Two weeks to XMas ! :)

A little more calm, a little more visibility at last. To the point to wonder whether an update today is necessary.

EURUSD is still hovering near the high of its range and will eventually break out on the upside, maybe today, maybe within a few days. There isn't much energy right now, so a pullback to 1.275 is always possible, otherwise €/$ will just creep higher to high 1.31s then within a few weeks (days?) to 1.37

ES completed its Fib expansion pattern and is naturally pausing a little. However, despite lack of energy here as well, there is more and more indication of a testing of 1000 within a few days. Does that mean it will go higher still then ? Well... the market needs more vitamins then. Certainly not visible right now.

ER follows the same pattern and now has 500 in sight.
The bias is up anyway, so let's just sit back and wait until a target comes up automatically from our indicators (yes... getting a little lazy ahead of the festive season... )

Good trading day to all
bv

Christmas shopping...

Good market reading again yesterday with €/$ reaching our target (1.29395) then retracing a little. Same with ER2 which hit a high of 484.50. Can't do better than that... :)
ES also attempted a breakout and even passed 900 for a while.

So, what's in store for today ?

EURUSD is pausing on resistance level and could retrace a bit (Fib), yet the trend is now most probably up. After the initial pullback, we will wait for confirmation of a range breakout above yesterday's highs.

ER should also see some minor profit taking today which will provide good entry points. ER should test 500 within a couple of days (Fib target ~490, then ~515).

ES was inches away from stall level around 920 and is now gathering energy to reach the next 936 target. ES is certainly lining up to 1000 within a week or two.

( posted 12:30 AM - screenshots available on request )

Weekly Report on ES - Dec 8th to 12th '08

Something is brewing here... After another very volatile week, ES is attempting a recovery (breakout).

ES 60mins:
What an amazing recovery on Friday afternoon !!! Despite the 875 level which should normally be tested for support we do have some evidence of a potential runaway situation. It is a difficult environment and to be honest, I myself have been rather following 16K and 32K volume charts lately. Alternatively, a lower time frame is recommended. We will also make sure we take trades in the dominant trend given by a higher time frame.

Daily: breakout situation
We do see signs of a recovery in the MTFS yet the pattern is not indicative an easy ride up so we should see a pullback possibly on 875 key level to provide enough energy to takes prices higher then. For the time being, we have to pass recent highs inches away from 900. Should those highs be passed, we'll check Fib levels on the way to 1000, but we'll remain very cautious in this volatile environment.

Weekly: a blue bar !
Yes, like for ER, even if Entropy hasn't bottomed yet, even if MTFS is about stuck in oversold territory, even if Swing is desperately down... we have a blue bar ! It obviously doesn't mean much but we can get ready for a forthcoming turnaround. Oh well, we all know a swallow does not make a summer, but we might have a good week ahead of us.

Daily updates will be posted on this blog.

(posted 2:20 AM Eastern)

Weekly Report on ER - Dec 8th to 12th '08

Dominant TF: 60mins with other time frames not far behind.
Swings: UP-UP-DN from UP-DN-DN (looking better by the day)
Market Direction(daily): staying long.
Options (RUT): put spread.

Last week i mentioned markets would be up overall and yet quite volatile. The situation is about the same now, except maybe that bigger players are ready to move in now more convincingly. We'll see that we still have a lot of volatility ahead, but the change in mindset we picked up last week will be more and more visible.

EURUSD: €/$ is now aiming at 1.288 then 1.293. It could crawl higher even if ever so slowly, and despite the high volatility, we keep our target at 1.37 in January. Over the medium term, we however do have a trading range with a pivot level ~1.27. We'll watch cautiously for higher support levels to confirm the current upper bias.

ER 60mins: aiming at 484 (stall level)
ER is more or less back to the same price area we saw early last week, and the same target around 480 is still valid. We however notice swings being way to steep and MTFS reaching extreme levels again. We don't anticipate a smooth ride to 500 and consolidation will be necessary during the course of the day.

ER Daily: looking better
Even if our long position has shown a pretty shallow take-off, we're believe that ER should reach its first target levels (480 then 500) where we will cautiously tighen our stops. We have a potential channel breakout and Entropy has clearly bottomed. MTFS however reminds us to be cautious, probably indicating some difficulty to pass our first resistance levels on the way to a clearer recovery. If 500 is passed and tested for support, we will update our targets (Fib/MM).

ER Weekly: bottom ?
The weekly chart shows little change from last week. Entropy hasn't bottomed yet, so we'll wait for another week or two at this time frame to see current prices stabilize. However we do notice a blue bar at last and a MTFS while still not looking great shows some upward inflexion now. We do still believe the worst (~380) is behind us but we may (and probably will) see some retracement when our first targets (daily charts) are hit.
Behaviour on that key target area [480-500] will however determine market direction for at least 4 to 6 weeks. We do start plotting Fib target areas in case of a breakout. We are not at a decision point yet at this time frame, so we'll have to review our scenario next week.

ON ACCOUNT OF THIS EXCEPTIONAL MARKET SITUATION, DAILY UPDATES ( --- EXCEPT FOR TOMORROW TUESDAY --- ) WILL BE POSTED ON THIS PUBLIC BLOG THIS WEEK AGAIN.

(posted Monday 2:50 AM Eastern)

Patience...

Always good to see that my good old crystal ball is still working as new... :)
€/$ bounced exactly on my support level, and a fantastic long followed right to top resistance level. Former resistance level i should say as range is now expanding north. €/$ should consolidate just above 1.27 to then march higher probably to ~1.287
ER also crept higher, although unconvincingly, so the following retracement was very much expected. Here again we are looking at a support in the current area although we'll keep an eye on an alternative support around 423 if 437 breaks.
ES was kind enough to behave and reach spot-on our resistance level before retracing. It could try and reach ~870 again to attempt a breakout north. Conditions don't seem right just yet though, but we'll be watching.
More likely is a continuation of our market consolidation. The market is almost ready to recover so as always patience is a virtue...

(posted Fri 5th 12:24 Eastern)

One day at a time...

OK, yesterday was a bit of a toss of a coin on pivot level, and it could really have gone both ways. The market chose to go up (that was my smart guess also), even if this still looks rather unconvincing. Volatility is still very strong and coud cause more wild swings in the coming days.

EURUSD is certainly looking bearish, so we'll keep this as a sign of more deleveraging and flight to safety in progress, even if the logic would be for the $ to weaken eventually. In the short term, 1.256 - 1.257 is a strong support level.

ER still has some upward potential and could crawl back to latest highs, yet energy isn't quite there so volatility can still play tricks. So let's see if we pass our resistance level around 451
ES follows a similar pattern, and also has a strong hurdle along the way to recent highs. Indeed Fib and MM levels show a resistance level around 873 to 875.
We'll therefore be very cautiously positive today.

Where's the Christmas spirit...?

Sorry i missed some action on Monday. I spent about 16hours in a plane and Internet above 30000ft when available is outrageously expensive.

I remember saying we should not pay too much attention to the rise late last week. ER rtraced a little quicker and stronger than anticipated, but we all know volatility exacerbates movements and support was found close to Fib PR2 above 410. Similar scenario for ES. So, what do we read now?

The 60mins chart shows a mild bounce potential. Swings have high gradients which are hardly ever stable, so we'll now watch ER's behaviour around this pivot level (~440). We can have a Fib pattern going both ways. We should see soon enough whether prices go north or south from here. The upper bias over the next few days is our favourite scenario for now if the daily chart gives us a blue bar today. The target over the next few days would then be the low to mid 480s again, and also more visibility ahead. In the more pessimistic scenario, we are looking at low 400s, then 380... Quieter markets ahead of the festive season would certainly be much appreciated...

Weekly Report on ES - Dec 1st to 5th '08

ES 60mins: stretching resistance level
Same dynamics as for ER although a little more contained. It is difficult to say whether one should take volumes too seriously for the 2nd part of last week as it seems ES has been gliding a little too high and may fly through a air pocket now. Despite being overbought, we foresee no change in the overall bullish sentiment. We just have to check where support will be tested, possibly in the 875 area, or a 1st Fib level below.

Daily: not looking too bad now at last
Obviously the MTFS recovery is a big question mark but a channel breakout could trigger some buying to the 1st Fib level (~960). We do not anticipate it just yet and some consolidation is more likely. Again, even if the worst is probably over, we shouldn't too bullish too quickly at this time frame at least.

Weekly: inches away from Fib target.
Here as well, one should certainly NOT aim at a quick turnaround and start buying frantically already. The situation is similar to the daily chart i.e. bearish and at the same time very oversold. Like for ER, we shall wait a couple of weeks and maybe until January to confirm a reversal even if we do not anticipate more than a crawling back to former higher over at least one year.

NB: NO DAILY UPDATE TOMORROW TUESDAY

Weekly Report on ER - Dec 1st to 5th '08

Dominant TF: 60mins with other time frames not far behind.
Swings: UP-DN-DN from UP-DN-DN (is the worst behind us ??)
Market Direction(daily): staying long.
Options (RUT): put spread.

Last week was short but bullish nonetheless, and we are definitely seeing a possible change in mindset, at least justifying trying going long. ER is now aiming at 484, last step before attacking 500. Let's see whether we have a good plan of attack, with a first look at €/$.

EURUSD: €/$ reached a target we gave last week, and could have then tested further levels, ~1.33 etc. It instead stayed in the same channel, hovering near a support level around 1.27. Indicators are not showing much energy just yet, even we reiterate that the $ must weaken eventually (weekly chart). We will therefore watch the daily channel as well as the price segments. €/$ can indeed crawl back to last week's highs or break current 1.27 to test October lows again. At the moment, a first bounce is likely, until energy picks up to weaken the $ over current resistance levels.

ER 60mins: aiming at 484 (stall level)
At this point in time, and maybe due to the short week, energy seems to be lacking to take ER much higher. We do notice the ~380 lows have turned to very strong MM support level. Pivot level (~440) held for a while before the long weekend, but weaker volumes may indicate that that same pivot level could be tested again for support later on. For the time being we still give the upper bias a chance to hit 484 before retracing.

ER Daily: looking better
we had our entry point last week with a controlled risk as we placed our stops below recent lows. Our indicators do show a definite change in market sentiment so while volatility is remaining high, we are slowly turning bullish (Entropy bottomed up and MTFS show positive gradients in oversold territory). We are here also aiming at 484 then 500 as test levels going forward. Again, we do not anticipate a smooth ride and a return to the 440s or at the very leat the lows 460s is quite possible.

ER Weekly: bottom ?
Entropy could bottom soon if we project current trend (1 week or 2). However we don't have a MTFS conducive to a decisive recovery yet. For the time being, we'll follow the scenario of a weak bounce. We may have some XMas buying or a January bargain hunt once 2008 books are closed out. Conservative long term players should at least wait for a blue bar at this time frame.



ON ACCOUNT OF THIS EXCEPTIONAL MARKET SITUATION, DAILY UPDATES ( --- EXCEPT FOR TOMORROW TUESDAY --- ) WILL BE POSTED ON THIS PUBLIC BLOG THIS WEEK AGAIN.

(posted Monday 1AM Eastern)

How do I read charts ?

No report today. The market behaved as expected yesterday with a bit of shopping spree, maybe indicating the worst is definitely over. We will review that in detail in the weekly report.

Today, I decided to instead just post a commented ES chart for those a little more interested in the technique itself.

Enjoy the long weekend,
bv

I can smell the turkey baking already...

A quick note to readers and users of this TS-TT:
Please tell me about your trading, how you use this report, how successful you are with it. Most non-users take it as context information and make money filtering their own trades with it. Obviously, it is only a daily snapshot, and it is not as good as seeing it live. The reason for this question is that this technology will eventually be sold during the course of 2009, and only users who have expressed interest stand a chance to be listed as exceptions to the license's exclusive rights. Anyway, we still have a few months ahead of us.

Let's have a look at our charts:

EURUSD: The pause announced on 1.295 resistance level lasted about half a day after which € charged in to test a stall level at 1.306. Next resistance level is 1.318, but energy is now lacking a bit. As mentioned on the weekly report, there is now a definite change in mindset and the $ will certainly weaken (is deleveraging coming to an end...?). For the time being €/$ stays in a channel (60mins) and should eventually reach 1.306 and then 1.330. Lack of energy and volatility make it however difficult to detect retracement points along the way.

ER: The resistance level mentioned yesterday is still there, and despite some minor profit taking, ER has proven quite resilient. Here again, energy starts lacking so there is a good chance of erosion. Maybe a good chance to try and enter long on aggressive limit orders. With a bit of luck, one can maybe enter long below 420 within a day or two.

ES: Again, very similar situation. ES found enough impetus to go test the 875 resistance level (yesterday's high of 874 to be exact). Here too, the change in mindset is obvious, but we can also try and enter agressively as we have a typical "failed recovery" pattern on the Daily chart, so a retracement is almost already written. ES may possibly hover high still, but it should eventually retrace to the high 810s, low 820s before breaking the channel and travel to 1000. Obviously, we'll also play the channel breakout if the retracement proves too contained.

Crystal ball

Again, it is interesting to see how accurate a scenario can be with however that same caveat of volatility acting as a time compressor. Oh well, it is a daily report, so users of our technique will obviously adapt to lower time frames, and others can always contact me for custom market analysis.

EURUSD: We saw that bounce to 1.27, which broke easily, so we stayed long to the next very clear resistance level at ~1.295. It is a resistance level which could break later on even if a pause is likely today. We'll provide new targets tomorrow.

ER: A similar story in a way as i announced the 440 target without fully anticipating it could be hit the same day. We do have an upper bias in the short term but profit taking is likely. The high 430s area is a substantial resistance for now, and even if we go higher over the next few days i.e. ahead of the long weekend. A retracement is more than likely so long term players do not have to rush into the market just yet.

ES: Very similar situation with a resistance level around 850. ES is short term overbought so should pause on its way to 875. Again, this is short term play, and not a motivation to buy frantically just yet. ES will retrace to the 810 area at some point.

(posted ~1AM Eastern)