Weekly Report on ES & TF - May 4th to 8th '09

We've had a shorter week last week even though trading volume was sustained on Friday, and as we anticipated, we have a bit of indecision and synchronization going on with indices now sort of realigning on their respective resistance levels.

The top question today is "Shall we now see those key levels being broken or not ?" ES is still quite bullish and the slower MTFS green line is now slowly joining the party. The chances of trend reversal are now quite reduced and a breakout is even possible. Again one should always go with the flow even if we an action plan in mind. Therefore, we have to assume that a breakout is possible opening the way to the 1000 level. We do need at least a red bar on the daily chart to bring up the retracement scenario that has been discussed for a week at least.

On the 60 mins chart, we do notice a trendline linkng channel lows hence some selling could start if ES breaks 865. Buying pressure however still looks like a dominant force.

On the daily chart, retracement levels once confirmed will be 800, 775, then 750. Nice round numbers, but nothing more than potential targets until a retracement starts showing.


ER has now caught up wiyh ES and hit 500. This level looks a lot stronger than the equivalent 875 on ES, so will this trigger the expected sell-off ? Difficult to say now but we should have an answer by mid week. In case of profit taking, a target around 440 to 445 is likely, but nothing more as MTFS is now relatively bullish.

I'm afraid i haven't here given a clear answer to the "top question" above, but my reading of the market is to prepare for both a likely retracement and a less likely breakout, even if the breakout would be a normal continuation of the current market configuration.

( posted Sunday Morning UK )

PS: Commented chart available here

Market update - May 1st '09

875 has been briefly penetrated yesterday on account of some lag between indices (ER was a little behind ES). Now that ER has finally also hit its resistance level, we can maybe hope we've reached the decision point we've been waiting for.

Unfortunately, the buying pressure has built up on the daily chart so a breakout is now possible even if we still stick to our retracement scenario. Markets could be rangy and choppy.

In the short term, yesterday's low on ES is our key level for retracement, which should be limited initially. Trading should be slow today on account of the public holiday, so we'll review this scenario early next week.

( posted 7:30 AM UK )

Market update - Apr 30th '09

Again, it is clear that one must always guard against reading between the bars (pardon the pun). We knew there was a possibility of reaching strong resistance level first, which often acts as a (strange) attractor.

ES has therefore clearly hit 875 (at least this is done now), and... we might have to wait a little longer to finally exhaust buyers enthusiasm. ES should indeed hover in this price area for a while, unless market participants decide to massively take profits ahead of the long weekend (unlikely though).

Once selling has started, we'll follow Fib/MM for targets (unchanged from previous reports).

ER (aka TF) is slightly out of sync as it is still running to catch up with its own 500 target. The pattern formation is however exactly the same.

( posted 7:10 AM UK )

Market update - Apr 28th '09

ES remains quite resilient at these levels, even though a "air hole" could perturb this configuration anytime. On the 60mins chart, ES bounced on a first Fib target on 850 which is usually fairly weak. Again, we would favour a drifting or profit-taking scenario but in order to avoid putting the ox before the cart (common mistake i also do) one should wait for the daily chart to show a least a red bar (the weekly chart is also indicating a peak).
Should selling start picking up speed, we see the next target in the 840 to 843 area.

The situation on ER (TF) is similar, and maybe clearer too. We are in a trading range made of price segments which are more or less 7 or 8 points wide. ER needs to break 468 (range mid point) then 461 etc.
The daily chart is also quite resilient, to the point that we can't discard a scenario whereby ER would manage to pass this stall level to give a go at the almighty 500 level. Here again, the "air hole" episode is quite probable so we are waiting for a red bar, and a breaking of the trading range on the 60mins chart first.

( poste 6:50 AM UK )

Market update - Apr 28th '09

ES stalled on ... MM Stall level (867.25). Quite prdeictable of course. ES then spent the day drifting to the 850 price level which is the 1st Fib target.

We know that while quite resilient, gravity should prevail so ES should test prices near MM Pivot and the next Fib target i.e. around 840 to 845.

Buyers will then have to be 'exhausted' on the 830-835 area to possibly permit a clearer picture. I however believe there will be barriers near 820 and 812, which if/when broken will open the way to our Fib target (797 then 766).


Same picture on ER (TF). In the short term, we need to see 460 broken. One might first see 468 being passed then tested as a resistance level. ER is just as resilient but maybe just need a bit of a shove to retrace more clearly.

Note however that reversal potential decreases over time, so there is very little chance to see more than a retracement for a Fib target around 410 to 414.

( posted 6:40 AM UK )

Weekly Report on ES & TF - Apr 27th to May 1st '09

Last week has been a little frustrating with pivot indications announcing the end of the bull run (since early March). The too obvious 875 resistance level has been almost hit twice and buyers may just give up anytime.

ES 60mins
This MM Stall level on 867 coincided exactly with a Fib pattern which justifies profit taking. Having said that, the ESM09 tick chart (1597T) shows a 2% FALL, hence we have to be VERY CAUTIOUS here. Check Fib retracement levels (851, 845, 840) for reversal.

ES Daily
The 2% early morning morning fall (Mon 27th) is in fact in line with our scenario even if spikes and high frequency moves in general are difficult to capture.
We here see a confirmation of our former outlook (last week's reports) for a return to the high 790s. We cannot however discard prices to remain first constrained in a range for a while with a lower boundary in the [820-830] area.
While this is way too early, one can already see a target on 766 (2 Fib patterns).

Weekly
A provisional pivot is now showing, thus giving more credit to our scenario on lower time frames. We've been repeating over and over that the bounce from early March lows would be subject at the very least to some profit taking.
We'll now wait for this pivot to be confirmed first to validate our targets (797, then 766).

ER (TF) follows the exact same configuration.
468 is a short term test level. Reversal will be confirmedn if it is broken then tested as a resistance level. Profit taking has been long overdue, but again we don't anticipate recent lows (early March) to be tested again.

Market update - Apr 24th '09

Not much to say about ES today really...
Intraday traders can have some fun on tick charts, but the 60mins chart is congested in a trading range, and the Daily chart is holding well although the 'air hole' could happen anytime. Check 843 as an intermediate support, which if broken would make the market move to the price segment below (828 - 843).

Same picture on ER (TF), which again looks quite resilient still.

We'll review our scenario quietly over the weekend as we don't anticipate the markets to collapse today.

( posted 7 AM UK )

Market update - Apr 23rd '09

ES retraced up more or less to Fib PR2 (mid 850s) to then resume south. We certainly have to accept some resilience in the market, hence we have to be cautious around a pivot as always, even if this obviously looks like a classic head & shoulder.
The market should continue drifting rather than falling and we'll check for levels on the way to the high 790s. We have to pass 828 then a strong support in the low 810s.

ER (TF) is certainly significantly more resilient than ES (is it trying to hit 500 first???) so we have to remain cautious still about this profit taking period being possibly short lived. Hesitation at this level is quite normal and we however still believe ER will retrace if only to the 427 to 438 range.

( posted 7:40 AM UK )

Market update - Apr 22nd '09

ES bounced as expected, even if we have to realize that high volatility always increases S/R levels' elasticity. The fall was therefore stopped 3 points lower than the 828 level followed by a bounce to 848.5 i.e. 5 points higher than our resistance target yesterday.

On the daily chart, we cannot be suprised by this up day. This indecision is quite normal, however selling should resume if only to the Fib PR1 level. We notice that MTFS does not point towards a return to a bear trend at this point in time. We still believe that in the medium term, the retracement target is 766 or 750 where another bull run should start.
We'll update this scenario in due course.


Note on ER (TF): While 468 is a strong resistance level, selling pressure is not as marked as for ES.

( posted 7 AM UK )

Market update - Apr 21st '09

Nice fall, wasn't it ? We've been expected it, and even the most conservative of us went short on 858. The slide stopped close to the 82825 MM resistance level to bounce in post market trading.

Tick charts do confirm the bounce to 836 and possibly 843 later on, although it is unlikely to reverse this new retracement direction. ES should normally be on it way to the high 790s as mentioned in previous reports.

The situation on ER (TF) is similar, however 453 seems to be a stronger support level. We here also believe the new target is 427 but we might have a bit of fighting in the short term.

( posted 7 AM UK )

Weekly Report on ES & TF - Apr 20th to 24th '09

Last week Monday, the report was maybe unclear for some as ES was already so overbought on stall level that we anticipated day after day a reversal which never quite materialized.

Some would have tried going aggressively short for minimal gains or losses, but most would follow our on-going advice to only "go with the flow" and we have to remember that we've never had any red bar on the daily chart.

Let's try and analyze our charts:

ES 60mins
A lot of hesitation, a lot of anticipation and maybe some frustration too. ES is now more overbought than ever before so that much awaited pivot may just be around the corner so to say. 875 (which is a price attractor we mentioned last week already) is now so close (only 3 points away from Friday's high) that one almost can't imagine it not being hit. One should however be cautious of overly obvious targets though.
Anyway... as always, we'll go with the flow and study ES behaviour as we approach our target.

Daily
Here again, the MTFS white line shows no sign of abating just yet. It is clear however that reversal will be soon coming so we can prepare in anticipation for a retracement to the the high 790s or maybe lower.
Let's first wait for the MTFS white line to peak and a red bar to go short though. Shouldn't take too long...

Weekly
No change in our scenario since last week. We first have to wait for the slowdown we forecast

Note on ER (TF)
Same patterns, but difficult to say whether ES will hit 500 before retracing.

Again one should wait for a clear pivot confirmation and monitor (and possibly also trade) shorter time frames (e.g. tick charts like 32000V bars or lower). We'll check for a key 858 level on ES for such confirmation (change of price segment).

( posted Sunday 9:20 PM UK )

Market update - Apr 16th '09

ES is swinging around pivot level from stall level to stall level. One should not ignore that ES is still quite resilient even if it is peaking now on the daily chart.
It may be a little early for most to go short on that time frame still, but the risk is relatively limited.

Note that going short on the 60mins chart is considered technically as a contrarian trade since swings are still UP on the daily and weekly charts. We generally go with the flow, i.e. only take aggressive contrarian trades if pivots start showing even if unconfirmed. There is nothing wrong with being more cautious and wait for a clearer pivot on the daily chart.

ER (aka TF): similar picture, however may be slightly leading ES.

NB: a commented chart is posted on the technical blog:
http://ts-trading-technique.blogspot.com/2009/04/es-chart-with-commentaries-apr-16th-09.html

( posted 7:50 AM UK)