Market Update - Jun 23rd '09

We had anticipated this move on several occasions, even if it is never too easy to pinpoint when the breakout will actually occur. It was therefore a clear case for a stop entry just below support levels or simply follow the last pivot and enter limit or on some pivot confirmation.

ES went almost straight to the target we gave yesterday (2nd Fib expansion level) and should aim at stall level in the low 880s but some soft landing is possible in the short term. The daily chart points lower though, so any bounce on the 60mins chart is likely to be short-lived.
Note that on all time frames, an absolute bottom would be around 840, i.e. we do not revise our longer term scenario described in previous reports to see ES test 968 then 1000 within a month or two.

TF also shows a soft landing area around current lows, so shall we see 500 tested as a resistance again to then aim lower ? Like for ES, a longer term consolidation target is probably in the 460s where buying would resume in concert with ES.

( posted 7 AM UK )

Weekly Report - Jun 22nd to 27th '09

Last week's reports were pretty much on the mark. Let's see whether our charts still provide some clarity going forward.

ES on the 60mins chart has only moderately crept higher from the 906 support level and seems ranged bound with a resistance in the low to mid 920s. The situation is relatively unstable so while we should take higher lows seriously, this late rise remains too weak for our liking. Having said that, a burst of energy is always possible if range highs (around 930) are broken.

The daily chart expresses the same concern as last week, whereby one could still see some retracement to a lower support level before attacking the major 968 / 1000 levels. That support level could be in the 880s, or maybe back to the 875 pivot level.
The market definitely needs a consolidation after such a strong rise since March lows. It however difficult to estimate when portfolio managers will do their window dressing ahead of end of quarter reporting. This could trigger some substantial selling. Note that even the weekly chart with a very high entropy level is "ripe" for a retracement (840 ?).

The situation is about the same on TF, and we can keep an eye on the 500 level as a signal for the anticipated retracement. One cannot however discard an alternative possibility of seeing the bearish pressure dissipate over time on such strong support level (looks unlikely though). Again, at the moment there is no indication that the still hypothetical pullback would be more than a pause toward the 600 / 625 levels in the medium term, but at the same time, our charts hardly ever give us more than a few weeks visibility.

There will be daily updates this week still, then we will slow down to a mid week report during July/August unless market activity warrants more coverage like for the last 2 years.


( posted Sunday 5:30 PM UK )

Market Update - Jun 19th '09

One should probably not pay too much attention to current "noise" on ES.
We indeed have some conflicting forces, with a first drive to try and reach 920, in a kind of a short term air-hole. We should indeed see ES fall toward the 880s in the coming days.

TF shows the same pattern with a possible short term target in the low 510s.

The underlying scenario remains the same with an anticipated consolidation then an attack at strong psychological levels (968/1000 for ES and 600/625 for TF).

More details in the forthcoming weekly report.


( posted late 10H15 AM UK )

Market Update - Jun 18th '09

Again, we see this kind of soft landing on 906 for ES and 500 on TF as one possible jumping board to aim at our targets (respectively 968/1000 and 600/625). However, as mentioned already, there is a substantial chance of markets gathering strength on lower levels (1 price segment). In either case, selling pressure is still there at least for a few days to a week.

We may see some increased volatility on derivatives expiration, so we'll probably have a clearer view early next week.

( posted 7:30 AM UK )

Market Update - Jun 17th '09

Markets behaved as expected yesterday with ES hitting target on 906 and TF on 500. A momentary bounce is possible in the short term and one cannot forget that this is only healthy profit-taking on the daily chart.
These levels are strong support levels on both time frames so we probably just have to exhaust the current selling pressure. One cannot discard the possibility of this level being broken and lose another 5% or so (quite a likely scenario actually).
Again no reason to believe that this is anything more than a normal pause to gather strength and attack the 1000 level.

TF follows the exact same route now (short term bounce), and will probably break 500 to fall back into the lower price segment (468 to 500) to then aim at the 600 levels. Could take a while though...

( posted 7:30 AM UK )

Market Update - Jun 16th '09

We were right in anticipating "turbulences" and watch out for that key 937 level. I thought the low 920s would hold, but ES might actually drift slowly further to 906 now.

Likewise, TF will probably test 500 later on this week, even if it could also rise to 515 first. TF indeed certainly indicates clearly that buying pressure is dissipating a little in the short term, while being now in a [500-516] price segment, i.e. one step down from the previous [516-531] trading range.

On the longer term markets are probably just looking for a base to attack 1000 for ES and 600 to 625 for TF, so again, one should expect a major reversal here.

( posted 7:40 AM UK )

Weekly Report ES & TF - Jun 15th to 19th '09

The market again showed remarkable resilience last week. ES tested the 950s as expected only to retrace to the 937 area which still acts as a pivot level.

We're coming close to the end of the ESM09 contract which has been quite bullish since March. Both 60min charts on ES and TF show low SQ (swing quality) level hence, one chould take cues from the daily chart and eventually trade a lower time frame (< 30 mins).

The daily chart is again clearly overbought and bullish, indicating some turbulences and possibly some retracement ahead of the stall level (high 960s). Such bullishness and forthcoming turbulences are also particularly visible on the Daily MTFS with the white line crossing the green line. As described many times on the TS-T-T blog, this is called a "early crossover" which can hardly stop ES from marching ahead to the otherwise overly anticipated 1000 level. We'll therefore watch out cautiously the stall level first (~968), and a likely retracement back to the low 920s, which is a Fib retracement level on the daily chart and the low of the trading range on the 60mins chart.

In the very short term, Friday's bounce on the 937 pivot level is also a a sign for a higher support level, which means that any retracement potential should remain minimal. We'll notice a Fib retracement level in the low 920s which coincide with lows of the trading range on the 60mins chart. We certainly can't discard some substantial volatility on triple witching week so we'll watch out for this key level to see which scenario develops (968 or 920 ?).

Lastly, if we take a look at TF for possible discordances, we do notice that the daily chart has reached its first Fib target level which could trigger some selling to now test the 500 level for support. No such sign in the short term though, so again, we'll need to update our scenario as we get closer to futures and options expiration.

( posted Sunday 11 AM UK, updated Monday 6:50 AM UK )

Market Update - Jun 12th

Quick note (n between flights at the airport) just to say that we may have a retracement point now that we've reached the 950s level. Check Fib levels from current highs, but do not expect a retracement below 875 unless this new emerging pattern is confirmed.

More to come this weekend.


( posted late 4PM UK )

Market Update - Jun 11th '09

Is it really worth writing a few lines today... ?
We see that same continuation of the trading range we've seen for about a week, with a potential breakout to the next price segment. We would then have a target in the high 960s. We also notice a reduction of the price range on the daily chart, confiming that any retracement would probably be limited. Again, the whole point is to know where and when this bull run will stop. Short term call spreads just above 1000 are pretty safe.

TF again shows more resistance in the 530s across time frames. Again, one might see TF reaching the 600 while ES goes to 1000 later one, but how long can the market sustain that same weak to moderate bullishness ? Put spreads are certainly however quite safe too...

( Posted 8AM UK )


NOTE: I will try and post a report tomorrow in between flights, even though one should not expect any "shock in the system" (some economic news today still...). As mentioned above, markets should just creep a little higher, so tomorrow's report may not be needed after all.

Market Update - Jun 10th '09

Same trading range and same hesitation with that same underlying bullishness. ES levels have now moved up one notch, with a target around 950 to 953. We're still unsure whether we'll see the market give a go at 1000 before retracing. The daily chart indeed tends to suggest a pause if not a retracement once range highs are hit again.

TF could be aiming back at range highs but shows even less inclination to go straight to the 600. A retracement is quite likely to gather forces for the assault of the 600 / 625 levels.

( posted 8 AM UK )

Market Update - Jun 9th '09

Market is still very much hesitant. We've seen ES almost testing range lows as mentioned yesterday, but finally still hovering around that same key 937 level. A breakout is possible, which would postpone the otherwise necessary retracement. Again the daily chart is still very pushy, so shall we see the market jump to the next price segment ?

TF is again somewhat less bullish right now, but longer term traders can safely aim for a higher price target.

( posted 6:45 AM UK )

Weekly Report ER & TF - Jun 8th to 12th '09

ES has been hovering on the Daily stall level for about the entire week, and is probably looking for direction now. Market participants will now have to decide to pause or attack the almighty 1000 level.

The 60mins chart is certainly looking at retracing on the 937.5 resistance level yet shows a LOT of resilience hence could remain overbought and rangy for a while. We will however check range lows on 920 (short term) and eventually 905 (mid term).

Again the daily chart is still VERY bullish so a prefered longer term scenario would be a testing of 1000 then a retracement to 875 (we'll check Fib/MM by then).


TF is again a little out of synch regarding levels, and is now a little less bullish than ES also. This is why we still can't discard a test of the 500 level again before aiming on 600 / 625. This short term pullback may coincide with a testing of range lows on ES.

Those who entered long early (weekly chart) have no reason to worry but can maybe tighten stops a bit in case of turbulences.


( posted Monday 9 AM UK )