearer last week). It may reach 444 by the end of the week. Like ES, let's first see what happens on 468 before we confirm that (likely) scenario.

( posted 7:20 AM UK )

Friday, May 15, 2009

Market update - May 15th '09

Hmm, should i just copy/paste yesterday's post... ?

ES bounced on stall level, in fact bounced exactly on Fib target inches below stall level (882). We would always favour days like these but one can't see more than some drifting down, or some trading range in the short term.
ES needs to go test 875 (possibly penetrated to the high 860s) to confirm the new Fib pattern on the daily chart.

ER looks the same, with a logical target near lows on the 60mins chart, and yet only limited selling pressure after a down week so far. Could be directionless day here too, even if drifting should continue next week.

( posted 6 AM UK )

Thursday, May 14, 2009

Market update - May 14th '09

I've been saying all along that the retracement would be somewhat limited, but how limited ? Buying pressure was strong enough until to justify prices staying above 875, close to a generally weak Fib level (~866). Now it seems obvious that 875 will be hit (Fib target was 878 on the 60mins chart), and while such level certainly looks like a reasonable landing zone on the 60mins chart, selling pressure has picked up some momentum on the daily chart. So, one might have a bit of fighting in the current price area, to eventually drop another price segment (still about 31 points wide) maybe tomorrow, or some time next week.

You will notice that ER (TF) gave us the actual retracement signal better than ES itself. It is therefore recommended once again to follow the behaviour or mood of both indices (€/$ is also interesting). TF also indicates a "landing zone" around 468, and could also go lower after testing that support for a while.

( posted 7:10 AM UK )

Wednesday, May 13, 2009

Market update - May 13th '09

Nice bounce on the 60mins stall level, typical of a fast move all the way from strong resistance level around 922.
One could have anticipated it to be stopped around 906 (MM+Fib) but volatility was strong enough to take it to the next Fib level. Will it even reach 915 now?

906 is a pivot level, i.e. prices can bounce on that level at least momentarily, but the drifting down should then resume anyhow.

We can also take 500 as a reference price on TF. If not broken, selling should pick up speed (see channel forming on 60mins chart)

( posted 7 AM UK )

Reference on MM:

Tuesday, May 12, 2009

Market update - May 12th '09

Selling started yesterday, and those who switched to lower times frames have certainly scored on a fairly clean down swing. MTFS is also joigning the party on the 60mins chart and we notice that the strong resistance level has dropped to 922, indicating a forthcoming trading range with a support level in the 890 area. Again a significant retracement is not visible yet.

Note however that the the Daily MTFS is also tilting, so we'll watch for a possible lower support level (end of week or next week).

The 500 level on the ER (TF) has been an everyday reminder that the broader market has been ready to retrace for about a week. It is obviously always difficult which market will pull the other one even if 500 certainly looks stronger on ER than the equivalent resistance level on ES. Let's however NOT jump to conclusions: the daily bar is STILL blue, so funny enough, resistance is stronger AND retracement potential more limited.

Today, we'll watch 906 as a key level on ES, which could send prices somewhat lower.

( posted 7:15 AM UK )

Monday, May 11, 2009

Weekly Report on ES & TF - May 11th to 15th '09

Markets have been marching ahead last week, ES leaving the 875 level behind. It seems like this bull run finds no major resistance, but are we really going straight to 1000 now ?

On the 60 mins chart, we'll watch 930 (stall level) and 937 (new resistance level). ES actually hit 927.75 and a provisional pivot is already showing. It is recommended to trade those waves on a slightly lower time frame.

The daily chart is staying strong, minimizing the impact of volatility on the 60mins chart, hence while we do see energy exhaustion at this level, the MTFS pattern points higher. We have to acknowledge however that the MM levels haven't budged yet, i.e. strong resistance level has not moved to 1000. If we add that a pivot is also showing on last high, shall we see the expected retracement at last.
As always, we'll wait for a red bar, and since MTFS is so bullish, profit taking isn't likely to bring prices lower than the 16 or 31% Fib levels.

The weekly chart is also showing a provisional pivot.
Again, we do not anticipate a change in the dominant trend.

The situation is exactly the same on ER (TF), with however significantly more hesitation on current levels, and here again some profit taking would provide some order in this chaotic environment.

( posted Monday 11th 7AM UK )

Friday, May 08, 2009

Market update - May 8th '09

ES reached 927 yesterday, i.e. close to the 830 stall level to then retrace a bit. Will that be the signal to take profits ? Again the daily chart does not give indication of any serious selling yet. A short term return to 875 is possible some time next week but it is not visible yet.

Today, we'll watch possible resistance levels on 918 and 922 but again, no reading "between the bars". Bars are still blue on all time frames.

ER (TF) is different though as again the 500 level is certainly still holding, so caution MUST be exercised.

More details in our next weekly report.

( posted 7 AM UK )

Thursday, May 07, 2009

Market update - May 7th '09

ES is following its course north now with a target around 930 (60mins chart) or higher (daily chart). Obviously there will be minor profit taking sessions along the way, and 906 could be a support level now.
Funny enough, the current rise looks like a gentle walk in the park with actually little underlying energy. We should therefore just enjoy the ride while it's there...

ER (TF) follows a more difficult course as it has not broken 500 yet. Will it join the party or will it bring everything down now ? Just like ES, the daily MTFS is very bullish even if a minor retracement could happen next week. However, in both cases, daily MTFS must now complete its pattern either breaking out on the up side or through the passage of time (i.e. a trading range near current highs).

For the time, and as always, we'll go with the flow...

( posted 6:30 AM UK )

Wednesday, May 06, 2009

Market update - May 6th '09

The rise of ES has been so far stalled on 905 (i.e. on MM strong resistance level) and some profit taking has now started. However, as mentioned previously, there is no some buying momentum so retracement will be limited.
Note again for trigger-happy traders, there is no red bar yet on our 60min chart.

Our tick charts (up to 64000T) have turned short already but also show a limited retracement only.
The day before yesterday prices jumped to the top of this [875-906] segment and could now find support either half way around 890, maybe back to 875-880 where support will be a lot stronger.

( posted 6:15 AM UK )

Tuesday, May 05, 2009

Market update - May 5th '09

I have to admit that i anticipated a retracement on 875 which never happened. I also mentioned the possibility of a breakout yesterday and we got it indeed with prices jumping right up to the top of the next segment or band. ES indeed reached 905 i.e. 30 points above the previous resistance, and only 1 point to the new strong resistance level.
The daily chart looks bullish still so any forthcoming retracement will be limited, maybe to test 875 as a support level now.
It looks like we're on our way to 1000.

The situation is similar on ER (now TF), without however any price jump. 500 still holds even if penetrated, which is understandable as the level is stronger on all time frames.
Like ES, we may see 500 being passed then tested as support.

( posted 6:20 AM UK )

Sunday, May 03, 2009

Weekly Report on ES & TF - May 4th to 8th '09

We've had a shorter week last week even though trading volume was sustained on Friday, and as we anticipated, we have a bit of indecision and synchronization going on with indices now sort of realigning on their respective resistance levels.

The top question today is "Shall we now see those key levels being broken or not ?" ES is still quite bullish and the slower MTFS green line is now slowly joining the party. The chances of trend reversal are now quite reduced and a breakout is even possible. Again one should always go with the flow even if we an action plan in mind. Therefore, we have to assume that a breakout is possible opening the way to the 1000 level. We do need at least a red bar on the daily chart to bring up the retracement scenario that has been discussed for a week at least.

On the 60 mins chart, we do notice a trendline linkng channel lows hence some selling could start if ES breaks 865. Buying pressure however still looks like a dominant force.

On the daily chart, retracement levels once confirmed will be 800, 775, then 750. Nice round numbers, but nothing more than potential targets until a retracement starts showing.

ER has now caught up wiyh ES and hit 500. This level looks a lot stronger than the equivalent 875 on ES, so will this trigger the expected sell-off ? Difficult to say now but we should have an answer by mid week. In case of profit taking, a target around 440 to 445 is likely, but nothing more as MTFS is now relatively bullish.

I'm afraid i haven't here given a clear answer to the "top question" above, but my reading of the market is to prepare for both a likely retracement and a less likely breakout, even if the breakout would be a normal continuation of the current market configuration.

( posted Sunday Morning UK )

PS: Commented chart available here

Friday, May 01, 2009

Market update - May 1st '09

875 has been briefly penetrated yesterday on account of some lag between indices (ER was a little behind ES). Now that ER has finally also hit its resistance level, we can maybe hope we've reached the decision point we've been waiting for.

Unfortunately, the buying pressure has built up on the daily chart so a breakout is now possible even if we still stick to our retracement scenario. Markets could be rangy and choppy.

In the short term, yesterday's low on ES is our key level for retracement, which should be limited initially. Trading should be slow today on account of the public holiday, so we'll review this scenario early next week.

( posted 7:30 AM UK )