Market Snapshot

Weekly Report - Jul 13th to 17th '09

2009-07-11T09:34:00.000+02:00

After some substantial selling, the week actually ended on a softer note on account of low volumes. ES and TF are still holding on their key support levels respectively 875 and 468.

We are likely to see more selling next week although a bounce is also possible first (depending on ES bahaviour on 875 again). We have indeed the MTFS clearly on a bear pattern but the white line has been striding rapidly ahead and could therefore reverse in the next few days (check reversal of the white line in oversold territory). It is in any case difficult to have a very definite scenario ready when prices are sitting right on key support levels. The longer term chart still point for a lower support (~840 on ES, ~460 for TF) which area again could form a good base to move higher then (i.e. no panic yet over the long term).

( posted Sat 11th 8:30 AM UK )

Market Update - Jul 10th '09

2009-07-10T07:42:00.000+02:00

ES is sitting on 875 now from where it could try and bounce. However while this key level is obviously quite strong, higher time frames still point towards drifting lower to the bottom of the trading range (859, then 840 on the weekly chart). As always, let's wait for the level to be broken first.

As mentioned yesterday, TF should also aim lower towards the bottom of the trading range in the 460s.

( posted 6:45 AM UK )

Market Update - Jul 9th '09

2009-07-09T08:17:00.000+02:00

Again, markets seem to behave in a fairly orderly manner. On the ES chart, the 875 level shows some resilience still and is so oversold that a moderate bounce is possible.
We still keep our lower target for now, in the 860 area, then maybe 840. As mentioned many times in previous reports, this is not a trend reversal but only a normal pause after the extraordinary recovery since March.

TF came close to the 469 support level yesterday where it bounced temporarily. Like ES we aim for a lower target now. Our support level should be hit within a few days, but low volumes can cause normal seasonal volatility.

( posted 7:15 AM UK )

Market Update - Jul 8th '09

2009-07-08T06:51:00.000+02:00

Always good to see the market behaving as anticipated. We've seen the 883 level holding for a while, to now test a stronger support level at 875. The thing is that we have some indication of further selling, so while this test area should hold the selling pressure in the short term, we'll keep an eye on a lower Fib targets on the daily and weekly charts. Likewise, if/once 484 is broken, TF could shed 4 to 5% to reach the low to mid 460s later on this week.

( posted 5:50 AM UK )

Market Update - Jul 7th '09

2009-07-07T07:48:00.000+02:00

After hitting top stall level near 930 a few days ago, ES fell to the bottom stall level yesterday (883), thus confirming range trading on the daily chart (cf. weekly report below).

ES could potentially rise to 900 (Fib level). However the daily chart is still drifting so ES should remain in the bottom part of the trading range, and one can envisage 875 (May lows) being tested later on this week.

TF also bounced bounced on a salient level, and shows the same "failed recovery" crossover on the 60mins chart, hence while it can aim back termporarily to the high 490s, TF should also resume its drifting down. Again, a likely target could be in the 460-470 area where it could gather strength to aim back to higher levels (600-625) later on (September ?)

( posted 6:50 AM UK )

Weekly Report - Jul 6th to 10th '09

2009-07-05T08:58:00.000+02:00

So, we've had the long awaited retracement last week, so far limited to one price segment on ES (921 -> 906 -> 891), still roughly 15 points apart. While it should later on go lower, we are still in the same trading range on the daily chart, and selling pressure remains relatively limited on higher time frames.
Breaking 875 which would mean falling another price segment would definitely confirm the retracement we announced a long time ago. Now to be honest, we tend to often ignore the minor 23.6% Fib retracement level which sits on 883 on the weekly chart. So, considering the fairly weak selling pressure, the level may be valid and after a period of trading range on the daily chart, prices could eventually rise again.
To be on the safe side, traders who aren't short or delta negative, may want to enter in a breakout both ways, possibly even reducing the spread between entry levels or even try a short butterfly.

TF is still hovering on the 500 key level (Fib support : ~498 on the 60mins chart). Despite a possible short term bounce, that level needs to be broken still. We've noticed here also a narrowing of the trading range, and also a typical breakout environment, potentially exacerbated by lower volumes going forward.

So, to summarize, let's keep an eye on our key levels, watch a possible bounce early in the day (after the long weekend) and watch carefully the trading ranges given by our price segments. We still favour more retracement even if selling pressure is not as strong as we would like to get over and done with this selling phase. We would then at last see the market then move on and resume its course north, eventually attacking the almighty 1000 level.

( posted Sunday 7:30 AM UK )

Market Update - Jul 3rd '09

2009-07-03T09:15:00.000+02:00

Aaaaaah ... At last! We finally got our reversal point. The market reacted on a bad unemployment report at a time when it was already prone to retrace thereby exacerbating its effect.

ES is now aiming at a lower target still, either on 886 (Fib Expansion), or stall (882). We're now at last testing important levels where the market will have to chose between bouncing on the 875 area or retace fully to 840 or lower. We should be able to have an answer within a few days (more details on the weekly report).

ER is following the same path, with a possible pause here in the high 490s (Fib level), but probably aiming lower later on.

Let's note however that it is too early to announce a major retracement. There is a lot of residual energy in the market, and the 875 to 882 area will be the true test. We cannot discard the possibility of the market stabilizing just 1 price segment down, range trading between current lows and 906.

( posted 8:15 AM UK )

Market Update - Jul 2nd '09

2009-07-02T08:06:00.000+02:00

ES jumped to almost reach stall level yesterday, reaching about Fib PR2 (61.8% retracement on the daily chart) and only has some residual energy to go higher. It could however creep higher to the top of the trading at the stall level again or even the strong resistance level on the mid 930s. A more likely scenario in the short term is a period of hesitation in the low to mid 910s though. In case of some acceleration of selling, we do notice a Fib target just above 900. However we have no clear pattern yet which could indicate the sizeable retracement we've announced for a while. (Will it ever happen ?)

TF shows a very minor pause or retracement to come on the 60mins chart, but remains more resilient overall. It could well try and hit 520 again by the end of the week. On the longer term, just as ES, TF shows a provisional pivot on the weekly chart with a very high entropy, which should indicate a reversal, but it may be a long way away still, and probably on current highs, if not higher.

( posted 7 AM UK )

Market Update - Jul 1st '09

2009-07-01T09:55:00.000+02:00

New day, new month, new quarter...

Anyway, ES broke its upward channel yesterday (60mins chart), and could now be drifting a bit, pretty much directionless at that level yet pushed up on the daily chart. We're again waiting patiently for a confirmation of the reversal on the weekly chart.

For the time being, it seems the 906 area represents a strong support level at the moment, and the daily chart points toward a return to the top of the trading range, so we'll check 921, then 937 (price segments are about 16 or 32 points wide).

Same situation again for TF with a potential return to 512 then 520, yet we're looking at an erosion later on, which does not facilitate our market reading as the pivot or reversal will look a little fuzzy at first.

( posted 9 AM UK )

Market Update - Jun 30th '09

2009-06-30T07:39:00.000+02:00

Strange situation yesterday confirming that one should not be fooled by the apparent calm of this trading range. End of term window dressing among portfolio managers maybe...

ES tested 906 (907.25 to be exact), TF had a spike almost hitting 500 to then reach stall level again. One could now be led to think that markets should start taking short term profits again on top of the trading range (Fib pattern already visible with the same target on key 500 level). There is nevertheless still some potential to aim a little higher first.

We therefore change our immediate scenario for 926-930 target (Fib level) on the 60mins chart. We are still in a configuration eventually pointing towards a pivot point and a return to ~900 but we have to admit selling pressure is very low right now.

Today we'll watch out for a possible channel breakout on the 60mins chart, otherwise wait for the next pivot in the 926 area. On TF, it seems that it may unconvincingly reach 512 (or 516?) but we first have to wait patiently for that next pivot to be confirmed and to align with our longer term scenario.

My 2-cents for the day are again not to read between the bars. The bearish Fib pattern is starting to show, the weekly chart is ready to fall, but the 60mins charts shows positive energy still, so patience is always a virtue.

( posted 6:40 AM UK )

Weekly Report - Jun 29th to Jul 3rd '09

2009-06-29T08:20:00.000+02:00

Patterns are evolving rather slowly, so little change in our outlook this week. I invite you to take a look at the commented TF snapshot on our technical blog.

So, our ES chart is now stalling in the high 910s, starting to feel some effects of gravity with a possible return to the pivot level (~906). The daily chart is rather undecisive and while being on a "UP" swing has little energy and should therefore remain constrained to the same trading range. Again, it is not easy to figure out which level will provide enough energy to take prices higher later on.

TF follows the exact same scenario with a return to the 500-502 range first, and as ES will probably have to break this key level to exhaust the current selling pressure. We would then see a target around 460-468 on TF and 875-884 on ES.

( posted Monday 7:20 AM UK )

Market Update - Jun 26th '09

2009-06-26T07:51:00.000+02:00

Not only 906 was passed fairly easily (see yesterday's report), but the pattern has now crystallized for a target either around current highs (~920) or more likely mid to high 920s (~927).

This does not change our longer term scenario even if retracement potential now looks reduced of course. We'll therefore watch the daily range carefully, and particularly Support/Resistances and Fib levels.

TF follows the exact same path and therefore does not provide any any extra information to help us here. So we'll have to go through this upward retracement first, and wait for the next pivot to be confirmed. Again, the most likely route is a return to the consolidation even if selling pressure has diminished substantially.

( posted 6:50 AM UK )

Market Update - Jun 25th '09

2009-06-25T07:38:00.001+02:00

The soft landing mentioned previously turned into a sudden upward retracement (with a sizeable overnight gap) to test key levels broken earlier (906 for ES and 500 for TF).
It iw quite normal to see them being tested as resistance now, so nothing surprising as such.

The 60mins chart is however hesitant (reached a Fib PR2 on 908.5), so we'll have to watch this 906 level very carefully. Would there be no overnight spurt of energy, one would say that this is normal level testing, notmal range trading, and the overall trend toward consolidation would resume shortly. That scenario is still more than valid on the daily chart, but this volatility on shorter time frames is of concern and one cannot discard moving up one price segment again in the next couple of days.

Despite this high volatility, we'll nonetheless stick to our consolidation outlook provided by our daily and weekly charts.

( posted 6:40 AM UK )

Market Update - Jun 24th '09

2009-06-24T09:02:00.000+02:00

We indeed saw a kind of a pause on ES while TF was suprisingly more bearish yesterday. This is in line with our consolidation scenario. Patterns are not exactly in sync so let's take a closer look at our charts:

The 60mins chart shows ES sitting on the 2nd FIB target with no visible intention to drift lower for now. It should however settle lower after a while. The daily chart is still on its way for that lower consolidation level as mentioned in the weekly report.

Same for TF, currently in between Fib levels, aiming slowly but surely to 480, 467 to probably 459.

Buyers should come back to the charge somewhere in that area.

( posted 8 AM UK )

Market Update - Jun 23rd '09

2009-06-23T07:54:00.000+02:00

We had anticipated this move on several occasions, even if it is never too easy to pinpoint when the breakout will actually occur. It was therefore a clear case for a stop entry just below support levels or simply follow the last pivot and enter limit or on some pivot confirmation.

ES went almost straight to the target we gave yesterday (2nd Fib expansion level) and should aim at stall level in the low 880s but some soft landing is possible in the short term. The daily chart points lower though, so any bounce on the 60mins chart is likely to be short-lived.
Note that on all time frames, an absolute bottom would be around 840, i.e. we do not revise our longer term scenario described in previous reports to see ES test 968 then 1000 within a month or two.

TF also shows a soft landing area around current lows, so shall we see 500 tested as a resistance again to then aim lower ? Like for ES, a longer term consolidation target is probably in the 460s where buying would resume in concert with ES.

( posted 7 AM UK )

Weekly Report - Jun 22nd to 27th '09

2009-06-21T18:29:00.000+02:00

Last week's reports were pretty much on the mark. Let's see whether our charts still provide some clarity going forward.

ES on the 60mins chart has only moderately crept higher from the 906 support level and seems ranged bound with a resistance in the low to mid 920s. The situation is relatively unstable so while we should take higher lows seriously, this late rise remains too weak for our liking. Having said that, a burst of energy is always possible if range highs (around 930) are broken.

The daily chart expresses the same concern as last week, whereby one could still see some retracement to a lower support level before attacking the major 968 / 1000 levels. That support level could be in the 880s, or maybe back to the 875 pivot level.
The market definitely needs a consolidation after such a strong rise since March lows. It however difficult to estimate when portfolio managers will do their window dressing ahead of end of quarter reporting. This could trigger some substantial selling. Note that even the weekly chart with a very high entropy level is "ripe" for a retracement (840 ?).

The situation is about the same on TF, and we can keep an eye on the 500 level as a signal for the anticipated retracement. One cannot however discard an alternative possibility of seeing the bearish pressure dissipate over time on such strong support level (looks unlikely though). Again, at the moment there is no indication that the still hypothetical pullback would be more than a pause toward the 600 / 625 levels in the medium term, but at the same time, our charts hardly ever give us more than a few weeks visibility.

There will be daily updates this week still, then we will slow down to a mid week report during July/August unless market activity warrants more coverage like for the last 2 years.

( posted Sunday 5:30 PM UK )

Market Update - Jun 19th '09

2009-06-19T11:09:00.000+02:00

One should probably not pay too much attention to current "noise" on ES.
We indeed have some conflicting forces, with a first drive to try and reach 920, in a kind of a short term air-hole. We should indeed see ES fall toward the 880s in the coming days.

TF shows the same pattern with a possible short term target in the low 510s.

The underlying scenario remains the same with an anticipated consolidation then an attack at strong psychological levels (968/1000 for ES and 600/625 for TF).

More details in the forthcoming weekly report.

( posted late 10H15 AM UK )

Market Update - Jun 18th '09

2009-06-18T08:29:00.000+02:00

Again, we see this kind of soft landing on 906 for ES and 500 on TF as one possible jumping board to aim at our targets (respectively 968/1000 and 600/625). However, as mentioned already, there is a substantial chance of markets gathering strength on lower levels (1 price segment). In either case, selling pressure is still there at least for a few days to a week.

We may see some increased volatility on derivatives expiration, so we'll probably have a clearer view early next week.

( posted 7:30 AM UK )

Market Update - Jun 17th '09

2009-06-17T08:29:00.000+02:00

Markets behaved as expected yesterday with ES hitting target on 906 and TF on 500. A momentary bounce is possible in the short term and one cannot forget that this is only healthy profit-taking on the daily chart.
These levels are strong support levels on both time frames so we probably just have to exhaust the current selling pressure. One cannot discard the possibility of this level being broken and lose another 5% or so (quite a likely scenario actually).
Again no reason to believe that this is anything more than a normal pause to gather strength and attack the 1000 level.

TF follows the exact same route now (short term bounce), and will probably break 500 to fall back into the lower price segment (468 to 500) to then aim at the 600 levels. Could take a while though...

( posted 7:30 AM UK )

Market Update - Jun 16th '09

2009-06-16T08:12:00.000+02:00

We were right in anticipating "turbulences" and watch out for that key 937 level. I thought the low 920s would hold, but ES might actually drift slowly further to 906 now.

Likewise, TF will probably test 500 later on this week, even if it could also rise to 515 first. TF indeed certainly indicates clearly that buying pressure is dissipating a little in the short term, while being now in a [500-516] price segment, i.e. one step down from the previous [516-531] trading range.

On the longer term markets are probably just looking for a base to attack 1000 for ES and 600 to 625 for TF, so again, one should expect a major reversal here.

( posted 7:40 AM UK )

Weekly Report ES & TF - Jun 15th to 19th '09

2009-06-14T11:52:00.000+02:00

The market again showed remarkable resilience last week. ES tested the 950s as expected only to retrace to the 937 area which still acts as a pivot level.

We're coming close to the end of the ESM09 contract which has been quite bullish since March. Both 60min charts on ES and TF show low SQ (swing quality) level hence, one chould take cues from the daily chart and eventually trade a lower time frame (< 30 mins).

The daily chart is again clearly overbought and bullish, indicating some turbulences and possibly some retracement ahead of the stall level (high 960s). Such bullishness and forthcoming turbulences are also particularly visible on the Daily MTFS with the white line crossing the green line. As described many times on the TS-T-T blog, this is called a "early crossover" which can hardly stop ES from marching ahead to the otherwise overly anticipated 1000 level. We'll therefore watch out cautiously the stall level first (~968), and a likely retracement back to the low 920s, which is a Fib retracement level on the daily chart and the low of the trading range on the 60mins chart.

In the very short term, Friday's bounce on the 937 pivot level is also a a sign for a higher support level, which means that any retracement potential should remain minimal. We'll notice a Fib retracement level in the low 920s which coincide with lows of the trading range on the 60mins chart. We certainly can't discard some substantial volatility on triple witching week so we'll watch out for this key level to see which scenario develops (968 or 920 ?).

Lastly, if we take a look at TF for possible discordances, we do notice that the daily chart has reached its first Fib target level which could trigger some selling to now test the 500 level for support. No such sign in the short term though, so again, we'll need to update our scenario as we get closer to futures and options expiration.

( posted Sunday 11 AM UK, updated Monday 6:50 AM UK )

Market Update - Jun 12th

2009-06-12T16:53:00.000+02:00

Quick note (n between flights at the airport) just to say that we may have a retracement point now that we've reached the 950s level. Check Fib levels from current highs, but do not expect a retracement below 875 unless this new emerging pattern is confirmed.

More to come this weekend.

( posted late 4PM UK )

Market Update - Jun 11th '09

2009-06-11T08:58:00.000+02:00

Is it really worth writing a few lines today... ?
We see that same continuation of the trading range we've seen for about a week, with a potential breakout to the next price segment. We would then have a target in the high 960s. We also notice a reduction of the price range on the daily chart, confiming that any retracement would probably be limited. Again, the whole point is to know where and when this bull run will stop. Short term call spreads just above 1000 are pretty safe.

TF again shows more resistance in the 530s across time frames. Again, one might see TF reaching the 600 while ES goes to 1000 later one, but how long can the market sustain that same weak to moderate bullishness ? Put spreads are certainly however quite safe too...

( Posted 8AM UK )

NOTE: I will try and post a report tomorrow in between flights, even though one should not expect any "shock in the system" (some economic news today still...). As mentioned above, markets should just creep a little higher, so tomorrow's report may not be needed after all.

Market Update - Jun 10th '09

2009-06-10T08:44:00.000+02:00

Same trading range and same hesitation with that same underlying bullishness. ES levels have now moved up one notch, with a target around 950 to 953. We're still unsure whether we'll see the market give a go at 1000 before retracing. The daily chart indeed tends to suggest a pause if not a retracement once range highs are hit again.

TF could be aiming back at range highs but shows even less inclination to go straight to the 600. A retracement is quite likely to gather forces for the assault of the 600 / 625 levels.

( posted 8 AM UK )

Market Update - Jun 9th '09

2009-06-09T07:49:00.000+02:00

Market is still very much hesitant. We've seen ES almost testing range lows as mentioned yesterday, but finally still hovering around that same key 937 level. A breakout is possible, which would postpone the otherwise necessary retracement. Again the daily chart is still very pushy, so shall we see the market jump to the next price segment ?

TF is again somewhat less bullish right now, but longer term traders can safely aim for a higher price target.

( posted 6:45 AM UK )