Friday, July 31, 2009

Market Update - Jul 31st '09

The market stopped a little short again with some profit taking on 994. Selling actually started on the TF resistance level (hence always a good reason to watch several correlated instruments). ES a Fib target on 996, and the so much expected 1000 level.

At the bottom of the current trading range, 984 seems to be a strong support level at the moment, so we should see more hesitation today ahead of key target levels, and possibly adjust positions accordingly. It is not possible to anticipate any significant retracement with any accuracy right now.
On the downside, we'll watch for a breakout of the 984 level (next strong support level is in the high 960s). We however do favour continuation of the current trading range ([984-1000] for the time being.

( posted 7:30 AM UK )

Thursday, July 30, 2009

Market Update - Jul 30th '09

We've seen the market pausing and even resting a bit on the 968 level yesterday. It is now going to test 984 again but while 1000 is now really just a stone's throw away, we have increasing indications of a market stall. Note however that we cannot evaluate how far our leading indicators are looking so the market may still try and hit 1000 before stalling and maybe retracing. The overall picture remains quite bullish at the moment.

TF is also on a strong resistance (next target would be in the 600 area). Such breakout would equate to another jump of nearly 10%, which is possible but unlikely at the moment.

( posted 7:25 AM UK )

Wednesday, July 29, 2009

Market Update - Jul 29th '09

We indeed saw the market stalling yesterday as expected. Good timing to possibly lighten positions or tighten stops, but residual buying pressure is stull strong ... and 1000 is so close.

Light summer volumes may indeed accentuate volatility both ways, without any definite change of scenario i.e. a bullish stall. In the short term, we'll check 968 for support, and 956 in the very worst case. We're likely to go and hit 984 and maybe 1000 first.

TF has pushed the 546 level to strong resistance level, icreasing the likelyhood of some (limited) profit taking. The stall scenario should be valid maybe for a day or two.

( posted 7:40 AM UK)

Tuesday, July 28, 2009

Market Update - Jul 28th '09

ES seems to be rising relentlessly to 1000, but we have to see how it will behave now that it has reached the Fib/MM resistance area (i.e. 979-984). Again we have preliminary signs of a peak (Entropy and MTFS) so money management can be adjusted accordingly.

Note that there is obviously no indication of reversal whatsoever, so the peak will first be a market stall at best.

TF is following the exact same path.

( posted 8 AM UK)

Saturday, July 25, 2009

Weekly Report - Jul 27th to Aug 1st '09

ES has reached a resistance area (977 to 984) yet is still so bullish that one almost couldn't see it stopping before hitting the "Almighty 1000". Technically speaking, the 1000 level is also a collection of several Fib and MM levels hence we should consider it more like a battlefield than a demarcation line.

ES could actually slow down and even retrace a little still ahead of the major target. Well, we have a few advanced indicators like MTFS and Entropy, but like last week, we have to see them peaking first, so it may take a day or two to materialize. Note that 30mins time frames and lower do respond better at the moment.

TF has almost surprisingly reached the same Fib target (547) at the exact same time. Dynamics are virtually identical, and we can here therefore anticipate the next target (Fib + MM) in the 600 area, which would translate into the higher part of the target range for ES i.e. more around 1040 (2nd Fib target). Again, MTFS and Entropy here too announce a pause and a possible limited retracement, hence those targets should be reached in waves over a week or two. It remains difficult to anticipate that trajectory with any sort of accuracy with volumes likely to drop as we approach the month of August.

( posted Sat 1:30 PM UK )

Note that i might skip a report or two next week, unless the market really surprises us enough to warrant an update of this scenario. EURUSD may actually be a lot more interesting to monitor, the being question mark being if/when it will take off to its next target around 1.465

Friday, July 24, 2009

Market Update - Jul 24th '09

We finally see a possible pause in this apparently relentless rise to 1000 level. We have a Fib target around 978 and a stall level at 984 which together explain the limited profit taking we've seen late in the day.
One should not indeed any reversal nor even any significant retracement today. Hesitation has so far favoured buyers and in absence of any major news, one could see some residual momentum and therefore see ES stay pretty high.
MTFS and Entropy are starting to show some weakness though, so it would be worth monitoring the market behaviour in realtime.

ER has caught up with ES to an extent, and show still a little more resilience. Here too, while profit taking seems a logical step now, we have to remain careful and try not to read too much into our charts. Reversal should occur pretty soon, but it probably won't be possible to pick it up on this daily report. Slower time frames will be necessary. Note however that it may happen today, monday, who knows...

More details on the weekly report tomorrow.

( posted 7:50 AM UK )

Wednesday, July 22, 2009

Market Update - Jul 23rd '09

Difficult to find something new and interesting about yesterday's trading... The market has been hesitant on key target without engaging in any sort of retracement. The daily chart is still quite bullish, only marginally dissipating energy accumulated over the last two weeks. ES should therefore stay quite high in the 940s, and only then shall we maybe see Entropy peaking. Entropy level is high in reversal territory but it would take at least a few days to evacuate the current bullishness.

TF, just like ES, is hovering around range highs and could go both ways from here. We'll remain careful around this key levels, taking into consideration that chances of retracement are very limited.

( posted Wed 11 PM UK )

Market Update - Jul 22nd '09

We've seen ES hitting 953 twice yesterday. Will it now breakout higher ? It seems quite likely indeed as a number of market participants have their eyes on 1000 already.
Having said that, we have to remain cautious on this level still.

TF also hit its target on 530 and is also quit bullish still.

We cannot discard some profit taking today without revising our market outlook. We indeed have to keep in mind that a summerly trading range is also quite possible. Behaviour on this key level (weekly trading range highs) will have to be monitored closely.

A special note on EURUSD: aggressive traders may want to go short already, but that's probably way too early at these time frames. Just watch out for a pivot point for the time being, keeping in mind that current target may just as well be broken to reach Dec '08 highs again...
(Both € and US$ economic blocks run such massive amounts of debt...)

( posted 7:40 AM UK )

Tuesday, July 21, 2009

Market Update - Jul 21st '09

ES is now close to its target, but again remains quite bullish hence could at best stall at these levels. The swing angle on the daily chart looks a little too steep to fly straught to the almighty 1000, so that battle may have to wait and some profit taking on these range highs is more than likely.
Same situation for TF, lagging slightly behind though. One could assume it could also reach the top of its trading range around 530.
We can also note that both ES and TF could end this period of congestion if both weekly bars turn blue on Friday, probably then indicating aiming higher. Again, while buying pressure remains substantial, we are likely to see some profit taking and therefore continuation of the trading range. In the short term, let's check for the market behaviour on range highs. Any forthcoming retracement would be quite limited.

( posted 7 AM UK )

Saturday, July 18, 2009

Weekly Report - Jul 20th to 24th '09

Difficult to explain what happened last week... Was it motivated by some blue chips quartlerly results, options expiry on lower summer volumes. Who knows... Anyway, ES reached its strong resistance level on both 60mins and daily charts, and remains quite bullish still. It could possibly try to go a little higher (low 950s ?), but this is a good reversal area, so we'll be cautious and watch out for the next pivot.

The size of this upward retracement certainly exceeded our expectations, but one should always go with the flow. The market is always right after all. The weekly chart hasn't budged despite this last up bar looking like a spike. Swing is still down and the bar is still yellow, hence the trend is still valid for now until the latest highs are broken (HA Alert is right on that level).

TF (a.k.a. ER) has a little more residual bullishness and shows a upward provisional pivot alread and a HA_Alert very very close to this week's highs.

We should therefore watch out for the same breakout potential as for ES. It would be risky to try and read more "between the bars" as volume is likely to go lighter and lighter for the next 4 weeks now.

( posted Saturday 18th 7:30 AM UK )

Friday, July 17, 2009

Market Update - Jul 17th '09

How are we going to end this bullish week ? ES reached the strong resistance level in the high 930s and is still pulled higher on the daily chart. The resistance is however quite strong, and could hold this time around. Tick charts even seem to indicate a potential reversal if 930 breaks on the down side. Prices should remain quite high, i.e. hovering around the 930s unless volatility is exacerbated by lower volumes on a typical summerly Friday afternoon.

TF is slightly behind ES (reached stall level on 523 while ES already hit its strong resistance level at 937.5). It follows the same dynamics and the same resilience, so the overall possibility of a significant reversal is rather meek.

( posted 7:30 AM UK )

Thursday, July 16, 2009

Market Update - Jul 16th '09

Merkets behaved as planned yesterday with ES reaching 930 (target with high 920s...) only to retrace on stall level. Obviously as mentioned in the past, volatility as a time compression agent, hence we did not expect the target to be hit so quickly.

Prices should keep on hovering around current levels, possibly reaching the top resistance level since buying pressure is still there on the daily chart. The 60mins chart though is however announcing a pause without any substantial retracement for now. EntBin is quite high though so we'll watch the MTFS behaviour closely, particularly when the green line stops pushing. This would trigger a return to the 906 level.

Same situation for TF which is massively overbought, (MTFS is stuck on its ceiling values). It could also return to 500 later on following ES leadership. At this time of the year, trading volumes are lighter and quarterly results of blue chips and other market leaders can rapidly move major indices.

( posted 5:50 AM UK )

Wednesday, July 15, 2009

Market Update - Jul 15th '09

Pretty cheerful Bastille Day yesterday with prices rising to key level as anticipated. While overbought, Es should stay relatively high and maybe creep higher still. One cannot discard a return to stall level in the high 920 before the end of the week.

Does that change our mid term scenario ? Well, we're still in a channel for now, so this last few up days are part of normal trading activity, and again, 875 may have been the current bottom we've been looking for. There should be more selling down the line, so we may have range bound bound markets, which are music to the ear of income traders with condor positions.

We can notice a return to the 500 level on T. Like ES, and despite a short term bullishness, TF could reverse or stay range bound for a while. Here too, income traders can take advantage of price segments (16 or 32 points wide), separated by the 500 key level.

( posted 7:30 AM UK )

Tuesday, July 14, 2009

Market Update - Jul 14th '09

What did i say yesterday ... ? One must always be careful on salient levels like this 875 area on ES. One could have thought the upward retracement would be limited to the high 880s (Fib + MM) but ES actually found enough energy to reach the 50% retracement level, and could in fact even test the PR2 level (61.2%) close to MM pivot around 906. The daily chart seems to confirm more bullish potential indeed, even though this is only part of a normal cycle.

We've been repeating over and over since the beginning of this June pivot that retracement would be limited. We now see this bounce on 875 (16% retracement + MM pivot) as the potential base mentioned in previous reports. Again reading charts on key levels is difficult, and this is only a bounce at the moment. Selling pressure is still there and options traders with call spreads above 950 are pretty safe. Going forward, we may indeed see a trading range, or more testing of the key level. Equilibrium price is probably lower, but selling pressure also tends to dissipate over time, particularly during slower summer months.

( posted 7 AM UK )

Saturday, July 11, 2009

Weekly Report - Jul 13th to 17th '09

After some substantial selling, the week actually ended on a softer note on account of low volumes. ES and TF are still holding on their key support levels respectively 875 and 468.

We are likely to see more selling next week although a bounce is also possible first (depending on ES bahaviour on 875 again). We have indeed the MTFS clearly on a bear pattern but the white line has been striding rapidly ahead and could therefore reverse in the next few days (check reversal of the white line in oversold territory). It is in any case difficult to have a very definite scenario ready when prices are sitting right on key support levels. The longer term chart still point for a lower support (~840 on ES, ~460 for TF) which area again could form a good base to move higher then (i.e. no panic yet over the long term).

( posted Sat 11th 8:30 AM UK )

Friday, July 10, 2009

Market Update - Jul 10th '09

ES is sitting on 875 now from where it could try and bounce. However while this key level is obviously quite strong, higher time frames still point towards drifting lower to the bottom of the trading range (859, then 840 on the weekly chart). As always, let's wait for the level to be broken first.

As mentioned yesterday, TF should also aim lower towards the bottom of the trading range in the 460s.

( posted 6:45 AM UK )

Thursday, July 09, 2009

Market Update - Jul 9th '09

Again, markets seem to behave in a fairly orderly manner. On the ES chart, the 875 level shows some resilience still and is so oversold that a moderate bounce is possible.
We still keep our lower target for now, in the 860 area, then maybe 840. As mentioned many times in previous reports, this is not a trend reversal but only a normal pause after the extraordinary recovery since March.

TF came close to the 469 support level yesterday where it bounced temporarily. Like ES we aim for a lower target now. Our support level should be hit within a few days, but low volumes can cause normal seasonal volatility.

( posted 7:15 AM UK )

Wednesday, July 08, 2009

Market Update - Jul 8th '09

Always good to see the market behaving as anticipated. We've seen the 883 level holding for a while, to now test a stronger support level at 875. The thing is that we have some indication of further selling, so while this test area should hold the selling pressure in the short term, we'll keep an eye on a lower Fib targets on the daily and weekly charts. Likewise, if/once 484 is broken, TF could shed 4 to 5% to reach the low to mid 460s later on this week.

( posted 5:50 AM UK )

Tuesday, July 07, 2009

Market Update - Jul 7th '09

After hitting top stall level near 930 a few days ago, ES fell to the bottom stall level yesterday (883), thus confirming range trading on the daily chart (cf. weekly report below).

ES could potentially rise to 900 (Fib level). However the daily chart is still drifting so ES should remain in the bottom part of the trading range, and one can envisage 875 (May lows) being tested later on this week.

TF also bounced bounced on a salient level, and shows the same "failed recovery" crossover on the 60mins chart, hence while it can aim back termporarily to the high 490s, TF should also resume its drifting down. Again, a likely target could be in the 460-470 area where it could gather strength to aim back to higher levels (600-625) later on (September ?)

( posted 6:50 AM UK )

Sunday, July 05, 2009

Weekly Report - Jul 6th to 10th '09

So, we've had the long awaited retracement last week, so far limited to one price segment on ES (921 -> 906 -> 891), still roughly 15 points apart. While it should later on go lower, we are still in the same trading range on the daily chart, and selling pressure remains relatively limited on higher time frames.
Breaking 875 which would mean falling another price segment would definitely confirm the retracement we announced a long time ago. Now to be honest, we tend to often ignore the minor 23.6% Fib retracement level which sits on 883 on the weekly chart. So, considering the fairly weak selling pressure, the level may be valid and after a period of trading range on the daily chart, prices could eventually rise again.
To be on the safe side, traders who aren't short or delta negative, may want to enter in a breakout both ways, possibly even reducing the spread between entry levels or even try a short butterfly.

TF is still hovering on the 500 key level (Fib support : ~498 on the 60mins chart). Despite a possible short term bounce, that level needs to be broken still. We've noticed here also a narrowing of the trading range, and also a typical breakout environment, potentially exacerbated by lower volumes going forward.

So, to summarize, let's keep an eye on our key levels, watch a possible bounce early in the day (after the long weekend) and watch carefully the trading ranges given by our price segments. We still favour more retracement even if selling pressure is not as strong as we would like to get over and done with this selling phase. We would then at last see the market then move on and resume its course north, eventually attacking the almighty 1000 level.

( posted Sunday 7:30 AM UK )

Friday, July 03, 2009

Market Update - Jul 3rd '09

Aaaaaah ... At last! We finally got our reversal point. The market reacted on a bad unemployment report at a time when it was already prone to retrace thereby exacerbating its effect.

ES is now aiming at a lower target still, either on 886 (Fib Expansion), or stall (882). We're now at last testing important levels where the market will have to chose between bouncing on the 875 area or retace fully to 840 or lower. We should be able to have an answer within a few days (more details on the weekly report).

ER is following the same path, with a possible pause here in the high 490s (Fib level), but probably aiming lower later on.

Let's note however that it is too early to announce a major retracement. There is a lot of residual energy in the market, and the 875 to 882 area will be the true test. We cannot discard the possibility of the market stabilizing just 1 price segment down, range trading between current lows and 906.

( posted 8:15 AM UK )

Thursday, July 02, 2009

Market Update - Jul 2nd '09

ES jumped to almost reach stall level yesterday, reaching about Fib PR2 (61.8% retracement on the daily chart) and only has some residual energy to go higher. It could however creep higher to the top of the trading at the stall level again or even the strong resistance level on the mid 930s. A more likely scenario in the short term is a period of hesitation in the low to mid 910s though. In case of some acceleration of selling, we do notice a Fib target just above 900. However we have no clear pattern yet which could indicate the sizeable retracement we've announced for a while. (Will it ever happen ?)

TF shows a very minor pause or retracement to come on the 60mins chart, but remains more resilient overall. It could well try and hit 520 again by the end of the week. On the longer term, just as ES, TF shows a provisional pivot on the weekly chart with a very high entropy, which should indicate a reversal, but it may be a long way away still, and probably on current highs, if not higher.

( posted 7 AM UK )

Wednesday, July 01, 2009

Market Update - Jul 1st '09

New day, new month, new quarter...

Anyway, ES broke its upward channel yesterday (60mins chart), and could now be drifting a bit, pretty much directionless at that level yet pushed up on the daily chart. We're again waiting patiently for a confirmation of the reversal on the weekly chart.

For the time being, it seems the 906 area represents a strong support level at the moment, and the daily chart points toward a return to the top of the trading range, so we'll check 921, then 937 (price segments are about 16 or 32 points wide).

Same situation again for TF with a potential return to 512 then 520, yet we're looking at an erosion later on, which does not facilitate our market reading as the pivot or reversal will look a little fuzzy at first.

( posted 9 AM UK )