EURUSD Chart: a quick update from last wednesday's snapshot

It certainly wasn't exactly the easiest exercise to predict EURUSD over the New Year's break, but i did nonetheless give it a shot, and again i have to admit that i somewhat underestimated volatility on my Wednesday morning chart. I gave a recommendation for a low potential short which proved more than OK as EURUSD is now reaching its target on pivot level (Daily chart). AN OVERALL VERY GOOD TRADE !
It will now be very interesting to see where it will find enough support (probably around current levels) to then bounce back (the weekly chart still points upwards).

Obviously, this kind of report remains a little off-topic as it concerns mostly those who do run the toolset locally on their machine.

Happy trading,
bv

Weekly Report on ES - Jan 5th to Jan 9th '09

ES and ER are certainly largely correlated hence it is always worth reading both reports (ER report just below). However information is sometimes clearer on either ES or ER.

Last week, i mentioned prospective Fib targets without realising one minute we could be there already... Yet, recovery may be relatively limited in the medium term (longer time frames).

( NB: we here also post a volume chart to show how clearer the picture is here. Our indicators work like wonders... )

ES 60mins: Upper bias is still there despite our targets having been hit yet, a slowdown looks necessary even if we don't see it clearly just yet. It may happen near the 937 pivot level and we might want to take a look at volume charts for accurate targets. At this time frame, we certainly remain long for now, with stops tightened a bit near close Fib retracement levels.

ES Daily: We here have the same hesitation as with ER with the MTFS white line going its way as a frontrunner without much support. We may therefore end up with some retracement or return to the same channel. We'll however give the current upper bias a chance particularly if volumes start coming in. As a matter of fact, we do again recommend long volum charts like 32000V for a clearer direction.

ES Weekly: No change from last week AGAIN, and similar to ER: Swing is up and Entropy has bottomed yet MTFS is not too bullish so one does not anticipate any significant take off, and after all one has already enjoyed a significant 25% recovery since recent lows, so a pause and some profit taking would be quite in order.

Weekly Report on ER - Jan 5th to Jan 9th '09

Dominant TF: 60mins leading, with Daily dropping lately.
Swings: DN-DN-UP (hesitation on peak)
Market Direction(daily): cautiously long

Since this weekly report is always based on the daily chart, i wish to remind readers that visibility on that chart is generally limited to abotu 3 bars, sometimes more, often less, particularly at times of high volatility. This last week was special also on account of the mid-week break, low volumes and the usual "window dressing" with portfolio managers adjusting positions for reporting on Dec 31st and Jan 2nd.
Again we warned that the 60mins time frame (as well as lower intraday in fact) was the dominant time frame so we picked up the nice up move on Friday.

As usual let's start with the outlook on EURUSD:

EURUSD: the 60mins chart does no longer give us clear indications except maybe the continued hesitation around 1.39 with a strong support level only weaking a little to pivot level. Technically this only tells us that the US$ could bounce from here... or gain further ground. Should it go that way, we already have a prospective Fib target which corroborates a scenario of a lower support level on the Daily chart. On that chart, Fib retracement level is around 1.38 and MM pivot level a little lower. Obviously we always prefer when they concur, but the general trend is there. Furthermore, the MTFS pattern indicates a "slow landing" near current levels although it could later on also turn to "erosion". In such case, support would be even lower. The Weekly chart is still moderatley bullish.
One could see the current dynamics motivated by expectations of ECB cutting rates mitigating the fall of the US$ in the coming couple of months.

Now back to ER:

ER 60mins: This nice ride to 500 wasn't visible when the week started even if we had a possible Fib target around 510. 500 remains a strong psycholigical level where we see energy weakening a bit. We don't see any significant retracement coming right now though. MTFS indeed shows some resilience in overbought territory. A drop to first Fib level below 490 is however possible.

ER Daily: Similar to last week, we are a bit uneasy about the configuration with the MTFS white line going its own way, with little or no support from the rest of the troop. Are we going to see the green and brown lines rallying or will the frontrunners run for cover...? Such hesitation is understandable on key levels, particularly after a period of low volume. So again, we shall remain very cautiously long here.

ER Weekly: No change from last week AGAIN (cf. reports Monday 22nd and 29th). Entropy certainly looks a lot better but MTFS had an early crossover generally indicating a failing recovery hence should pull back before going higher later on. Like mentioned last week, buyers can maybe wait a little longer, or enter preemptively on an aggressive limit price or wait for a consolidation and buy market later on.

(posted Monday 5th 7:50AM UK)

EURUSD Chart with commentaries

Here is a commented EURUSD chart for a change.

Today is however not a day to spend watching charts, so i wish you all a great New Year's Eve tonight...

Cheers,
bv

Apathy

Just a few lines in terms of market update today.
Volumes are quite low, impeding good market reading anyway.
Only EURUSD seems to follow patterns. It should hover toward the bottom of its current range i.e. towards low to mid 1.39s. The Fib target is actually lower, but again, on account of low volumes, difficult to say whether we will reach our target today.

Weekly Report on ES - Dec 29th '08 to Jan 2nd '09

ES and ER are certainly largely correlated hence it is always worth reading both reports (ER report just below). However information is sometimes clearer on either ES or ER.

ES 60mins: Upper bias with clear strong resistance on 875. MTFS pattern is only mildly bullish so if anything, we are very likely to see a test of that level as a support before going higher then. Our chart also provides prospective Fib targets (882, 900, 930) which should mark the way to recovery in January.

ES Daily: Prices have been hovering a little directionless lately, and MTFS is indicating some consolidation. It is however difficult to read markets correctly with such low volumes and the significance level is low. We shall therefore only reiterate how strong resistance level has been (~920) and rather follow action on the 60mins chart or even bettern on volume charts (16000V and 32000V).

ES Weekly: No change from last week, and similar to ER: Swing is up and Entropy has bottomed yet MTFS is not too bullish so one does not anticipate any significant take off, and after all one has already enjoyed a significant 25% recovery since recent lows, so a pause and some profit taking would be quite in order.

Weekly Report on ER - Dec 29th '08 to Jan 2nd '09

Dominant TF: 60mins leading, with Daily dropping lately.
Swings: UP-DN-UP from UP-UP-UP (range bound on the 60mins chart)
Market Direction(daily): preferably flat, or tight stops at this time frame.

As anticipated, no action on ER last week, and such situation should persist this coming week. As usual, we'll start the report with our outlook on EURUSD which is a lot more exciting:

EURUSD: last week, we indeed saw a retracement to ~1.39 on Monday which quickly proved to be a very strong support, from which the US$ started weakening. Those who followed our recommendation to sell the US$ must be smiling. We probably also have had a bit of luck as the fall of the US$ may however have been exacerbated by lack of volume inducing the US$ to lose ground without much resistance. The long term trend is in any case clearly indicating a return to the high 1.40s (or even higher) but this last spurt above 1.41 should technically only be a short term spike before settling below or at the MM resistance level (~1.4146).

ER 60mins: ER has been a little erratic at this time frame, yet we still have an upper bias hence a breakout is always possible even if there is very little energy right now. Lack of volume can also make market reading a little tricky. Those who wish to trade intraday in equivalent intervals should turn to 16000V bars for instance.

ER Daily: At this time frame, we see buyers resting rather than actively besieging the 500 barrier. This is typical of this time of the year, yet we may see surprising moves this week. At the moment, the time frame is clearly not the dominant one and MTFS is very difficult to read so we'll remain on the sideline or very careful as the situation is definitely affected by lack of energy and lack of volume.

ER Weekly: No change from last week (cf. report Monday 22nd). Entropy certainly looks a lot better but MTFS had an early crossover generally indicating a failing recovery hence should pull back before going higher later on. Like mentioned last week, buyers can maybe wait a little longer, or enter preemptively on an aggressive limit price or wait for a consolidation and buy market later on.

Futility

We all have (or should have) something a lot more exciting in mind than charts today... Time to relax and enjoy quality time with close ones, people we really care for, so i won't bore you with market stuff today.

As mentioned previously, high volatility and low volumes make these daily reports almost useless anyway. OK, we've had another good day with tick charts. OK, those who have really nothing better to do today can keep going cautiously short, but we should rather have a thought today for those who are ill, left alone, cast aside, deported, powerless, oppressed...
With a special thought to you, good people of Zimbabwe...

cheers for now,
bv

On my way to the kitchen

You would have noticed my word of warning yesterday. Obviously the ongoing volatility again exacerbated the downward retracement, this making clear swings which were easy to trade in lower intraday time frames.

Now for today:

EURUSD: We have a Fib pattern forming, but little chance it fully expands in the short term. We have to wait it first breaks the triangle pattern, and there is too little energy right now. On the Daily chart, a retracement to Fib PR1 (~1.38) is technically our favourite scenario, but that target was almost hit on Friday already. Wierd movement, wasn't it ? It is now difficult to pinpoint where support level will consolidate this current retracement to then go higher. Maybe a good advice to stick to lower time frames.

ER: Retracement to Fib PR2 leads the way to a Fib expansion back to the 480s then close to 500. Somehow, it isn't clear yet whether there will still be enough energy to fight the level though. This time of the year, some traders may have the Christmas bonus in mind as an incentive, but most are by the fireplace waiting for warmer days. Longer term, i.e. early January? we should see some interesting action and behaviour around 500 remains paramount to determining market's mood.

ES: Yesterday's actual support level almost surprised us late in the trading day. We're now back to that 875 pivot level from which ES can really go either way. Since recovery happened with low volume, another look at volume charts is necessary here. Volume charts are great (32000V are equivalent to a 5 to 15 mins chart). Vol chart shows us an upper bias to 875, and maybe higher to 885 right now. Obviously they are not compatible with a daily report.
Again no indication ES will go much higher so long term players are better off in the kitchen preparing the turkey for now...

Have a great day,
bv

(posted 2:30 AM Eastern)

Weekly Report on ES - Dec 22nd to 26th '08

ES and ER are certainly largely correlated hence it is always worth reading both reports (ER report just below). However information is sometimes clearer on either ES or ER. This time ES can indeed provide some clarification.

ES 60mins: ES bounced twice near 875 which is an important pivot level. Yet dynamics are slowly turning a little bearish so ES could certainly test it again, to possibly bounce again. One should give the downturn more credit and anticipate related effects on ER.

ES Daily: Here as well, indicators seem to show prices hovering relatively high waiting to fall to a support level where buyers would jump in again. Our support levels are 870, 840 and then 810. At this stage, we don't see prices falling that low though.

ES Weekly: Swing is up and Entropy has bottomed yet MTFS is not too bullish so one does not anticipate any significant take off, and after all one has already enjoyed a significant 25% recovery since recent lows, so a pause and some profit taking would be quite in order.

(posted 3AM Eastern)

Weekly Report on ER - Dec 22nd to 26th '08

Dominant TF: 60mins leading, with Daily dropping lately.
Swings: UP-UP-UP from UP-UP-UP (60mins swing is hesitant)
Market Direction(daily): cautiously long or taking profit.

Last week monday, we were long while we anticipated the energy exhaustion ahaead of the 500 level. A fairly easy week overall except we had to remain cautious ahead of triple witching. Now comes the festive season with lower volumes, a bit of position squaring writing off losses by Dec 31st, so we can expect again some volatility ahead.

EURUSD: last week, i really thought €/$ would calm down before marching higher, but we remained positioned long and quite amazed by the $ freefall. EURUSD finally pulled back on 1.47 almost exactly on MM SR level, so again our indicators do react well even if again volatility acts as a time compression. Everything happens a lot quicker these days. At this stage, we should see some slow down possibly around 1.37 (retracement stopped on stall level ~1.38), but the overall direction has now changed, and we shall either see a range shift i.e. same dynamics just shifted upwards due to rate cuts, or a continuation of the fall. We are for the time being waiting to check EURUSD behaviour on salient support/resistance levels before updating our scenario. Our short advice would be to sell the US$ following the 60mins charts as well as tick charts. Upward potential is however limited.
(Image posted)

ER 60mins: surprisingly little difference from last week. ER is still inches away from the 500 target, and finds it difficult to go higher. It is only a matter of time though even if there is still a possibility to see ER consolidating around 470. Here as well shorter time frames are recommended to possibly buy in dips (dominant trend is up).

ER Daily: upper bias weakening here too. Momentum trading should take ER to 500 and even maybe to PR1 around 520, but difficult at this stage to figure out whether we shall then see new energy coming from a breakout effect or another pullback. The latter scenario is preferred, hence caution must be exercised. Those who are still long can tighten their stops, otherwise it is probably too late to enter except on a stop entry above 500 (risky).

ER Weekly: With Entropy bottoming out, we now look at the MTFS pattern and realize that while it does show some recovery potential (+33% from recent lows), there very little chance to see ER going much higher. Logic would say selling would start on key MM or Fib level, as mentioned above on lower time frames. This is a time of uncertainty so buyers should look at buying on an aggressive limit price or wait for a consolidation and buy market later on.

Nothing wrong with staying on the sideline and enjoy a quiet festive season after such an eventful year...

(Posted 2.30 AM Eastern)

Euroller-Coaster

What did i say about profit taking zone on EURUSD...? OK, to be honest, volatility still surprises me and i did not anticipate it would retrace to Fib PR1 so quickly. Again and again, high volatility is like time compression, so one just needs to shift time frames and go with the flow...

EURUSD: Our chart seems to indicate some calming down today as with some conflicting forces now brewing. It is difficult to pick a direction for the day, however the oversold situation should push the US$ down. A shorter time frame is recommended. Longer term, the US$ will definitely weaken further.

ER: Yesterday's dip should not have any lasting effect on prices slowly rising to test the almighty 500-520 zone. We do have a slowdown in energy, but this could be understandable hesitation on triple witching day. We expect a clearer picture later on today although volumes could be turn a little lower ahead of the festive season.

ES: Similar scenario at first sight, if only one wouldn't see a more definite exhaustion in the short term. One might therefore test lows near 875 again where one could then possibly gather some strength.


Overall, we see little chance of a rally coming. On the contrary, we might just be heading toward some drifting til the end of the year. More details in the weekly report this weekend.

Good trading to all,
bv

(posted 1AM Eastern)