Tuesday, January 06, 2009

Market update - Jan 6th '09

Yesterday was "back to school - back to reality" and i expected more movement on indices and maybe less on EURUSD.

We do have ER holding just above 500 i.e. between MM and a Fib target, quite overbought, yet we don't know whether it can hover there much longer or is there a airhole coming. Technically, it could hit high 510s before retracing.

ES follows a very similar pattern, i.e. could reach 937 if only energy wasn't getting low. This often happens that apparently obvious targets neverg get hit, and we can find confirmation on our volume charts where 930 is a both a Fib target and a stall level. However, the upper bias is still quite visible there so we shall not rush into conclusion of an imminent retracement.
We also notice again the unusual Daily MTFS with the white line frontrunner. It hasn't reached overbought level yet, but even if we won't probably the well known bell shape MTFS indicating a clear recovery failure, we might see a variation like a double hump with more or less the same results. Again, let's wait & see how this develops.

Now back to EURUSD, where we are seeing the most interesting action. Again, i thought the 1.367 level would hold, maybe because i sometimes read level i can quite believe myself. The daily chart indicates a price stabilization on a close support level but that scenario is battered by the high level of volatility and the 1.33 Fib target is not that far-fetched anymore and on the contrary is now becoming quite realistic. This doesn't change our longer term outlook on the weekly chart. This can be confusing for some, but this is still a counter-trend trade for long term players. Here too, ticks charts provide a pretty good picture.

(posted 6.40 UK - screenshots available on request )