Sunday, January 25, 2009

Weekly Report on ES - Jan 26th to Jan 30th '09

Again it is almost pointless commenting ES this week as patterns are VERY similar if not identical to ER's (see report and snapshot below). We shall therefore only mention specific key levels here.

NB: it is again recommended to swap the 60mins chart for a 32000V chart.

ES 60mins: ES seems like glued to the [812-822] range. The lower range boundary is however a very strong support, so shall we see this target as a jumping board ?

ES Daily: While MTFS seems to show a possibility of "landing" in oversold territory it is too early to say so we'll remain cautious that we may just as well crash to last year's lows (~722) if this 812 level doesn't hold. Let's just be cautious and not panic. There are early signs that this price area could well be our bottom where ES could climb back. I'm afraid we'll have to wait a little longer to see which scenario will prevail. I'll personally favour the bullish one (Swing has toggled UP after all).

ES Weekly: Same weak or 'failed' recovery pattern as explained on previous reports. Those who chose to go long on an aggressive limit order must have been filled and a stop near or below last year's lows is in order. At the same time there may be no rush to enter long as ES may find it hard to take off in the short term and as mentioned above can come all the way down to test lows again...

Weekly Report on ER - Jan 26th to Jan 30th '09

Dominant TF: 60mins picking up
Swings: DN-DN-UP
Market Direction(daily): looking for a long entry point

Last week Monday, i warned about lower visibility, and this is often the case on key levels where bulls and bear fight on and on... Secondly, one can notice 2 levels 437 and 423 which should technically be apart but are somewhat combined in this high volatility environment. Should we still be bearish? Not necessarily and the aggressive limit long entry mentioned last week may still be valid. To remain cautious, a short stop order on breakout would be also recommended, unless one decides to hold on a bit until we have better visibility on this key levels.

As usual let's first start with the outlook on EURUSD:

EURUSD: The 60mins chart is short term bullish yet needs to bounce on 1.294 to go higher again. It is not yet clear whether it will have enough energy to pass 1.305 anyway. This shows how volatile it is likely to be in the short term. The daily chart is still bearish even if we are clearly approaching landing zone. Shall we hit 1.243 ? That remains the main question for this coming week. We shall probably see some congestion over the next few days, hence if we are still short, stops should be tightened, if flat, one can stay on the sideline or trade tick charts. Key levels there are again 1.294, then 1.288 then 1.282 which we need to see broken to validate our scenario to 1.243 ...

Now back to ER:

ER 60mins: 437 seems rock solid so ER could certainly bounce there even if this is no way visible yet. We already had a bounce to Fib PR1 around 455 which was crushed on Thursday. We can anticipate renewed fighting on that level.

ER Daily: As mentioned earlier, the low to mid 420s also provide a strong support (Fib Pr2) here so a bounce turning into a Fib Expansion pattern is quite possible here. It is way too early though. Bars are still red, and MTFS is nothing bullish yet. Again, we'll have to watch ER's behaviour on this key [424-437] range to make up our mind. I would have a bullish bias here, even if i would advise to hold on to one's horses a little longer still.

ER Weekly: Again, we're in a typical "failed recovery" scenario which should turn into a C&H pattern later on... if current support levels hold! Otherwise, we're on our way to 365...