Tuesday, September 01, 2009

Market Update - Sep 1st '09

The good thing is in times of turbulences is to be able to count on at least a few invariants. One is the 32 point price segment (itself subdivided in sub segments of 8 and 16 points) we've seen on ES for a very long time.
So, even abrupt "air holes" convert into price moves we could call quantum leaps.
ES shed about 16 points in a couple of days to find support around 1016 and is now bouncing up to 1024. What a coincidence...
We can also draw a parallel approach using Fibonacci.

Now the short term hesitation is still there and passing 1024 may be a little difficult but the true test is around 1029 to 1032.
As mentioned in previous reports, one cannot discard the necessity to retrace lower to 1000 to gather strength. Over the longer term, even if ES is now lacking stamina (Entropy is fading), the outlook is still modestly bullish.

We note that TF is also bullish over the longer term but is more bearish in the short term. Therefore the overnight bounce on ES may be short-lived. Salient levels will be checked carefully.

( posted 7 AM UK )