by Bruno Voisin on February 9, 2010
Despite a short excursion in the morning above the key level on low 1060s (MM/Fib), ES returned to erosion mode, i.e. some bearish congestion. The current level of volatility and noise can cause another test of the key level, but the overall trend will remain down. We won’t give a definite target today, but we’ll keep an eye on range lows (half a ‘quantum’, i.e. to the mid 1040s), and probably to the low 1030s (full quantum) within a week or so.
TF provided us with a much clearer picture. The bounce stopped exactly on the 594 pivot level to resume south. While the mid to high 580s are support levels on the daily chart, the selling pressure is still strong enough to now aim toward the low 560s, and probably to the low 530s in a few weeks.
EURUSD: the fall of the Euro has been synonymous to profit taking on our indices, and yet, we may see our support levels ([1.367-1375]) holding. EURUSD is indeed trying to bounce softly and may reach 1.39 again at some point. There is way too little energy to confirm that scenario though.
We’ll therefore very cautiously follow shorter time frames for now, with 1.371 being our first hurdle today. Correlations with indices will have to be monitored closely also.
( Posted 5:40 AM UK )
by Bruno Voisin on February 8, 2010
ES fell to 1040 last week, to then bounce to the 1061 level. This is actually a crucial pivot level which will determine whether prices will resume their downward course or not. If passed, ES will aim at 1080 (16 points quantum leap, i.e. half the normal price range for ES), or will dwindle back to the 1040s. The longer term trend (daily chart) points toward continuation of current erosion, and even somewhat lower on the weekly chart.
TF is obviously very much correlated to ES, but we always try and follow both indices to see whether salient targets are easier to read on one symbol or the other. TF hit our 578 target last week with enough energy to just about bounce to Fib level (591). Like for ES, the low 590s constitute an important test level, but it certainly looks like the daily and weekly charts are pushing further down. We do notice that the chart may find a temporary bottom today or tomorrow. On the weekly chart, we will pay attention to the mid 570s being broken, which would open the flood gates to the high 530.
EURUSD has not settled yet, and could go lower even though this is a very strong support area. On the short term, failure to pass 1.367 can send the Euro down a bit, but such a high volatility environment can stretch levels quite deeply without breaking. We therefore keep our [1367-1375] support area as valid still. If prices stay below our key level for an extended period of time today, our next target around 1.341 (weekly) will come to the fore.
( Posted Monday 8th, 6:10 AM UK )
NB: As a reminder, ES and TF are the continuous futures contract symbols found in TradeStation representing S&P500 and Russell-2000 emini futures. EURUSD is the spot forex quotation for the €/$ exchange rate.
