Thursday, November 12, 2009

Market Update - Nov 12th '09

I called it a "confusion area" yesterday with a breakout attempt which failed to reach the 1113 target. More of the same today with a possible further erosion to 1085 then 1079. Again, we have conflicting forces with some congestion in intraday time frames, a residual buying pressure on the daily chart and some indication of a forthcoming pivot on the weekly chart ! Overall, we anticipate a reversal even if the exact timing is difficult to predict.

TF also hit the resistance in the low 590s as expected and should also retrace later on... Patience is a virtue, so let's not read too much between the bars. Although a pivot is expected on the weekly chart, one must always go with the flow and refrain from being contrarian and press the button too early. The technique is certainly more than dynamic enough to prevent acting too late in any case.

EURUSD: Again a 30mins time frame gives better reversal points here. The €/$ hit support level to then test the pivot again, behaving almost like clockwork. We should see the same kind of congestion as with indices, with a likely return to support around 1.495. Unlike indices though, retracement potential is limited. Breaking current support could trigger some selling, but congestion is the same range is my favourite scenario for now.

( posted 6:45 AM UK )