Bloody monday...

Oh well, didn't i say yesterday it could only go down... On ER i dared mention a possible target of 577 without thinking it would be reached so quickly. On ES i gave a target of 1065 which was reached in the 1st hour of trading ! Defeats the point of a so called weekly report, doesn't it? Remember: Volatility is a form of time compression in itself.

So what's in store for today, considering the above.

EURUSD: same down channel for now, yet levels haven't yet changed. In the short term, €/$ should try and stay above 1.355 but there is still a long way to go to break the channel upward and there may be a few interest rate cuts here and there to shake the system a bit. Sticking to short time frames is therefore most recommended.

ER: is the worst over? maybe, but again we have to go through a 2nd hangover period and no substantial recovery in sight. We need a sort of double bottom of cup & handle to confirm yesterday's lows as a support level. Short intra-day time frames should be good fun though. If anything, pick the top of this wave and sell short again in the dominant trend. Staying on the side line until volatility subsides is also fine.

ES: Same situation. Yesterday ES fall stalled... on MM stall level, so it's good to see indicators still responding fine in this mayhem. Now, same diagnostic with a similar need for a confirmation of a bottom.

There are lots of bargains in the market right now, and this shake-up will only eliminate the weaker ones...

Believe it or not, markets also follow the laws of Nature...

(screenshots available on request)

Weekly Report on ES - Oct 6th to Oct 10th '08

Dominant TF: weekly, 60mins with Daily lagging behind
Swings: DN-DN-DN (from UP-DN-DN)
Market Direction(daily): short or preferably flat. Following intraday time frames is most recommended, but staying on the side line is fine too.

I wish i could be more optimistic than last week, but the outlook is still negative. It seems that the maket is looking for a bottom even if the worst is technically behind us now. The accumulated mistrust for the several shocks coming one after another will take a loooong to time to digest, and we therefore see no immediate bounce after the bottom is found (1065?)

ES 60mins: a tad too slow to trade in this mad market
Same as last week, we recommend lower time frames here. We can still use this time frame as context, with a target on 1065, i.e. still quite some room downward...

Daily: where is this going to end?
In this high volatility bearish market, we try and pick our targets and it seems we have a good consensus around 1065 - 1070 (MM - Fib) All indicators are pointing down but we'll keep a close eye at our target range now.

Weekly: no mercy...
Negative bias here too of course and a high probability that the market needs to test a bottom quickly. 1000 is now in sight but we have a convergence of targets around 1060 here too which we will have to hit to exhaust sellers, hopefully for good... As said before, the hangover may last quite a while, so i see no rush to really go on a "shopping spree" after the market has settled.

ON ACCOUNT OF THIS EXCEPTIONAL MARKET SITUATION, SNAPSHOT UPDATES WILL BE POSTED ON THIS PUBLIC BLOG THIS WEEK AGAIN

Weekly Report for ER - Oct 6th - Oct 10th '08

Dominant TF: Daily (we notice a drop in significance level on the 60mins chart)
Swings: DN-DN-DN from UP-DN-DN
Market Direction(daily): short of course, but staying cautiously away isn't a bad idea either.
Options (RUT): better wait for the end of the storm here too.

Last week monday, i warned again that we couldnt see the end of it, and i have to say the bottom is still to be found even if it may at last occur this week now that the bailout plan has been approved. Certainly not visible yet, but chances are that prices would settle soon. A number of banks and financial institutions are now ready to go shopping for bargains.

EURUSD: crazy week for €/$, which we followed fairly accurately on shorter time frames. Yet, volatility still surprised us with targets hit much quicker than anticipated. The 1.3672 level was broken in short time frames indicating a possible target on 1.3521. We'll be QUITE careful though as the € could also bounce strongly. It certainly looks possible on longer time frames.

60mins: drifting down again
Where and when is this fall going to stop ?? 625 looked like a very reasonable support level and breaking it now opens the way for a seriously bearish market. Are we really now targeting 577 ? Only a quick bounce early in the day would keep the 625 level valid.

Daily: down !
Tiny chance of a support level around 610, but is this wishful thinking...? All indicators are down, and looking for a support level right now in such a high volatility environment is ludicrous. Again, either carry on trading short time frames in the direction of the daily chart, i.e. short, or stay on the side line for now

Weekly: market crash... there is no other word for it
While 625 is not "officially" broken, it is not looking good.
We'll give it another chance this week still, as the market could digest the bailout and volatility settle a bit. This headache must stop first.

ON ACCOUNT OF THIS EXCEPTIONAL MARKET SITUATION, SNAPSHOT UPDATES WILL BE POSTED ON THIS PUBLIC BLOG THIS WEEK AGAIN

Bottomless ?

At least EURUSD is going exactly where anticipated. It reached our 1.381 target and could find a support at this level. We can't however dismiss the possibility of testing 1.36720.

ER: Aiming at 625 although it could bounce on stall level here around 640. Down pressure is certainly too strong to expect any recovery soon, unless of course another exogenous shock abruptly changes dynamics.

ES: Trying desperatly to find some support around 1125, the market would otherwise shed more... In case of breakout, target would be 1072.

Conclusion: again & again, same as previous days i.e. have fun on short intraday time frames or go enjoy indian summer. No rush to get back into the market.


NOTE: Sorry but won't be available this Friday. Back to normal on Monday

Mid Week Update

Markets are still in 'hangover mode' with a US$ strenghtening. The target range given yesterday [1.381-1.384] is still valid. There is some support on 1.391 in the short term, but the € could even hit 1.3672 within a week.

ER: You will notice i was spot on yesterday. Slight upper bias could take ER unconvincingly a little higher, even to pivot level in in 680s. This does not mean in the least a recovery and the same congestion/volatility yo-yo situation is still in place.

ES: Retraced quite a bit in pre-market but ended around the 1165 area again. If passed, ES should normally test low 1180s. However there is still little energy in the market and any adverse news can stall this upper bias.

Conclusion: same as previous days i.e. have fun on short intraday time frames or go enjoy indian summer. No rush to get back into the market. It will still be there where you're back from holiday.

(snapshots available on request)

Crazy Tuesday

What a day again... we all wonder whether we'll all have more of those... great for intraday trading, and certainly not so on the daily time frame.

Yesterday was a good day for the US$ which easily broke the 1.416 pivot level. We're now back at testing the 1.381 - 1.384 levels on EURUSD over the next few days (or less...). Obviously nobody sees a strong US$ in the medium term but we'll go with the flow as always...

ER: good recovery as hinted yesterday. We also notice our price segments still work after bouncing on 656, to reach 688, i.e. 2 price segments. Another down day is likely until this yo-yo calms down along with volatility. We could get back to the low 670s today. We anyway need to go through this hangover period before going solidly up.

ES: similar situation here except that ES didn't have enough steam to even test 1188 (was a good day though). 1165 is an important level, and ES is unlikely to hold it so here again another down day is expected.

Obviously bailout news will impact volatility again, but it seems market participants have had enough of it, and we could see markets behaving a little more normal in a few days... yet again 3rd quarter results may spur more nervousness again...
Daytraders have more fun ahead, but more conservative long term investors need more time to test the water.

(snapshots available on request)

Black Monday

Yesterday again I warned to be cautious and even to stay away from the market. Intraday trading was about OK in the morning but prone to execution problems.

What can we expect for tuesday?

ES: prices found some support on 1125, the MM level even if penetrated, can be regarded as holding. Having said that, it is clear that a LOT of uncertainty remains in the market and a lower bottom is possible (1070?). After yesterday's shock, a technical bounce is likely even if not visible yet.

ER: Same - Despite the bloodshed, it seems there is also a support level here (656 on MM, 645 Fib), and also a lower stronger level at 625.

Again, I recommend staying on the side line until volatility comes back from stratosphere.
--- DO NOTE HOWEVER THAT THE MARKET COULD THEN ALSO QUICKLY GET BACK TO RANGE HIGHS ---

Weekly Outlook for ES - 29 Sep to 3 Oct '08

Dominant TF: weekly, 60mins with Daily lagging behind
Swings: UP-UP-DN (from UP-DN-DN)
Market Direction(daily): short or preferably flat. Following intraday time frames is most recommended, but staying on the side line is fine too.

Oh well... true, i saw a 2 segment retracement to 1219 before monday last week, and to no surprise, volatility brought it down even further to tease the 1180s again. The good thing is that the 60mins chart always responded nicely. Lower time frames behaved like a charm too. Now what to expect? We'll stick to a still negative bias overall with a high probability the worst is behind us. Does that mean a recovery is under way? If so, it is still well hidden.

ES 60mins: stil range bound
Again we recommend lower time frames here. on this chart, we'll watch the 1219 resistance which could at last open the way to 1250. Until then, we can only expect more of the same uncertainty... We've got a slight upper bias for now, so we may have not to wait too long.
(UPDATE 6AM: bailout finalisation is jittering markets again - Will post a new report later today when support is visible - Could return to recent lows )

Daily: ? ? ?
Entropy is improving but no clear pattern otherwise, and this until the 2 spikes are fully digested. I would recommend waiting a few more days for volatility to reduce. Bars are still yellow after all, and so do not express any strong recovery yet.

Weekly: Congestion to lower for now
Still some negative pressure here despite higher lows. The market may congest below the key 1250 level which remains crucial to a long term rebound.
The market could certainly stay in "hangover mode" for a while...

Weekly Outlook ER - 29 Sep to O3 Oct '08

Dominant TF: 60mins, Daily, then Weekly (shorter intraday TFs recommended)
Swings: UP-DN-DN from DN-UP-UP (from UP-DN-DN the previous week) expressing how hesitant the market is at the moment
Market Direction(daily): flat
Options (RUT): Vega is sky high but no change to our condor positions.

Last week I cautiously warned to wait for the drifting to stop on a strong support level. We've touched it now at 688, exactly where anticipated, yet we have no indication of a solid recovery coming in the next few days. I even doubt any news from Washington DC can really bring confidence in the market in the short term.

EURUSD: €/$ is also hesitant with $ making some gains to a target level around 1.457 that was quite visible in intraday charts. On our time frames, there is a chance 1.464 acting as a strong resistance in the short term and $ then making further progress. In absence of shock, congestion would be the favoured scenario. Knowing the bailout plan is about to be finalised, a shock is inevitable and a breakout either way is possible. I shall again revert to a 233/610/1597 tick charts until we retrieve some visibility.
(UPDATE: Monday 1AM Eastern - the breakout occurred on bailout plan approval. Support level is now 1.4404)

60mins: congestion - slight upper bias
After bouncing on 688, ER reached the highest boundary of this price segment, the next one possibly taking prices to 719. Yet, we have no indication of much energy capable of taking ER to the high 710s, and certainly not higher than the next segment boundary i.e. 719,(again unless new surprisingly positive information on the bailout plan shakes current dynamics).

Daily: better stay away from the market for now...
Despite the high volatility environment, this is still a drifting environment we're having at the moment. The good news is that 688 may be the support level the market needed, the bad news being that there is no real buying at this stage yet despite the trading restrictions. ER could therefore congest with some price bursts here or there until volatility subsides.
We'll gradually watch Fib retracement levels being passed and eventually wait for 750 to be tested again to celebrate...

Weekly: congestion - HIGH volatility
After 2 extraordinary weekd in terms of volatility, we'll watch the market calming down and 750 being passed to ge back into it.
Obviously, it's not so bad for condor players like us at the moment despite the sky high vega. It may sound a little too early, but one can start thinking about tuning positions a little more delta positive.

End of another wild week...

Hello again,
Yesterday's general comments are still valid, i.e. shorter time frames are recommended as our visibility of 3 to 5 bars may sometimes be reduced in times of high volatility even if the outlook is overall correct. For instance, if we analyse yesterday's movements on ES, charts expressed an upward movement (strong open), yet the first 60mins bar closed around the upper boundary of our price segment (~1205), we then saw an excursion all day to the top of the price segment above to even reach the mid 1220s. ES closed lower and even lost about all gains in post market trading.
This is typical of a high volatility environment, but this warning should not affect our outlook overall. The general market dynamics stay the same.

EURUSD: We spent the day on shorter time frames where we watched the 1.464 level being tested over and over. We updated our support to the 1.4557 MM stall level very close to yesterday's lows. The bounce brought the €/$ more or less where it previously was and we now expect much of the same today with a slight upper bias.

ER: Not much movement here. ER tried to move to a higher price segment, but closed the day hovering at the boundary (~704), and sank in post market. We therefore expect a continuation of the same drifting situation and anticipate the market to test a strong support level. At the moment we canonly hope 688 will be that one. Again, it will take a long time to digest the current volatility.

ES: Same situation with the same ongoing drifting looking for a support level (1188 for now), and hoping for volatility to subside at these time frames. The hangover period is probably going to be very very long and we again recommend moving to lower time frames or stay on the side line for now.

(snapshots available on request)

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)