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 )