Sunday, June 21, 2009

Weekly Report - Jun 22nd to 27th '09

Last week's reports were pretty much on the mark. Let's see whether our charts still provide some clarity going forward.

ES on the 60mins chart has only moderately crept higher from the 906 support level and seems ranged bound with a resistance in the low to mid 920s. The situation is relatively unstable so while we should take higher lows seriously, this late rise remains too weak for our liking. Having said that, a burst of energy is always possible if range highs (around 930) are broken.

The daily chart expresses the same concern as last week, whereby one could still see some retracement to a lower support level before attacking the major 968 / 1000 levels. That support level could be in the 880s, or maybe back to the 875 pivot level.
The market definitely needs a consolidation after such a strong rise since March lows. It however difficult to estimate when portfolio managers will do their window dressing ahead of end of quarter reporting. This could trigger some substantial selling. Note that even the weekly chart with a very high entropy level is "ripe" for a retracement (840 ?).

The situation is about the same on TF, and we can keep an eye on the 500 level as a signal for the anticipated retracement. One cannot however discard an alternative possibility of seeing the bearish pressure dissipate over time on such strong support level (looks unlikely though). Again, at the moment there is no indication that the still hypothetical pullback would be more than a pause toward the 600 / 625 levels in the medium term, but at the same time, our charts hardly ever give us more than a few weeks visibility.

There will be daily updates this week still, then we will slow down to a mid week report during July/August unless market activity warrants more coverage like for the last 2 years.

( posted Sunday 5:30 PM UK )