Sunday, December 13, 2009

Weekly Report - Dec 14th to Sep 18th '09

The last weekly report was pretty much on the ball even if it has been a chaotic week, yet not too difficult.

ES has gone all the way back up to stall level on 1105 preparing for assault of the 1109 strong resistance which could finally open the gate to fighting the 1125 level. Should be a lot of fun...

At this point it is difficult to predict wheter 1109 will break though, as there is little energy left to allow prices to creep to that salient level instead of besieging it assertively.
Whoever sold a few call spreads north of 1125 must be smiling ear to ear even if we are still waiting for that retracement still visible on the weekly chart.

TF is also a little hesitant with an upper bias, with test levels (highs) around 600, a Fib/Stall level around 610. Like ES, it isn't quite clear whether TF will eventually hit 625, now turned to strong resistance level. We note however that the retracement potential at weekly level is slowly fading, with entropy about to switch back to momentum mode (versus reversal mode). We need it to be confirmed in the next few weeks, otherwise it will disappear. Shall we have our big drop early in the new year then ? We need that salient event on 610 or 625 to generate energy, either as a breakout on the up side or the much anticipated retracement. Markets always work in quantum leaps of energy and we can notice clearly the hesitation around 500 after the March recovery. We're now experimenting the same situation exactly 125 points higher. We would then aim for 750 again... We'll come back to that scenario also early Jan.

And finally, our 3rd symbol : EURUSD
We can clearly see the quantum levels here too, on shorter time frames this time. After leaving 1.5136 to drop in a freefall, we are now in the 1.464 area.
EURUSD is still fairly bearish in the short term, but should at least test 1.464 again early in the next session. Bears could try and keep it low, possibly for the entire day, where this bungee-jumping fall should then bounce back fairly briskly. At this point in time, a bottom for the day can be friday's low or at the very worst 1.4557 (stall level). Note that the expected bounce should not be strong enough to reverse dynamics, i.e. the US$ is later on likely to strengthen further or at least stay off recent lows. Current support area if/once broken could bring the € down to 1.41 but that's at least a month or two down the line, so we'll have plenty of time reviewing this scenario.

( Posted Sunday 4 PM UK )