Quick update for Sep 25th

Due to the current volatility and uncertainty of the market, i shall post a few more quick reports on the public blog. Please contact me still for other symbols.

The general commentary remains the same: move to shorter TFs for a bit of fun or stay cautious if using our 60m/D/W charts. The worst may be over, but the hangover effect is still there for a while...

EURUSD: After testing 1.464 all morning to a very soft response, the market decided to look for a support on 1.46. Again, no surprise but did we get the extra push to reach 1.495. Not sure in the short term, but we'll get there eventually. At this time frame as well as daily, we'll keep our UP bias.

ER: What will stop this endless drifting? The market decided to test another price segment and we're now on our way to 688. The good thing is that this support level is significantly stronger, but the downside is that there is no sign of a bounce yet. That's good for our options condor anyway, so we won't complain.

ES: The shock we had last week impacted ES more than the larger market, and it appears that while ER tried to catch up yesterday, a support around 1188 (same segment) is holding. A technical bounce is quite possible here but like ER one should not build undue expectations in the short term. ES should stay in the same price segment (<1204), and 1219 looks very strong.

(snapshots available on request)

Mid Week Update

ER: Retraced to 704 as expected (see yesterday's report), and could actually drift lower still but we'll give a possible bounce a chance on this support level even if there no such indication whatsoever yet (bars are all solid red still).

ES: ES retraced deeper than anticipated. Like ER, it could technically bounce here, and like ER, there is no indication it will do so yet. It may take a long time for prices to settle even if the overall bottom is probably behind us now.

EURUSD: bounce on 1.464 or 1.46 is very likely.

(snapshots available on request)

Catching up on the Weekly ER Report

Dominant TF: 60mins, Daily, then Weekly (shorter intraday TFs recommended)
Swings: DN-UP-UP (from UP-DN-DN) strange isn't it...
Market Direction(daily): flat or long (intraday recommended)
Options (RUT): Vega is sky high but no change to our positions

Sorry about yesterday. ER became TF and I reacted a little too late for the open. ER is close to ES anyway, so besides specific levels, dynamics are the same and and market reading similar enough. Here is a shorter report for the rest of the week.

EURUSD: I mentioned gong long on € but the retracement to ~1.47 seemed remote still. Forex also went a little wild so no surprise the € strengthened even we saw it breaking the resistance fairly easily. EURUSD should retrace a bit and now stay above 1.464 (first target is ~1.47) and eventually climb back to reach 1.495. A period of congestion is also possible as we anticipate volatility to subside a bit in the next few days.

60mins: profit taking - retracement
Restrictions on short selling must be impacting trading even if we don't quite see its full extent here on futures. To no surprise, 750 was a resistance too strong to break, and profit taking was obvious. We now see prices possibly stabilising in the price segment above 719, or more likely in the segment below ([704-719]) as there is still some negative pressure to dissipate in the first few bars of the day.

Daily: hmmmm what now....?
Last week's post expressed concern about prices drifting to 690, and volatility even brought prices lower to 675. Now we have to wait and see where prices will settle. Indicators have taken a bit of a knock but seem rather positive, so again we can assume a support to be found and prices eventually testing the almighty 750. It can take days though.

Weekly: upper bias in an extremely volatile environment
Our indicators show how painful it is for ER to try and pass 750. Like last week, we'll rather watch shorter time frames taking in consideration a possible breakout effect. In the short term, uncertainty and volatility need to settle, so the more aggressive investors will jump in now, others will wait for the 750 confirmation.

Weekly Outlook ES for Sep 22nd to 26th '08

Dominant TF: weekly, with 60mins coming back
Swings: UP-DN-DN (from UP-DN-DN)
Market Direction(daily): short or flat

ER has just been delisted from the CME
http://www.cmegroup.com/trading/equity-index/us-index/russell-2000.html
We need to sort out access to ICE to keep our charts up. Sorry for the inconvenience.
Note: despite being hit by vega, our October options position remains unchanged.

I've already commented this crazy week on a day by day basis. This was certainly the only way to sail through the storm. You'll notice that it is also in line with our significance level, favouring either the weekly chart or the 60mins one. Now let's see what's in store for monday. I shall comment the market on a daily basis on this blog until volatility settles a bit.

EURUSD: Last week's report was quite correct overall. Obviously we've had a few interesting swings on the 60mins chart, but since this weekly report focuses on the daily chart over the next few days, we here see a resistance level around 1.453 then 1.464. We have no indication of further gains even if there are concerns that the Fed & Treasury emergency plan will cost so much that it should ultimately weigh on the US currency.

ES 60mins: still a strong resistance level ahead...
Let's not come back on this wild rally and just focus on volatility which will remain VERY high for at 2 days. Prices should technically also settle on the first Fib retracement level and tease the 1250 level, but it is not possible to fully anticipate the effects of the 10-day ban on short-selling. From a pure dynamics point of view, 1250 remains a crucial pivot level. ES could retrace 1 or 2 segments (i.e. to 1234 or 1219), and will need to pass and test 1250 as support to engage into a bullish trend.

Daily: ? ? ?
What happened last week is clearly a spike at this level. Last week's caution warning is still valid as the model must digest the spike over a few days. We'll revert to the 60 mins chart, which displays a higher significance level anyway.

Weekly: Congestion to lower for now
Here again, i warned of lower lows, and the advice was certainly 'spot-on'. Despite the formidable recovery on Friday, the current trend remains still down technically, and again the 1250 level is key to forthcoming market direction. Obviously new market regulations on short-selling could allow ES to pass 1250 etc, yet if one just reads the chart as it is, more time and effort will be necessary to dissipate a lot of negative pressure still accumulated overt time.

We shall follow shorter time frames carefully until MTFS and Entropy both look healthier. We're certainly not out of the woods yet...

What a day !!! (Episode 2)

What did i say yesterday about wild swings? Whoever predicted the 1PM turnaround before market open was a true psychic... Lots of talks to try and reassure the market, lots of intervention from central banks, and high volatility on witching day... enough to want to stay on the sideline! Anyway, no rest for the braves, so let's have a look at the situation for today.

ES: Gained 100 points between 1pm and 8pm (left charts open after the close on this special day). This is simply MAD! I don't think i've seen that in 15 years...
Now what's coming next? Well it's going so fast that we have to watch lower time frames. Resistance level there is 1234 and 1250. A lot of operations due to witching day pushed prices away from equilibrium which will be found early today. Coming back to our regular segment analysis, even if we jumped a few yesterday, we are now in the 1219-1235 segment, so we'll watch the 1219 support level holding in case of substantial profit taking. Taking into consideration that segments can themselves be split in two, we also have an intermediate level at 1226.
Our 60 mins chart and our Daily chart go exactly the opposite way with the 60mins being more significant, hence we'll follow the remaining upward momentum until it finally fades. Over the longer term, the Daily chart will obviously prove right, and the pattern there will be complete by then. A period of congestion may follow. We'll obviously review all this in our weekly report this coming weekend. For now, yesterday's support held and we're away from danger zone for now... let's just trade like nothing happened...

ER: I have no superlatives for yesterday afternoon price action... All very similar to ES, so i won't repeat myself. We'll watch 719 holding in case of some substantial (and perfectly rational) profit taking today. Ultimately, when things cool down, we'll have to clearly pass 750 to call these volatile moments 'history'. For the time being, let's just follow intraday time frames. Again, 719 will be key level for today's market direction. In case of some congestion, we'll watch that ER stays in the same price segment.

EURUSD: another crazy crazy day again here. Prices paused indeed for a while, tried to break the 1.44 level again to then fall at 1PM, exactly when the prices reached a brand stall level above 1.45. Nothing wrong with that except everything happened in 'fast forward' mode...
Now we have a pattern that is trying to complete while prices are now sitting on a 1.461 pivot. The downward momentum could take prices a little lower or stay a little above pivot level until ready to bounce. There is some downward pressure on the daily chart waiting to dissipate.

What a day !

Again i invite readers to take a look at yesterday's post to realise it was correct... until lunch time! The markets are so wild that we have a very short visibility at the moment.

Let's have a look at the situation for today, taking into account Oct futures and options are on their last breath, meaning we could have some wild swings again.

ER: for the last few days, the salient support levels are 675 and 689 (cf. previous posts). It is ESSENTIAL that 689 holds, otherwise the road will be open to 656, 625 etc. No panic though: while bearish, a support level is likely to be found.

ES: Similar even if more bearish looking (more exposed to financials), ES must also CRUCIALLY hold the 1165 level. The problem here is that there is more indication of ES going further down even if 1165 looks pretty strong. We'll therefore give it a chance today. Next levels are 1100, 1050, 1000... Some doom-sayers look at this market as the double top of the century (2000 and 2007) sending market to the floor eventually... Let's just hope depressives will stay quiet now...

EURUSD: Yesterday's post was correct until lunch time where the Euro gained 3 cents in 1 hr. This is absolutely crazy (other forex pairs also had their wild moves). This retracement to 1.44 could and even should pause for a while (strong resistance level). We'll have a deeper look into it in our weekly report, but it seems that it could remain range bound for a while, or break out to the 1.465 - 1.47 levels in the next hmmm week, 2 weeks? Volatility is so wild that it could happen any time actually.

Safe trading to all,
bv

Mid week market commentary (Wed Sep 17th)

There are many many sites, many trading gurus out there giving you market advices. Most are wrong or evasive, most have inflated egos. Without being overly cynical about it, a market for worthless information exists only because there is demand for it...

Anyway, let's come back to yesterday's post a minute: I gave the 687.5 support level on ER admittedly penetrated to 680 without breaking. I'm not going to explain MM lines again, but it was clear only minutes after the open that the level would hold. The braves even bought ER below the technical support level. After the 1st run, 687 had to be tested again for support etc. ER climbed 2 segments in a day. All in all, a very classic, very very profitable day.

ER: now testing the high end of its price segment with remain upward pressure, yet some profit taking is inevitable today. Again, one can take short term profits and swing play short time frames. It is far too early to confirm we're out of the woods and a return to 703 remains possible if not necessary to climb again later on.

ES: Who could tell you ahead of time prices would reach 1165 and bounce from there. Yesterday's low was 1163 to be exact. Anyway, enough boasting... Similar scenario as for ER maybe only a little more hesitant until lunch time. Same story of a 2 segment price jump, and same caution now as we should not expect a second day runaway. ES needs to consolidate a bit now.

EURUSD: Yesterday's post: "bears will be coming back and play the Euro down to the pivot level again (~1.416). Euro could also get back to recent lows below 1.41" EURUSD indeed hovered above pivot line until lunch time then reached a low of below 1.408. Easy 40 to 50 pips....
Today, we'll stay on short tick charts. Pivot level is indeed losing significance a little, and we may see a bit of congestion or erratic moves on higher time frames until a clear Fib/MM pattern emerges. The underlying downward pressure (daily chart) could make it drift a little more within the next few days but again, shorter time frames will be needed as we can't discard an up move at first.

Quick update after Monday's "bloodshed"

Well, yesterday's "exciting" price action warrants an update on the public blog.

The update published just before lunch time yesterday was clear: prices were at the bottom of a segment, like on a thin string waiting to break. We however can't talk of a free fall, and yesterday's large %change also came from the friday afternoon's recovery wiped out over the weekend.

Anyway, let's look at possible support levels:

ER: 687.5 right now, otherwise down to 656, broken into 2 or 4 segments. Technically, same again to 625. This is quite unlikely though. We have to give this 687.5 level a chance first. A return to 656 would only be another round in cycles (as mentioned in previous posts) we've seen January. So let's just go with the flow again.

ES: levels are not as clearly depicted on our charts, and this may add some confusion for some. We have a support at 1165 which could hold today. There are other possible levels below, but i anticipate markets calming down.

EURUSD: The situation may be a little more confusing because the last upward retracement was a little too sudden to find an equilibrium price etc. Anyway, bears will be coming back and play the Euro down to the pivot level again (~1.416). Euro could also get back to recent lows below 1.41.

Quick Update - Monday 15th

ER: After the initial shock, ER is now staying in the 705-719 segment, yet, while energy is subsiding, there is still substantial downward pressure. We'll have to watch whether 705 holds. The segment below (support around 690) is a safer bet.

ES: Same story, here with a 1219-1250 segment, and also some remaining downward pressure. Not much of a safety below though, so lows have to hold otherwise...

EURUSD: a retracement to above 1.44 was expected, almost awaited, but it certainly came extremely suddenly. There is still some retracement potential but things are likely to calm down first just above pivot level.

Weekly Outlook ES for Sep 15th to 19th '08

Dominant TF: weekly, with 60mins coming back
Swings: UP-DN-DN (from UP-DN-DN)
Market Direction(daily): short or flat

Please also always read ER2 post below for guidance.

Another week of a fall then a recovery, hard to follow on a daily chart, but OK on a 60mins chart or below.
Again we look at the market in clear segments (see last week's posts) to better understand price jumps.
We're now trying to pass the 1250 level again, a level which has lost its significance now, at least until it is again firmly tested as support. This remains to be seen.

60mins: watch pivot level
Again, maybe repeating myself, we have to wait for a confirmation of prices staying above pivot level. MTFS is relatively bullish, even if Entropy seems to be losing steam already. One may want to study shorter time frames, as well as correlation to bonds and forex. We should know within the first few bars of the day if ES stays above 1250 i.e. evolves within the 1250-1281 segment.

Daily: high volatility, but no major change overall...
significance level has dropped for a while at this TF, so the more conservative will have switched to a higher or sometimes lower TF, or stay on the sideline for a while.
Current recovery still looks quite unconvicing, so its potential may be limited at first. Congestion and a clearer testing of the 1250 level would be needed to take prices higher. We'll remain very cautious in the short term.

Weekly: Congestion to lower for now
Summer recovery is over and failure to pass 1300 will force the market to find a reliable support level. The MTFS crossover right now comes with line gradients indicating that support may be lower than 1250, maybe near recent lows. We'll therefore watch shorter time frames carefully until MTFS and Entropy both look healthier.

Weekly Outlook for ER2 Sep 15th to Sep 19th

Dominant TF: Daily, then Weekly and 60mins
Swings: UP-DN-DN (from DN-DN-DN)
Market Direction(daily): long for some, flat to reenter long for most
Options (RUT): September positions will die gracefully now. For October, no change: call options are placed above 875 for 100% safety otherwise 810 is very safe. I personally think 790 is more than safe enough. Puts below 680 to me are technically safe but could cost too mush if market falls further, so should safely stay below the 625 line.

Last week post tried to show the dynamics of price jumps with possible expectations around salient resistance levels. It's like watching pole vault at the olympics. Again the 750 level proved too high, the good thing being that we realised it immediately monday morning. The mid week update was more that necessary in these times of high short term uncertainty.

EURUSD: The US$ hit our target almost spot on (we have a [1.393-1.391] target range) as mentioned in our daily market report and I also gave indication of the following bounce with a first target to above 1.404 which was then passed. We're probably now on our way to the much awaited Fib retracement (see chart). We have a target now just above Friday's highs (1.4235), or possibly a little higher (just above 1.435). The possibility of a full retracement to ~1.47 is very remote at this stage. Energy is not conducive to thinking this is more than a short term technical retracement at this stage.

60mins: congestion, hesitation
We've seen 705 acting as a strong support to the high end of that price segment around 719, but it is still difficult to say whether it is ready to jump to the higher segment to 735, and 750 looks even more remote. We are therefore more likely to see a congestion period with prices possibly drifting again. Shall we see ER test the pivot level to go higher or go lower, test it as as resistance to then reach lows again...? That's what a pivot level is all about so we'll eventually follow a lower time frame for that purpose.

Daily: much ado about not much
Last week's post expressed how unconvincingly ER was approaching 750, so the rest of the week was almost no surprise. Now despite seeing good looking bounces on 705, it seems drifting could continue, at least to 705 again (also a Fib level) or even around 690 (MM+Fib). Obviously we'll watch the 60mins chart first in case we stay above the 719 line, to me unlikely to hold.

Weekly: very weak upper bias so still same trading range for now...
Again, one could almost just paste last week's post. 750 proved too strong and sellers are now trying to push the market into another cycle it seems. Yet, one should not fall into bearish thinking too quickly. There is a high volatility at the moment, but it is a matter of a little patience until we see energy aligning itself i.e. chaos settling a bit. Again we'll watch lower time frames carefully to determine market direction maybe next week or the week after.
We could indeed still see ER testing range boundary to that difficult breakout to the 780s... or of course, buyers giving up until we hit this year's lows again. Fortunately that scenario still looks less likely to happen.

ER / ES / EURUSD for Sep 11th '08

You will have noticed the mid week update posted on the public blog yesterday.

Now for today:
ER2: bounce on 705 as expected (see yesterday's post on MarketSnapshot) but we are now in the segment below 719, and we could test 705 again or even 688 later on. We're however not in bear mode and a recovery is still very much possible at the end on this congestion period.

ES: looks pretty bearish right now, but we'll still give July lows a chance to hold. ES should try and stay above 1222,and even pass 1250 again to reassure the markets.

EURUSD: We just reached our target at 1.393, so this is certainly the easiest market of all at the moment. We're looking at a next target at 1.384 then 1.374 eventually. EURUSD is obviously very very oversold right now so we'll tighten our stops just in case.


(SORRY... POSTED ON THE PUBLIC BLOG INSTEAD OF THE PRIVATE ONE)