Sunday, November 22, 2009

Weekly Report - Nov 23rd to 27th '09

The weekend is always a good time to reflect and gauge how previous reports anticipated forthcoming market action. It's not an exact science, and again, it is impossible to estimate whether this chart reading technique provides some insight 1, 2, 3 or sometimes more bars ahead. Overall, it's not doing a bad job.

ES has lost a bit of ground last week to the high 1080s and despite some buying late in the day on Friday, should try and find support a little lower, more likely around 1078 (Fib/MM). In any case, 1093 is a test level for this last retracement, which could trigger the last bit of selling to 1078 or send prices back to 1102. Should the market opt for the down scenario, we would still be in our same channel (daily chart) but we can't say yet whether ES has engaged into the retracement we've been announcing on the weekly chart. In addition, this weekly chart is still not showing a pivot, and indications of a retracement are starting to fade. This probably means that only a clear channel breakout on the daily chart can confirm the retracement scenario or not going forward.

TF has landed inches away from support (578) which remains a major test level. The short term outlook is hesitant with conflicting pictures across time frames, but the down side is more pronounced than on ES. Here again a breakout of the 578 level would certainly clarify our patterns and confirm a return to the low 500s.

EURUSD has test levels ahead (1.4873 and possibly 1.492) to try and stop the current erosion. There is no indication of a sizeable retracement, and on the contrary looks fairly congested with a support level just below 1.48 hit last Friday. On the upside, we'll keep an eye on test levels above and a possible channel breakout. We'll have to update this rather fuzzy picture as we go along.

( posted Sunday 6:20 AM UK )

PS: Note that on account of traveling, there might be no market update on Tuesday morning.