Quick Update

Quick update from absolute paradise (Nature's Valley in the Tsitsikamma primary rain forest in South Africa).

EURUSD broke some important support. We'll now watch a secondary support (see previous post) for a bounce which becomes more and more inevitable. Indices started the week pretty strong and also need to take a breather particularly ER2 on a strong resistance level. Outlook looks good, but we won't however put doomsayers to shame until September/October as we're certainly not out of the woods yet.

Next post... next Sunday... :)

Weeky Outlook on ES 11th to 15th Aug '08

Dominant TF: All three, daily lagging a bit
Swings: UP-UP-UP (from DN-UP-DN). Weekly just toggled UP.
Market Direction(daily): reentered long

Please also read ER2 post below for guidance.

Here again, those who played the bounce on 1250 last week must be smiling ear to ear (cf last post).

60mins: upper bias
MTFS is certainly overbought and ES ended the day on a yellow bar. Since Fib target was about hit, some profit taking remains possible but ES could certainly also reach higher to 1307 later on (Fib/MM targets). Continuation of a "wavy" upper trend is our favoured scenario.

Daily: possible breakout situation
MTFS is positive yet does not indicate decisive energy for a seemingly unconvicing breakout and we could anticipate a longer congestion in the same triangle. Entropy could also peak soon. This does not change our 'long' outlook overall but we know we should expect a runaway recovery and a pullback is actually quite likely at some point this coming week.

Weekly: Worst is over but...
We finally got a yellow bar and a MTFS showing first signs of completion. The green and brown lines do however still point down so congestion is likely here. The bounce we've been expecting is certainly here though so a recovery is now slowly under way, and we can (almost) safely say that the support levels we've been watching for weeks (i.e. 1230-1250) will be holding.
All in all, all 3 swings are up, and we'll check for the optimal entry using a shorter time frame, if not long already. Note: we're not out of the woods just yet, but stop level is easy to set as we are sitting on a strong 1250 support level. We'll try and cautiously move stop to ensure breakeven when possible. There is indeed no guarantee of a strong recovery in the short term.

EURUSD Aug 08

EURUSD is usually not included as a free report on this blog, yet is commented along with the Russel report. The latest market action is however quite exciting, so here is my current outlook (see screenshot above).
We'll watch for Entropy weakening and one of the three coming support levels holding to a retracement to the 1.533 level. We'll also note that the trend reversal is about to be confirmed indicating a durable change in market sentiment (over a few months horizon that is).

Weeky Outlook on ER2 11th to 15th Aug '08

Dominant TF: Daily, Weekly, with 60 mins lagging a little
Swings: UP-UP-UP (from UP-UP-UP)
Market Direction(daily): long
Options (RUT): no change in outlook for August, i.e. condor outside the 625-750 range. Some will have followed an older comment about going safer above 780. It is a personal risk preference although 750 should not be passed by expiration.

If we read last week's (daily) comment again, we can see that a retracement 'just below 700' was in the cards (Aug 4th), that the resistance level would be tested to try and go higher (730s). Obviously, only those of you who see charts in realtime or at least day by day have seen action developing according to forecast.
Same story on EURUSD where focus was given on "pivot (may) be tested again, opening the way for further gains later on". This occured early monday, to give the Euro slide a lot more energy. Breaking the 1.534 trendline (lows) only accelerated the movement.
A really easy easy week overall... :)

EURUSD: we have a strong resistance level coming now, and a retracement looks inevitable now. However, the reversal is now well engaged, and once this level just below 1.50 is broken, more gains will be in store. This will make the Chinese happy, bodes well for the US campaign, and should leave doomsayers speechless... :)


60mins: upper bias should weaken
MTFS is certainly bullish but is quite overbought also, hence profit taking may start shortly. This is also confirmed by an Entropy about to peak. Having said that, we'll wait for an white line inflexion, Entropy going darker blue and even a red paintbar to take a possible retracement trade (for the braves only).
Should the remaining momentum take ER2 higher first, our target is around 742 (stall level), on the way to 750 later on (not visible at this time frame yet).
Retracement should be limited to around 726.

Daily: could creep higher
Very little change in fact: This is again the dominant time frame and MTFS lines still point higher. The 720 Fib level broke out to provide some additional energy to reach 730. MTFS lines gradient is moderate but Entropy is coming back a bit so ER2 could try and pass current stall level to give a go at 750 later on. It may take time however, and one may even see some very moderate profit-taking first (note: bar is still blue).

Weekly: upper bias - same trading range for now
We're now aiming back at the upper range boundary, but apart from that, nothing to add to last post really. We're in a summer recovery mode but the trading range is still there and unless new energy comes on a breakout of the 750 level (750-756 area to be exact), one may just go for another round of congestion. We'll have to wait a few more weeks and more volume to get a better picture.

Weeky Outlook on ES 4th to 8th Aug '08

Dominant TF: All three
Swings: DN-UP-DN (from DN-UP-DN)
Market Direction(daily): fairly directionless, but if still long, position could be lightened. Some will be flat to reenter later.

ES entered the congestion period we anticipated last week, and could remain range bound for a while.

60mins: slowdown or soft landing on 1250 again.
MTFS indeed points for some mild erosion. The white line is about flat right on zero level and Entropy is also indicating an attempt to very slowly move upward later on.

Daily: congestion
Entropy seems to have dissipated all negative energy but is there enough to really take ES higher now? MTFS is also midly pointing up but all in all, so little energy that one could actually stay in the same congestion mode for a while.
A bounce on 1250 remains a likely scenario later on.

Weekly: Caution must be exercised.
We're definitely in presence of conflicting forces. MTFS is here also somewhat bearish with a green line still quite negative. Yet the white line tells us that the fall may be over or slowed down at least. We'll wait for the weekly bar to turn yellow, possibly this week to confirm the end of the bear mode. Until then, we have to remain cautious. Entropy has bottomed up at a low level (EntBin = -5) so a bounce is quite possible within the next few bars.
From a pure price analysis, we obviously also need our support levels [1230-1250] to hold. Shorter time frames seem reassuring in that respect.

Weeky Outlook on ER2 4th to 8th Aug '08

Dominant TF: Daily, Weekly, with 60 mins lagging
Swings: UP-UP-UP (from DN-UP-DN)
Market Direction(daily): flat, looking at going long again
Options (RUT): no change in outlook for August, i.e. condor outside the 625-750 range.

ER2 didn't pass strong resistance level and even retraced early in the week hence my previous weekly recommendation.
We are still in "holiday" mode and will be so until Aug 25th. ER2 has retraced mildly to the mid 700s is now back to resistance level ready to give a go at it again.

EURUSD: We watched the key level and we're happy to see the US$ looking a little healthier now. Obviously, it is way too early to rejoice and more bad news may be coming later on, but there is a general feeling that the worst is now over in the short to medium term that is. The debt level in the US and its dependency on China remains worrying.
US$ may try and test range lows again, but there is still no sign of a straight path there, and the key pivot may be tested again, opening the way for further gains later on.

60mins: strong resistance level here we go again
Not an easy time frame, so traders wishing to play a possible breakout are advised to move to a lower intraday time frame.
We certainly do have an upper bias, but no indication of sufficient energy to pass the 719 resistance level. Should a breakout be confirmed, we would jump to the next level in the mid 730s and eventually 750, but that goes way beyond this time frame.

Daily: trying to move upward
This is the dominant time frame and MTFS lines point higher. Line separation and a weakening entropy do not indicate a straight path to the next important levels (730s and then 750). It is difficult to predict duration of a congestion period or exact timing for a breakout, but at least no significant retracement going forward. Should buyers give up on 719 level, we shall look at the 1st Fib retracement level just below 700 for support.

Weekly: same trading range for now
Swing just oscillated again at current level. Last week has been positive and Swing can toggle up or down in this price area. We do also notice the bar has gone blue again. We however do not get much support from MTFS and Entropy, so one should not expect more than a "summer" recovery within the same [625-750] trading range.
The good news at least is that we are now leaving the stall area which could have led to a Fib expansion to 625. This Fib pattern hasn't technically failed yet, but we have so far no pivot on the daily chart which could lead us to a down Fib pattern. All in all, not quite cheerful just yet, but moderated optimism within the same trading range. This scenario will be valid until either boundary is being tested.

AdMarkAn Update

AdMarkan will be on "holiday" mode until Monday August 25th.
There will be no interruption to weekly reports on this blog.

Weeky Outlook on ES 28th July to 1st Aug '08

Dominant TF: All three, with 60mins still a little behind
Swings: DN-UP-DN (from UP-UP-DN)
Market Direction(daily): long (lighten position) or flat to reenter later

Please read the ER2 post also. Both symbols are undoubtedly correlated yet each has its specificities.

ES went up to 1291 (for a 1295 target and now is retracing to 1250 and possibly below. So, all in all we've had a very easy week for ES.

60mins: will 1250 hold?
MTFS certainly follows price action therefore indicates a lower support. Entropy however is not so bearish hence ES may congest around 1250 or slightly lower without breaking that level (1246).
The Swing indicator announces a possible reversal with a first Fib target back to latest highs. We shall obviously wait for for the indicator to toggle up to confirm such scenario. This would be in line with some congestion at higher time frames.

Daily: slowdown, possible congestion
Again, following a ECO (early MTFS crossover) we knew there was little chance to see the recovery carrying through to higher levels and the 1st Fib retracement proved to be a profit taking level. IT would now make sense to test 1250 to be tested more firmly to go higher later on. We have however remain careful if this daily bar turns red. If we look at Entropy now, it seems that negative energy has almost dissipated. We don't however see ES bounce straight away but a Fib pattern may form later on this week.

Weekly: Caution must be exercised.
No change really... Bars are still red, MTFS still fairly bearish and Entropy has not bottomed yet! It is therefore far too early to rejoice so we'll remain cautious and check on support levels. We can still assume that 1230 will hold.
Next Fib level is way down at 1100 but we'll avoid falling into pessimism and wait for a possible yellow bar and maybe a pivot coming in the next few weeks. In any case, no recovery potential in sight in the short term.

Weeky Outlook on ER2 28th July to 1st Aug '08

Dominant TF: Daily, Weekly, with 60 mins falling
Swings: DN-UP-DN (from DN-UP-DN)
Market Direction(daily): flat or short
Options (RUT): no change in outlook for August, i.e. condor outside the 625-750 range.

On ER2, last weekly post mentioned tightening stops on the long which incidently reached target at 725 (Fib, just above SR).
Most would have tried a short which may take a little longer to materialise. We do notice that the 60mins is no longer a significant time frame, so we'll switch to a lower time frame to follow our trade while keeping in mind the daily and weekly contradictory charts.

EURUSD: No major change: there will only be a chance of significant recovery if the US$ passes 1.5625. Prices have been contained in a trading range.

60mins: congestion with lower bias
Prices left SR to reach 700 so to our surprise a little higher than Fib PR1. We have kept an eye on EURUSD which almost hit the target 1.5625 level (mentioned several times on previous posts), but we do notice correlation is not as clear as it used to be.
MTFS lines seem to ge their own way indicating possible congestion and Entropy is not helping either. We will therefore limit our analysis to pure price patterns and follow a likely Fib pattern to 700 and lower. No significant drop to expect, unless volatility increases on account of lower volumes.

Daily: peaking...
ER2 reached clear Fib targets (719 for the retracement, 725 for the previous Fib expansion), and looking now at taking a breather. The early MTFS crossover (ECO) and peaking Entropy should normally allow ER2 to retrace to the 790s. No indication at this stage that ER2 will retrace lower yet 688 is also a possible target.

Weekly: congestion to a little bearish
For the 2rd time now, MM stall level seems to have broken the fall, and one might think that a reversal is in the cards. Yet, MTFS and Entropy look if not bearish at least congestive so one should certainly not expect a strong rebound before the negative pressure is dissipated. Further to what was said last week, the last bounce looks like it was short-lived and last lows (stall level) or the Fib target around 625 can still be hit within a few weeks and without any significant exogenous shock to the market. One shall therefore remain fairly cautious as one should always be when Swings are in a DN-UP-DN configuration.

AdMarkAn Week 21-25 July 08

Last week was fairly classic and unsurprising with ES rising very close to our target then retracing back to major support.

For details, a copy of last week's AdMarkAn posts is now available on request.

Today's report will be posted shortly.

Weeky Outlook on ES 21st to 25th July '08

Dominant TF: All three, with 60mins still a little behind
Swings: UP-UP-DN (from DN-DN-DN)
Market Direction(daily): going long

Please read the ER2 post also. Both symbols are undoubtedly correlated yet each has its specificities.

60mins: 1250 seems to hold yet...
We indeed saw the channel breakout as mentioned on the last weekly post, to see prices settle a little higher. Indeed lower intraday time frames showed clearer pattern and possible Fib target up to 1270. Swing is now UP and MTFS isn't looking too shabby with a pattern indicating some exhaustion in the short term but clearly some steam left in the green line. This is typical of a stall but can generally take prices higher. This stall is also visible in Entropy weakening fast. ES should therefore remain contained in a fairly narrow trading range.
More interesting maybe is how MM levels have evolved. 1250 is now clearly a pivot level, and despite the overall up move in the last week or so, SS is now significantly lower.
We shall therefore again take cues from lower time frames to check ES behaviour around pivot level as we might see some retracement at the end of the current congestion period.

Daily: Up bias
We already had an early MTFS crossover last week, so we anticipated a bottom, and even a bounce on Fib/MM support levels. We now have a more positive outlook with ablue bar, lines sloping upward, bottoming out entropy etc so ES should certainly be looking at going up possibly to Fib PR1 (38.2%). Now the only caveat is again the early crossover so one could either be long with a stop below 1230 or maybe try to find a better entry point anticipating a pullback still. Looking at the overall picture, i would tend to opt for the second scenario.

Weekly: Caution must be exercised.
Again we see that Fib target level here similar to the one on the 60mins chart. We last week mentioned a bit of fighting on those levels and despite a possible 1100 Fib target, a quick look at our symbols seemed to provide enough reassurance that current bottom would hold.
A week later, one can say that this scenario looks valid bt we're not out of the woodds just yet. We will remain cautious and above all refrain from turning bullish already. The Fib pattern is still there and MTFS still looks quite bearish. We will wait for at least a yellow bar above 1250 to confirm the fall is over. This means that despite positive signals in shorter time frames, there is still no strong recovery potential at this stage.

Weeky Outlook on ER2 21st to 25th July '08

Dominant TF: All three, shorter time frames leading
Swings: DN-UP-DN (from DN-DN-DN)
Market Direction(daily): flat to long
Options (RUT): no change in outlook for August, i.e. condor outside the 625-750 range.

On ER2, last weekly post indicated exiting shorts but not going long just yet (following our time frames and market outlook). We indeed saw a bottom being confirmed and even some attempt to go higher. Looking at intraday time frames, some would understandably have gone long last week.
All in all, last post again didn't do too badly. What next now?

EURUSD: There will only be a chance of significant recovery if the US$ passes 1.5625, so fairly weak and directionless still. We'll obviously also keep an eye on oil prices and further consequences of the subprimes blunder.

60mins: no upward momentum but...
We indeed saw ER2 passing the MM pivot level briefly to hit a Fib target but there was not energy to carry prices much higher. Hitting 700 was even a bit of a stretch.
MTFS is pointing for a mild erosion and MM level turned to Strong Resistance.
There is still a vague chance that SR holds as support but this is unlikely. One would rather anticipate ER2 to find some support on a lower Fib retracement level. There is however no indication of a reversal (we don't even have a single red bar) so prices shall not reach recent lows again.

Daily: trying to move upward
Despite the early MTFS line crossover, we now have a positive outlook on ER2 with lines pointing upward. Entropy is also looking healthier now. One might have entered long last week from lower time frames (i however purposely only give a market outlook and no trading signals per se). Stops would be tightened now.

Weekly: congestion to a little bearish
For the 2rd time now, MM stall level seems to have broken the fall, and one might think that a reversal is in the cards. Yet, MTFS and Entropy look if not bearish at least congestive so one should certainly not expect a strong rebound before the negative pressure is dissipated. Furthermore, as all 3 time frames weigh equally now, the latest bounce may only be a reprieve and the Fib target around 625 can still be hit within a few weeks and without any significant exogenous shock to the market. One shall therefore remain fairly cautious as one should always be when Swings are in a DN-UP-DN configuration.