Thursday, December 17, 2009

Market Update - Dec 17th '09

ES hovered in the 1100 to 1110 range as expected, and is now preparing for a possible breakout to the evolve in the lower price range with a support around 1093 (read TF below though). This is therefore the same continuation of the confusion area seen on the daily chart for about a month, and no indication yet of our anticipated retracement at weekly level. We'll have to be more patient now, and probably so until after the festive season unless to system shock perturbs the relative calm in the stock markets.

TF also stalled on 610, a level clearly showing as a stronger and stronger resistance in short time frames, but is still pushing a little. We have to figure out whether this broader based index can take ES with it. ES would then instead move back to the top of the current range. Since we do not have the usual high correlation, both charts will have to be monitored in short time frames. These markets remain relatively easy to trade in breakout mode.

A daily report is not always adequate in case of fast movements. We here had a modest bounce yesterday, to see the support level being hit with a vengeance in the afternoon. This was therefore an excellent breakout situation (i.e. stop short entry) on 1.452 where EURUSD aimed straight to the next support level around 1.44 ... and is still bearish, hence this support level may well only be a pause again on the way down. We now have a 1.408 target within a week or so. Note that a bounce is still possible on the way down, maybe to 1.464 but while the scenario is plausible, this is again not compatible with this report frequency. 30 and 60mins charts will have to monitored to check behaviour on salient MM levels like the current 1.4404

( posted 6:45 AM UK )