Market update - Apr 9th '09

ES bounced here than we thought yesterday. We only post one report per day, and this is a clear case where an update would be needed. ES passed the 812 test level decisively in pre-market trading to warrant an update which users of this toolset will have obviously done.

ES also bounced without quite completing its pattern and we'll check for the formation of a downward Fib pattern later on today. For now, we believe a resistance around 828-830 would confirm that scenario. We'll remain cautious as there is still some residual momentum.

Our weekly report mentioned that the daily chart looked resilient with a MTFS pattern that does not seem completed yet, so the sizable retracement i announced has probably not started yet.

ER follows a similar path, and here again, it is difficult to figure out whether resistance has been reached or whether it can hit 447. As always we go with the flow and the 60mins bar is still blue after all.
At daily level, the situation is the same. i.e. waiting for our anticipated reversal.
Maybe early next week...

( posted 5:30 AM UK - Update/Info:email )

Market update - Apr 8th '09

ES reached our target on 812, yet at the same time, the 60mins MTFS pattern turned bearish, hence we're not quite surprised to now see a continuation of that much anticipated retracement.

Difficult to say how far it will go as ES is quite oversold (MTFS) and this generally leads to the former support level to be tested as a resistance.
A bounce to the low 810s is therefore anticipated.

This may be surprising but there is no indication of any return to a bear trend even if the current retracement could eventually pull prices back down to the 750s level. We'll confirm this later on.

ER also gives us that same indication of a potential scenario of a return to the pivot level around 437 (way too early to confirm though). On the daily chart, retracement to the low to mid 410s seems quite clear. ER could actually retrace lower to the 380s.

Again, no need to depress... it's only a healthy retracement cycle.

( posted 6:30 AM UK )

NOTE: Friday 10th report will be posted late, just before the opening bell.

Market update - Apr 7th '09

Retracement on ES has now started, even if, as we said yesterday, it is still showing good resilience on the daily chart.

On the 60mins chart, a bounce occurred on Fib PR2 around noon, so we may see a bit of range trading or a last attempt to go north again. The trend is slowly reversing though.

Same story on ER (aka TF), i.e. could certainly still creep higher (stall level ~461 and resistance level ~468), which would tally with daily chart trying to complete its current pattern in overbought territory.

Again, we do not foresee any major reversal but only a healthy retracement to gather strength and go higher later on (2nd quarter 2009).

( posted 6:30 AM UK )

Weekly Report on ES & TF - Apr 6th to 10th '09

Interesting week wasn't it? Some limited profit taking mid week followed by news that dollar printing machine shall soon reach melting point helped boost the markets. Is that a healthy situation ? Of course not, so volatility based models should do fine for quite a while still...

60Mins:
ES has been very resilient on strong resistance level. While we don't see it breaking right now, it is an eventuality to consider still. In such a case, prices would just move to the segment or range above with 843 being a new support and 875 being a new resistance. Again, our favourite scenario is rather a pullback to pivot level (~812) once buying pressure abates a bit.
Looking at ER (aka TF) now, it seems that there is still some fuel here to aim a little higher. ER is now only inches away from stall level around 460 and even strong resistance level on 468. Energy levels are low, but probably sufficient to creep higher on momentum residual.

Daily:
ES still going strong, and MTFS pattern not even complete yet, so shall we see prices reach 875 before any substantial profit taking happens? All we can say is that the market is certainly not ready yet for some retracement. Energy levels are coming down a bit but bars are still blue, so again, we'll go with the flow...
ER: same situation, but we'll watch 468 carefully as a trigger for a potential reversal point.
NOTE: in both cases, MTFS is clear on the necessity to have a retracement coming soon, so going long now is risky at these levels.


Weekly:
Same situation as last week
"The early signs of recovery we detected last week are more visible, but at the same time, also show indications of the "early crossover" pattern, in other words a choppy recovery at best, and a pattern failure otherwise. We still gear towards a reversal over the longer run, so longer term players may want to look at favourable entry points if they are not long already. We still assume recent lows represent the absolute bottom."

Current recovery is still underway, and one wonders if the current momentum can take prices all the way to Fib PR1. Would be surprising though, but that scenario is enticing as we have MM/Fib level almost matching perfectly (1000 for ES, 500 for ER)... Looks too obvious, and energy isn't quite there, so the pullback mentioned above on lower time frames is probably required to gather further strength.


NOTE: this report is based is based on these time frames to be consistent with a daily market update. This TradeStation toolset can be applied to any symbol and any time frame.

( posted Saturday 4th 7:45 AM UK )

Market update - Apr 3rd '09

ES reached Strong Resistance level on the 60mins chart, so could pause at this level. While overbought, there is no sign of retracement just yet. At best, prices should drift a little.
On the daily chart, although one also sees some weakening of the current momentum, one does not see any major profit taking in the short term even if we stick to our scenario of a healthy pullback to the mid 770s at some point.
828 is a short term support right now, then the mid to high 810s.

ER: same situation. While it could still creep a little higher, it is likely to then find support in high 430s later on.

( posted 8 AM UK )

Market update - Apr 2nd '09

ES bounced on 781 which was indeed a possibility we had seen, yet to be honest we could not quite anticipate ES passing the 812 pivot level so easily. We obviously can't get it right all the time, but our patterns while hesitant still give is us a 50-50 chance of retracement (as mentioned in previous reports) after this 'spike'. Is this due to anticipation on the G20 meeting in London? Are punters aiming at 832 first before taking profits ? It is now a matter of when going long at what price for those who are not long yet.

ER: similar picture. If it can still reach range high around 430 or even hit 437 again, retracement is VERY likely (same pattern formation on daily chart).

Advice: lower time frames are recommended to take advantage of the current situation.

( posted 6:45 AM UK )

Market update - Apr 1st '09

Nothing surprising in the last 24 hours.

ES pullback has been stopped on the 781 strong support level yesterday. While it could certainly bounce, we still believe ES needs to go lower still and test 766 or 750 again.

ER (TF) may find some relief on 415 (equivalent to the 781 level for ES), but is also likely to aim at the low toward 405 and could even retrace all the way to 380. This is unlikely though. Buying should resume within a couple of days.


( sorry for the late post because of an Internet problem... DNS was down )

Market update - Mar 31st '09

Always a chance of some window dressing on quarter end, but assuming most fund managers have done their homework, here is our read on the market:

ER (TF) bounced on 405 which indeed is a significant support level as mentioned yesterday, and selling pressure seems like abating in the short term. Dynamics have however reversed and stronger support is likely to be needed in the 380 area.

ES also bounced on equivalent (actually stronger support) on 781, and should also settle lower by the end of the week. Targets are again 766, 750 then the high 720s.
No change in our longer term scenario: we still assume the bottom is behind us in our trading plan.

( posted 6:50 AM UK )

Weekly Report on ES & TF - Mar 30th to Apr 3rd '09

NOTE: From now on, unless our indices should substantial decorrelation to warrant analyzing specifics, we shall write a single report for both.


We can clearly see that the retracement we anticipated started Thursday night, and carried on pretty steadily. Very easy to follow on the 60mins charts.

60Mins:
ES broke Fib PR1 and PR2 to now sit on the 76% retracement level which is generally regarded as weak (not to be discarded though). MTFS is oversold so a short term bounce is quite possible even if it is clear that the reversal is now too well engaged to the true support level has to be lower.
ER (TF): selling pressure seems more constrained.


Daily:
Friday selling seems too sudden to justify a full on reversal now even if we believe it could happen this week. Hence we may see one or two up days as Entropy is still creeping higher (VERY HIGH LEVEL THOUGH) and MTFS has not yet finished its pattern. Reversal may therefore only come by mid-week with targets being 766, 750 and quite possibly 725
ER (TF): same situation with targets being 410, 392 and quite possibly the high 370s.

Weekly:
The early signs of recovery we detected last week are more visible, but at the same time, also show indications of the "early crossover" pattern, in other words a choppy recovery at best, and a pattern failure otherwise. We still gear towards a reversal over the longer run, so longer term players may want to look at favourable entry points if they are not long already. We still assume recent lows represent the absolute bottom.


<< PRE-MARKET CORRECTION (NOON UK)>>
The "possible bounce" will certainly not happen.
Moreover we are now looking at testing low 780s on ES now (stall level = 789, Support = 781)


( posted 7:50 AM UK )

Market update - Mar 27th '09

ES and ER are really bullish and their targets given yesterday have already about been hit.

ER: the 437 pivot level has maybe been penetrated on account of high volatility but it could still hold. We personally can't quite see ER (TF) reach 468 without a retracement, yet the main guideline has always been "go with the flow" so why complain now if bars stay blue... We know this will stop soon, but let's enjoy the ride so long.

ES: same scenario.
We would like to see 812 being now tested as support for prices to go higher (846?).

Late buyers have to be cautious though.


( posted ... late ... 9 AM UK )

Market Update - Mar 26th '09

The retracement we expected came quite suddenly yet remains limited if we look at the average range on the daily chart.

ES is still blocked on the major resistance level trying to go higher and it looks like it could break it to unleash some energy to reach Fib PR2 in the high 830s in the next couple of days. Again the overall look on daily and even weekly leads us to think the bottom is behind us but a substantial retracement (750?) is in the cards still, so buyers will have a better entry point by the end of the month.

ER (TF) follows a similar path with a target in the high 430s then 446.
Retracement is also necessary here, so we'll update our scenario when we get closer to next pivot point.

( posted 1:45 AM UK )

Market update - Mar 25th '09

ER (TF) took a breather inches away from resistance level at ~437 to now retrace in the same high volatility environment.
It is now aiming for around 405 (Fib PR1) or the following one right Friday's lows. As said in previous reports, we prepared for this retracement, and are watching out for a bull pattern formation on the daily chart.

ES follows a similar path, and was actually ahead of ER, this explaining why it didn't quite reach its target. ES's rise has been stopped on strong resistance level around 812 to only retrace slightly. It should now hit a significant support level just below 800, yet, we have not the faintest indication of any substantial selling pressure, even if we can already preventively look at another strong support level in the low 780s.

We believe buyers are slowly coming back to the markets, with due consideration that it may still take a few weeks to dissipate the accumulated 'bearish' energy.

( posted 6:30 AM UK )