Market Snapshot

Market Update - Nov 13th '09

2009-11-13T06:32:00.000+02:00

Confusion area, didn't i say... A spike up early in the day followed by the same pace of selling like if nothing happened. Prices reached a Fib level where they could pause for a short while, or aim a little lower later on to stall (1082) or even to strong Fib/MM support around 1078. More economic news to be expected today, and maybe a "Friday 13th" effect, who knows... :) Still no change however on the daily and weekly charts, so it is too early to say that this is the retracement we've been waiting for...
TF coincidently is also on a Fib/MM support level and is in bounce territory. However the profit taking is market more clearly and the buying pressure should be faster exhausted here. We're not yet in a clear down trend even if the market will try current support.

EURUSD broke on the down side and could still go lower after a pause (early MTFS crossover). The daily chart shows buying pressure fading, and the current channel can only be sustained if we have a series of higher highs, which looks unlikely now. Again risk-adverse longer term players should not rush into selling, but trading a 30mins chart or lower is certainly a lot more fun.

( posted 4:30 AM UK )

Market Update - Nov 12th '09

2009-11-12T08:49:00.000+02:00

I called it a "confusion area" yesterday with a breakout attempt which failed to reach the 1113 target. More of the same today with a possible further erosion to 1085 then 1079. Again, we have conflicting forces with some congestion in intraday time frames, a residual buying pressure on the daily chart and some indication of a forthcoming pivot on the weekly chart ! Overall, we anticipate a reversal even if the exact timing is difficult to predict.

TF also hit the resistance in the low 590s as expected and should also retrace later on... Patience is a virtue, so let's not read too much between the bars. Although a pivot is expected on the weekly chart, one must always go with the flow and refrain from being contrarian and press the button too early. The technique is certainly more than dynamic enough to prevent acting too late in any case.

EURUSD: Again a 30mins time frame gives better reversal points here. The €/$ hit support level to then test the pivot again, behaving almost like clockwork. We should see the same kind of congestion as with indices, with a likely return to support around 1.495. Unlike indices though, retracement potential is limited. Breaking current support could trigger some selling, but congestion is the same range is my favourite scenario for now.

( posted 6:45 AM UK )

Market Update - Nov 11th '09

2009-11-11T08:52:00.000+02:00

ES behaved as expected, and will now need a extra push to break out again and reach 1113 to 1125. It isn't clear whether this will happen though.
We are really entering a "confusion" area, but having said that, one should always refrain from adopting a contrarian view and go short too early.
Shorter time frames are recommended.

The situation is similar on TF with a strong resistance on low 590s. There is still some residual buying pressure for now, and we may see highs being tested once again, but a reversal point is in the cards within a day or two.

EURUSD: "high and hesitant" i said yesterday. We have clear support and resistance levels provided by yesterday's high and low. A breakout (probably on the low side, but who knows...) is possible, but congestion is more likely. A lower time frame (30mins or less) will provide clearer pivot points.

( posted 6:55 AM UK )

Market Update - Nov 10th '09

2009-11-10T08:51:00.000+02:00

ES did not hesitate long on 1071 to break out straight to resistance level in the low 1090s where buying pressure is now easing a bit. We could see at best a modest retracement later in the day, but the daily chart is still quite bullish so we could aim to the top of the channel equating with strong resistance level around 1125. The weekly chart is again pointing for retracement but there is no confirmed pivot just yet, so a last bout of buying could indeed be the trigger we're waiting for. Note that dominant time frames are short intraday and weekly, which is unusual, and could indicate more volatility ahead.
TF also followed suit and while it seems to be pausing ahead of its target, it should later on hit mid-590s. We'll try and make some sense out of levels as we get near those levels to gauge whether it could indicate a good reversal point for both our indices. TF is certainly more "ripe" for a reversal even though there is an obvious congestion on the weekly chart now.

EURUSD: hit its target area around 1.499 to 1.502, so some profit taking is good measure now. EURUSD should stay relatively high but hesitant and probably range bound also. It is indeed an important target point on ALL time frames including Monthly.

( posted 6:50 AM UK )

Weekly Report - Nov 9th to Sep 13th '09

2009-11-09T08:36:00.000+02:00

ES has indeed broken out to about 1070, as mentioned on Friday. It is very volatile and still fairly bullish, however this 1071 level is the 62.8% Fib retracement level which will dictate a return to the dominant up trend or not. The potential reversal is quite strong but is not confirmed yet on the weekly chart. We therefore recommend being cautious or trading the current hesitation period with lower time frames.
TF is also probably looking at peaking soon, and maybe on current levels actually. It has also been quite volatile around "news time" and briefly penetrated its target resistance level. Like ES, it is still aiming a little higher but energy is fading fast and we might see a pullback over the next few days.

EURUSD: Still very bullish. The channel on the daily chart is still valid, so we could see prices close to 1.5 and maybe higher this week. The retracement potential is being exhausted in the short term on the weekly chart, so we might then enter a congestion period in this price range (above 1.465) instead of a US$ recovery. The correlation with indices (and commodities like Gold) is very strong, and profit taking is very much in the cards there...

( posted Monday 6:40 AM UK )

Market Update - Nov 6th '09

2009-11-06T08:42:00.000+02:00

ES took us by surprise to get straight back to range highs (top of our price segment at 1062), making chart reading a little more confusing. In the short term, we may see prices staying pretty high, and can't even exclude a possibility of a breakout to 1071 here. However, if we put information from all our time frames in context, and while the weekly pivot is not confirmed yet, we should take this period as normal hesitation around a reversal point, and switch to a lower time frame, take a step back until the fog clears up, or take a shot at it and now wait to go short again.
TF is also on a strong resistance right now with both a clear upward bias in the short term AND a clearer pivot situation on the weekly chart !!
We'll check Fib levels on the daily chart and keep in mind that both indices are highly correlated to take cues from TF and possibly apply them to ES.

EURUSD: The 1.489 resistance level should be tested again from breakout. As said before, the retracement potential on the weekly chart is weakening, and we may have to see the end of the current pattern through the passage of time (up to 2 months) or a sudden breakout to the 1.56 area...

( posted 6:45 AM UK )

Market Update - Nov 5th '09

2009-11-05T07:41:00.000+02:00

ES found it difficult to pass the mid 1050s as mentioned yesterday to then fall back to a regular Fib level in the low 1040s. Nothing exceptional here. While erosion should continue, we are now entering a phase of uncertainty until lows inthe 1030s are tested and fought again. A new set of time frames will be helpful here. Volume based charts are quite appropriate for instance.
TF is also both bearish and hesitant near support levels. The low 560s must be broken more decisively to open up to new support levels in the mid 540s. There is however some bounce potential along the way at least at daily level for now.

EURUSD: Now that it has retraced to MM/Fib around 1.489, a pause is nothing but normal. We may now enter a period of hesitation with a support level on 1.48 (check Fib levels on 60mins chart). As time goes by, the retracement potential on the weekly chart will keep on fading, and while there could be volatility or congestion, we may have to wait for a MTFS crossover in a couple of months to start seeing a change of regime.

( posted 5:45 AM UK )

How far ahead ... ?

2009-11-04T20:31:00.000+02:00

Not an update... just a reminder on the topic: How far can we "predict" the market behaviour ?

Indeed, i have said repeatedly that the tool set as it is does not capture volatility very well "mea culpa" but at the same time, if we use it for its intended purpose i.e. swing trading, turning points, targets, energy levels and support/resistance do provide collectively a more than adequate picture.

On average however, the market outlook is valid for 3 to 5 bars, sometimes brought down to 1 bar in case of a high volatility environment. Since the daily chart outlook often does not change enough to justify a regular update, the report tends to focus on the 60mins chart which obviously could warrant 2 reports a day... which i don't necessarily have the time for... A bit of a catch-22 ... So if any one wants to give it a go and post a mid-day update...

Market Update - Nov 4th '09

2009-11-04T07:26:00.000+02:00

ES behaved pretty well and stayed above 1032 as expected. It may even try and creep higher as short sellers take their profits. There is no indication that this recovery will last, so we'll just check MM/Fib levels on the daily chart (1052?).
TF follows the exact same path, and again shorter time frames are recommended for those looking for entry points in short term retracement trades. The mid term trend is still down even if the markets are obviously hesitant on a strong support level (562 for TF, 1032 for ES). The longer term support will probably be found within the next price segment down.

EURUSD also behaved nicely and bounced on our support around 1.464 to now aim at the 1.477 area. We're obviously in a channel and the longer term retracement potential is limited, but may see 1.464 tested again in the next few days. If broken, EURUSD could retrace to 1.44 within a few weeks. We'll come back to this scenario in the coming week.

( posted 5:30 AM UK )

Market Update - Nov 3rd '09

2009-11-03T09:09:00.000+02:00

ES fell back to its support level where it bounced unsurprisingly. We do notice that lower time frames are more than recommended. ES should aim lower this week anyway, but we'll again check the strong 1032 level for support. Prices should stay low, but above that level today.
TF was decidedly below the 562 key level yesterday, which could indicate some further erosion. We are however approaching bounce territory near September lows. Like ES the retracement is now engaged though and prices could shed another 10% in the next few weeks.

EURUSD is hesitant on pivot level (1.477), but despite the short term volatility, the US$ should later on strengthen to around 1.464

( posted 7:15 AM UK )

Weekly Report - Nov 2nd to 6th '09

2009-11-02T08:22:00.000+02:00

ES not only turned south again on Friday as expected, but it went straight back to previous lows and further down to strong support level. End of month window dressing probably also caused additional volatility to the market.
The market is obviously bearish and the next breakout (a short term bounce is possible on Monday though) will take prices to the next price segment, with a target area around October lows (next stall level also).
Note that picking the right time frame is not as easy as it looks, and a 30mins time frame can help determine turning points.
TF is also on a strong support on 562. In fact the current configuration is very very similar to ES. A bounce is also possible here but TF is likely to test high 540s and could even reach low 530s later on. It should however not aim back straight at low 510s (weekly) without testing 560 as a resistance, but we'l review this scenario in due course.

EURUSD: We've seen clear swings with a drop on strong resistance down to strong support. Does that mean that the US$ will fall again? Probably not. The MTFS crossover is not indicative of a sustainable turnaround. We'll therefore check for the next Fib level for resistance.
On the Daily chart, selling pressure is still there, so the current support on the 60mins chart will be tested again, and probably lower to around 1.464 .
No change in our longer term outlook.

( posted 6:15 AM UK )

Market Update - Oct 30th '09

2009-10-30T08:42:00.000+02:00

Yestersday's bounce was a little stronger than anticipated, but took ES to Fib/MM level so we got the signal and target, even though we did not capture the effect of volatility. It has been said many times on this blog and elsewhere, that volatility is essentially a time compression variable which is not easy to capture in TradeStation.
ES is now back to the top of the price segment which is a strong resistance level. We've seen EntBin moving from extreme low (-5) to extreme high (+5), indicating volatility and hesitation for this last day of the month. We'll check a lower time frame and Fib levels from yesterday's swing.
The same applies to TF where a lower time frame is here more than recommended. Yesterday's bounce should fade pretty fast, and lows will be tested again some time next week.

EURUSD: airhole effect could take prices back to 1.479 then 1.477 within a couple of days. However a "airhole" does not mean in any way a sudden drop. It is rather a congestion period leading often to a breakout situation.

More on the next weekly report.

( posted 6:45 AM UK )

Market Update - Oct 29th '09

2009-10-29T07:02:00.000+02:00

Market reading has been quite easy lately, and many traders must be smiling ear to ear... ES is now on the 60mins stall level and still looking a little bearish.
The early MTFS crossover is a classic example of a stall which may translate in a soft landing in the low to mid 1030s.
We shall notice again and again our 32 points segments. If this one breaks, we might head onto 1000 again.
The Entropy is very low (EntBin=-5) so a bounce is more than likely, however selling pressure is still too strong in the first hours of the day.
On the daily chart, we notice the channel boundary, the Fib level and a lot of bearishness, so we'll certainly have to check for a breakout.
TF is also coincidentally on a strong support level on both 60mins and daily charts. It is therefore in bounce territory when the selling pressure fades a bit.

EURUSD: on stall level as well (60mins), on the channel low boundary (daily), so a lot in common with our indices. At this point in time while the € could drift a little further, we know that the retracement is bound to be limited (weekly chart) hence we first have to analyse the price behaviour on this stall level (1.471) and on or near strong support level (1.464)

( posted 5AM UK )

Market Update - Oct 28th '09

2009-10-28T08:28:00.000+02:00

ES is really struggling with the current support level, and should sink further today. We have a MTFS early crossover forming which could mean an unconvincing attempt to hold or even bounce a tiny bit, but we should rather look at channel bottom on the daily chart, in accordance to Fib retracement levels.

If we look for some confirmation from TF, it is clear that it is aiming for range lows and stall level in the mid to high 570s.
The pullback could later on take prices further down.

EURUSD: very modest bounce on support level, which is also a channel boundary on the daily chart. Traders will try and keep it above the 1.477 support level, but negative pressure is certainly there still and profit taking could continue to the 1.464 area (to be confirmed).

( posted 6:30 AM UK )

Market Update - Oct 27th '09

2009-10-27T12:34:00.000+02:00

ES fell to the support level after breaking out. We had anticipated it as prices stayed below the key pivot level and selling pressure accelerated. ES should remain fairly bearish, yet 1062 should hold and a minor bounce is even possible at first.
As mentioned on the weekly report, the current support level will determine whether prices will fall to the next price segment or not. It is unclear whether this will happen today or not... but it could in the next few days.

TF is also sitting on its strong support level, and since it is a also strong Fib level, a bounce is likely. However, like for ES, we should start preparing for a pullback to the low 500s.

EURUSD: we'll check for a channel bottom as we still don't see any major retracement coming. Short term bearish for now.

( posted late 10h30 AM UK )

Weekly Report - Oct 26h to 30th '09

2009-10-26T08:12:00.000+02:00

ES has taken a bit of a knock on Friday, but one should not jump into conclusions of the "big one" just yet. It is only normal profit taking at this stage. Indicators on the 60mins chart do show a bounce potential, but 1078 will be key level. If prices stay below it, we can safely assume ES has moved to the lower price segment and will aim at 1062. That level if/when hit will be a lot more crucial going forward.

TF is also in soft landing mode on stall level just below 600, and could later drift to the strong support level (~594). Longer time frames also show that retracement target as key support which could trigger substantial selling pressure. Although a major retracement is due, we cannot say with any sort of accuracy whether the timing is right. We have all noticed a sort of double top and a return to the [500-513] range is in the cards, but we'll need to update our scenario as we go along (triple top ??)

EURUSD: we notice some exhaustion of the Euro, and a narrowing of the range which could lead to a breakout situation this week. The US$ should remain weak in the short term, and a lower time frame is recommended. We'll check 1.502 for support.

( posted hastily 6:10 AM UK ... will try and give an update around noon)

Market Update - Oct 23rd '09

2009-10-23T10:19:00.000+02:00

ES has been oscillating in a same trading range for about a week now. It is still trying to push higher, and one cannot discard the possibility of a last breakout to the next price segment (~32 points to 1125). I personally think we'll have to go through at least another round of oscillations in the current trading range.

TF is also a little volatile. It is currently sitting on the Fib2 level in the mid 610s, with a bit of buying pressure prior to the open. TF has been leading the retracement so far and since we know a pullback is in the cards, we'll watch the market action carefully. TF must indeed at least pass recent highs and even breakout 625 to escape from the erosion scenario which could accumulate some momentum later on.

EURUSD follows the same path of indecision on target level (stall level to be exact), otherwise nothing new really. Correlation with indices is high. Profit taking to be expected soon, but really nothing major... The US$ has lost all its shine, and this situation should last at least a few months months.

( Posted late, thanks to Blogger.com being down for a while, 9:30 AM UK )

Market Update - Oct 22nd '09

2009-10-22T08:26:00.000+02:00

Yesterday's market action was a little too abrupt for our time frames and i hope you have switched to lower time frames as recommended recently.

1094 is indeed a strong resistance, only a few points away from a Fib target on the daily chart so it is a good price area for the "air hole" also mentioned in recent reports.

Having said that, on our time frames at least, we don't see the potential for a the big retracement just yet. We believe prices should drop again today to the low 1070s, but should bounce relatively soon (Check 30mins time frame or lower).

TF has been showing the way south and pulled back a little more markedly. It hit stall level just below 600 and could even reached support level on 594. Selling pressure is however not as strong as one could imagine, so yesterday's dip does not preclude a sizeable retracement here either. At least for now...

EURUSD: nothing new really. €/$ has hit a target on stall level and has the potential to go a little higher still but is certainly more hesitant now. It might have a go at it after gathering strength near range lows around 1.49

( posted 7:30 AM UK )

Market Update - Oct 21st '09

2009-10-21T09:23:00.000+02:00

Sorry about yesterday... Could not find a minute to connect.

ES is finding it difficult on 1094 but it isn't clear yet whether this is the signal for the pullback we've been waiting for. Prices should indeed hover around current levels, and test resistance again. We shouldn't be too far from the peak now so i again recommend moving to lower time frames.

TF has already retraced a bit to 610 where a bounce is likely. Same period of hesitation otherwise, so caution must be equally be exercised at these levels, even if we don't anticipate any strong pullback in the short term.

EURUSD has hit the target we had on MM stall level. We also notice that the retracement potential on the longer term (weekly) is fading, hence only minor profit taking could slightly affect the current bullishness in the couple of weeks or so. Passing stall level and then the strong 1.51 resistance should prove difficult though, so we'll update our scenario as we get close to target.

( posted late 8:25 AM UK )

2009-10-18T12:44:00.000+02:00

ES has reached the 092 target we gave last week to retrace to mid-resistance level (high way to pivot level). It is now even more hesitant, and even though higher time frames still point to a new target close to 1125, we have to remain cautious about significance level on the MTFS which is dropping fast, indicating we should pay more attention to a lower intraday time frame. We'll therefore first check whether the [1076-1080] support range holds on Monday morning, as it could trigger selling to the 1060s.

TF is also hesitant, losing a little bit of ground without any selling pressure. Erosion could continue to 610 first, maybe 604 later on. We'll have to update this over the next few days, as a If selling doesn't pick up momentum, a congestion period could last for a while.

EURUSD: Quite resilient, it is testing Fib/MM level around 1.486 to 1.489 for now, and could lose a bit of ground to 1.48. Like for indices, selling pressure is pretty mild still, so we may see some congestion, trading range and even our target being hit still.

That's all for now... We'll try and be a little more definite over the next few days. On account of traveling, Tuesday's report shall however unfortunately be posted late.

( Sunday 11:40 AM UK )

Market Update - Oct 16th '09

2009-10-16T07:40:00.000+02:00

ES is now on its resistance level on the 60mins chart, and looks still bullish... As mentioned in previous reports ES is aiming to 1125 or at least to the stall level just below.
We're anxious to see whether that will be the retracement point we're looking for.
TF is also bullish, close to the 625 resistance level but while also looking bullish right now, looks like having less upward potential. We can expect some fighting on current levels, and can't discard a volatility spike in either direction.

EURUSD seems to be following indices, in a catch 22 situation like for gold, offsetting returns in Euros terms. EURUSD is more hesitant now, but should remain bullish if it stays above 1.489
Stall level is on 1.498 with the strong resistance on 1.501, this is an area where we should see that anticipated exhaustion and likely modest retracement.

( posted 6:40 AM UK )

Market Update - Oct 15th '09

2009-10-15T08:50:00.000+02:00

Sometimes chart reading is easier, particularly in momentum mode when "quantum" levels are visible.
ES is now very close to the 1094 resistance level, and residual bullishness should support ES moving higher again.
TF which was slightly ahead of ES is now more in sync, and is also inches away from the 625 resistance level, which could prove a lot harder to break.

EURUSD: same story... €/$ should hit stall level and probably resistance level around 1.5 later on. While going with the flow, one should always remain cautious about the apparently obvious though.
One can't discard the possibility of a sudden bout of selling on target.

( posted 7:50 AM UK )

Market Update - Oct 14th '09

2009-10-14T08:16:00.000+02:00

ES keeps on rising relentlessly... hesitation on highs has now faded so we can expect it to reach 1085 today (maybe 1093).
I know i probably confused some readers with my retracement warning on the weekly chart: yes, it is still there, charts are clearly overbought, but the momentum effect is too strong in the short term.
TF is now loading correctly again here. It is moving along with ES and should aim for the stall level or maybe right to the resistance level on 625.
Again, we have to realize that the retracement scenario is a little more advanced here than on ES hence TF could lead the forthcoming retracement (next week?). We'll come back to it in due course.

EURUSD: US$ is very weak and despite being on a target now (1.489), resistance level could break hence we could hit our longer term target (just above 1.50) earlier than we thought.

( posted 7:15 AM UK )

Market Update - Oct 13th '09

2009-10-13T08:55:00.000+02:00

ES is now testing september highs with some hesitation. It isn't clear whether it will stall now in the short term, but it is probably too early to assume the timing is right for the retracement announced on longer time frames for some time. ES will probably try and creep higher, maybe up to the next Fib/MM level around 1125.
The dominant time frame being the 60mins chart, we'll remain obviously quite cautious.

TF hit stall level yesterday. This can explain the current exhaustion, but 625 is just around the corner now and should be tested still. We do notice that TF is definitely closer to the anticipated retracement.

EURUSD: key level 1.477 could determine some retracement if broken but this is unlikely. Current hesitation is quite normal but we still aim higher in the longer term around 1.50 to 1.51

( posted 8 AM UK )

Weekly Report - Oct 12th to Sep 16th '09

2009-10-11T13:02:00.000+02:00

ES has crept higher relentlessly the whole week, right to the 1062 resistance level which is still valid even though penetrated on Friday.
Since we should always stick to our "go with the flow" guideline, we have to push back our longer term indications of the retracement announced on the weekly chart (EntBin = 5).
The daily chart also remains bullish for now, but we have to realize that the 60mins chart IS the dominant time frame by far with a significance level of 88% (only 34% and 31% on higher time frames).

ES could therefore either enter into a airhole or test September highs again, or higher to 1125. We're not going to carry on waiting anxiously for the reversal point as it can take a couple of weeks or more. We'll monitor shorter time frames, update our scenario day after day, and as always "go with the flow..."

No TF data (problem with the TradeStation server) so we can 't confront the analysis of our two indices as we always do. We'll try again tomorrow.

EURUSD: The situation is not so clear here with some erosion in short waves on the 60mins chart. Yet, on the daily chart, the trading range we've seen since mid-october is still valid, with 1.464 remaining a key pivot level. Like for indices, a retracement potential is quite visible on the weekly chart, but once confirmed (after hitting 1.50 or 1.51 in a few weeks?) such pullback should remain relatively limited (23% Fib retracement at the very most).

( posted Sunday Noon UK)