Weekly Report on ES - Dec 15th to 19th '08

Last week's report may have sounded confusing in a way as i clearly indicated a breakout situation while a pullback was also expected. Volatility indeed exacerbated swings on 60mins and lower time frames, and the retracement actually reached PR2 to the 840s even if i thought 875 could have held (it was a strong MM /Fib level).

ES 60mins: despite a fantastic recovery on Friday, our indicators show a possible exhaustion hence the forthcoming high should be lower than most recent ones, at least until new energy is added. We therefore anticipate a pause on the way to low 900s, possibly gathering strength on 875. The swing gradient also looks way too steep to be stable.

ES Daily: we could be tempted to discard the last red bar as it closed near bar friday's high. MTFS line separation is also generally indicative of a lack of underlying forces to carry prices much higher. The bias is however still up and one could see ES hover or even rise a little still. Having said that, a retracement will be necessary at some point this week.

ES Weekly: Entropy has now bottomed so we know prices are likely to recover even though in the usual seemingly chaotic environment. MTFS shows an early crossover, a blue bar and a recovering entropy could all lead to a scenario where price would head to 1000 (Fib + MM) by early January. We however don't anticipate that key level to be passed unless MTFS evolves into a more bullish pattern by then.

Weekly Report on ER - Dec 15th to 19th '08

Dominant TF: 60mins with other time frames not far behind.
Swings: UP-UP-UP from UP-UP-DN (please note a slight modification in swing display)
Market Direction(daily): staying long.
Options (RUT): put spread.

While our outlook proved certainly right, we have to admit that volatility played tricks on us again last week, thus confirming the need for daily raport updates, and positions adjusted accordingly.

EURUSD: last week's reports could not have been moe accurate on €/$. We advanced the move cautiously as the daily range could have held longer for another cycle. We are now on a short term resistance level which could slow down the current rise to ou 1.37 target. Profit taking is indeed expected down to the low 1.30s this week before marching higher. Having said that, the bias is still up so we'll wait for a confirmed downturn on the 60mins chart.

ER 60mins: quite volatile indeed with a dramatic bounce on Fib/MM on friday as expected. ER is now heading towards Fib expansion target in the vicinity of the MM stall level (~490). This is also a range high where prices could certainly pause.

ER Daily: Energy levels seem to be weakening ahead of 500 resistance level, here indicating again some hesitation. However the channel is confirmed broken so we can assume Fib PR1 will be hit this week. We shall however remain cautious about volatility spurt on coming triple witching day.

ER Weekly: Entropy has finally bottomed which is good news, however the MTFS pattern seems to indicate a difficult bumpy recovery even though last week ended on a blue bar. 500 and Fib PR1 ~530 seem close enough but those levels are unlikely to be passed in the short term.

Adrenaline rush...

What did i say yesterday !?!? i sometimes think my crystal ball is worth millions...
€/$ broke out quite strongly and rose about all day. Not a single red bar until 7PM !
A retracement, even if quite mild is now necessary to 1.32, or possibly to 1.3075
We can see that a provisional Fib Expansion pattern would take EURUSD to the highs mentioned recently. Let's wait for support for now though.

ER: we turned to lower time frames as it hovered almost directionless on the 1H chart. WE have now retraced to a strong support level around 440 (MM + Fib) where it could and even should bounce. I have told several times on this blog that we are not heading for a smooth recovery (weekly entropy has not even bottomed yet), so we'll stick to lower time frames or remain very cautious.

ES: similar story... I thought yesterday 875 would hold (MM + Fib) but the market decided to test Fib PR2 from which it could and probably will bounce back. We'll remain cautious until that support level is firmly tested (check MTFS pattern for confirmation)


Great trading to all and see you monday for the weekly report.


(posted 1:20 AM Eastern)

Where is the US$ going ... ?

Same easy ride, with €/$ now reaching its target around 1.305. This is the high of the daily range so some profit taking is possible. Again the change in mindset is now visible and a range breakout could lead to 1.37 in a matter of a couple of weeks. We need to check behaviour on this key resistance level. EURUSD could retrace to 1.2966 or right down to pivot level to 1.293 which looks like a much better support level to then take prices higher. At this point in time (12:30 AM) bias is still up.

A daily range of 17 points for ER almost looks like a calm day. We do see a mild upper bias, with prices hovering relatively high but could still go both ways. Maybe a good time to tighten stops.

Exact same scenario for ES where we now see some hesitation after retracing up to the Fib PR2 level . We maybe need now a pullback to 875 to then attack the high 900s. Overall the bias is still up so one should just hang on and safely move stops to just below 875.


--- QUICK UPDATE 12:45 AM ---
€/$ seems to be breaking out already

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