ES behaved quite nicely yesterday. It indeed stalled and retraced modestly to 1090 as expected. The situation is not as clear now (6 AM UK) after ES drifted a little lower overnight. At this point in time, if ES tests the former 1090-1093 support area for resistance, the target will then be 1081 (4H-).

TF also hit our 628 target here again trying to land on the 625-628 range which will is the true test area for both our indices (4H-). (4H) is still relatively resilient in terms of energy levels, and does not yet indicate a change of regime. Longer (D/W) time frames however givethe following information: (D) is still in borderline “false recovery” mode, looking for confirmation (range trading) if it stays above salient 625 level. (W) is still in congestion mode with a definite bearish tone. We may therefore see a continuation of (D) range trading dynamics until we see a more definite breakout, anticipated at this point to be on the down side (presumably in a few weeks).

Lucky day yesterday: EURUSD also was very generous with us and dropped to our target (1.27) as mentioned on Twitter. A bounce at this level is certainly in order, but (4H-) still show some bearishness so this support level could be later penetrated. (D/W) time frames still suggest congestion, unless we have a down breakout (range lows), which despite the sudden drop in the last two days is not anticipated at this stage.

Other Symbols:

GBPUSD: No change (D) i.e. still bearish. If 1.538 test level resists, GBPUSD should drop again to near strong support area (1.525 – 1.529)

USDCHF: on its way to parity where it should land (and bounce?)

T-Bond (US): Bounce on support as per previous reports (high D/W resilience). Congestion to expect on current high levels (target: 134 12/32)

( Posted 6:50 AM UK )

Twitter updates today based mainly on (2H/4H) time frames unless market action warrants it.

ES and TF stalled ahead of target yesterday (cf. Twitter), probably on account of low volumes (Labor’s Day in the US). A report update is not quite needed for our indices this morning.

On the other hand, EURUSD stalled on target yesterday (1 pip short to be exact), and remained quite stable all day until it dropped overnight. It broke the 1.282 quite easily, indicating some bearishness at least until 1.278. However while (2H-) time frames indeed point lower, this still only looks like a regular retracement on (4H+). A bottom is not easy to pick though, as this type of configuration generally bounces on support, followed by downward ripples until bearish pressure dissipated. It could very well settle lower than 1.278 (updates on Twitter). Note that higher (D/W) time frames remain in congestion (range trading) mode.

Other Symbols:

GBPUSD: testing support, but still bearish (4H)

USDCHF: landing on key parity (D+)

T-Bond (US): no significant change on strong support level (4H+/D)

( Posted 6:45 AM UK )

To our surprise, ES passed our target easily to reach 1103 on Friday and should now aim toward the 1109-1113 area where it should stall/congest. This bullish move we have followed on (2H/4H) time frames is now confirmed as an upswing on the (D) chart. The (D) range has been 1000-1125, still perceived as a volatile congestion on the (W) chart. The overall tone has now changed from bearish congestion to neutral congestion on those slow time frames, but our toolset does not indicate to any sort of bull run as seen in 2009.

TF follows similar dynamics on its (D) chart, within the 590-670 range. Despite the last week’s surge, we do not yet any definite indication of TF reaching range highs again. In the short term (2H/4H) TF should stall on mid high 640s, and then remain quite resilient. Then, during the course of the week, a retracement will be needed, maybe down to the salient mid-range test point (625). At this point in time, we would tend to believe TF will remain in the upper half of that range (D), and while some adjustment may be needed on non-directional (W) trades (from bearish congestion to neutral / slighly upward congestion), we anticipate no change in longer term range trading.

EURUSD was tracked pretty accurately last week, up to the anticipated test level (1.287). The Euro actually ended the week a little higher, and will most likely reach 1.292 – 1.293 on Monday. (4H-) times frames seem to indicate a possible stall near target, but longer (D/W) time frames while still in a (more bullish) congestion configuration now also point a little higher. We will have to review our outlook using (2H/4H) time frames when we reach our next target.

Quick note on GBPUSD: current upward retracement could reach (4H) range highs.

T-Bond (Symbol: US):
US has hit our retracement target. While this support level looks strong, we cannot discard the level breaking to 130. No change in (D+/W) outlook of a prolonged congestion around current high levels.

( Posted Saturday PM UK )

ES reached high 1080s as mentioned yesterday where it should now stall yet remain high. (4H) now shows a target in the 1093-1095 area. Intraday and daily market patterns have somewhat disconnected since ES broke out above 1062 but the (D/W) outlook has surprisingly little changed. The bearish Daily pattern did not complete when the sudden surge occurred on Sep 1st. We would be inclined to think return to congestion is our preferred scenario unless of course the next salient Fib target is passed.

TF also reached how our 628 target (later pushed to low 630s on Twitter). We here obviously have a similar situation with (4H-) charts now definitely bullish (and overbought). The (4H) chart is clearly pointing higher even if a test of the 625 level as support is possible if not likely. However, with due consideration this may confuse readers, we are still in a “false recovery” congestive scenario on (D/W) charts, and this outlook should not change until/unless TF passes the 639 resistance level.

Dull day for EURUSD yesterday, hovering around the 1.282 test level all day. Having said that, even if such resilience has not yet given wings to the Euro, a definite more bullish tone is visible on (4H-) charts. The Euro should therefore aim higher (1.287 or even slightly higher on 4H+/D charts). We can’t on the other hand discard minor retracements (1H-) along the way.

T-Bond (US): stalling mentioned in last reports has understandably caused some retracement (intraday charts). Resilience to be expected on D/W charts even if 132, or even 131 5/16 could be tested first.

( Posted 7 AM UK )

Twitter Updates until mid afternoon UK.

After breaking the (4H) range on the upside, we anticipated the upward retracement would be limited to the mid 1070s. The breakout was announced on shorter time frames on Tuesday so did not quite surprise us even though it perturbed the (4H+) outlook a bit, now turning to bullish congestion. ES could pass yesterday’s highs to now possibly reach 1088 or even low 1090s, but despite the slight change in tone, interrupting the longer term (D) congestive pattern, ES should eventually turn south again testing 1062 for support (D). (W) chart is still in bearish congestion mode.

TF has been leading ES for quite a while, so TF cues are often used to possibly adjust above commentaries accordingly. TF rose slightly higher than our conservative target yesterday (low 620s). 625-628 is now quite a strong resistance area and we still do not change our (D/W) outlook of a congestion eventually aiming lower within the daily range seen these last few weeks.

EURUSD: We followed it quite successfully to our 1.285 target yesterday (Twitter) where it has then retraced slightly. We will watch for a test of the strong 1.282 resistance level (2H-) with due consideration that (4H+) time frames have now also turned to bullish congestion up to (D) Fib around 1.285 – 1.287. While we do not see the Euro climbing significantly, this may be a sign that recent (D/W) lows will hold, as mentioned in previous reports.

T-Bond (Symbol:US): stalling as mentioned already, but (D/W) could still aim a little higher, congesting near the approaching very strong resistance area (recent highs to max 1.375).

( Posted 6:25 AM UK )

Regular Twitter updates today until 5 PM UK, based on (1+) time frames.

ES found support on (4H) range lows, with (4H+/D) still congesting and hesitating to go lower. Current dynamics will depend on same range boundaries for the next couple of days. We can not discard a breakout either way, or even an upward breakout to Daily Fib (low 1070s) without affecting the (D/W) bearish configuration scenario.

TF bounced just above our target yesterday, then congested all day. 610 is a resistance level in lower (4H-) time frames, possibly opening the door to a rise to low 620s but this would not change our (4H+) outlook of a continued bearish congestion going forward (plain congestion at daily level, more bearish o weekly chart).

EURUSD:

We aim conservatively at 1.264 yesterday as the same bearish congestion is here showing more volatile in shorter time frames (2H-). The Euro can therefore climb to (1H) Fib target (yesterday’s high) or even unconvincingly back to (2H/4H) range highs without yet changing our D/W outlook. Having said that, our D/W scenario has for a while been of a higher low (above 1H2010 lows), which could be : current lows, or 1.244 or 1.22 and further continuation above 1.26 with possible excursions towards mid/high 1.27 will soon confirm that low.

We should then see lower volatility and the exchange rate stabilizing (W+).

( Posted 7:25 AM UK )

Update (forgot latest symbol addition):
T-Bond (Symbol US)  stalling on current high levels, but could then creep higher (weekly chart).  Overall top is near in any case.

Both our indices reversed over the weekend so we corrected our targets on Twitter quite early yesterday morning. ES fell straight all day to now reach major support level and is very close to testing lows as mentioned in last report. The configuration is bearish on (4H-) but there is still a minor chance of seeing the (D/W) patterns end up somewhere above 1032 (bearish congestion. 1000 starts looking as a more likely target (D/W).

TF is obviously in the same mood. We twitted mid afternoon UK that the fall could pause around 608 but it intead kept on losing ground but although still bearish this morning, we will go for a safe target above August lows (592-595). It will at best congest there (same D/W bearish congestion environment), or test a lower support in the 562-575 area. This scenario will be reviewed over the next few days.

EURUSD (our favourite instrument) behaved exactly as expected. It fell to find temporary support on 1.27 first, then reached the bottom of our target range (1.264). There are now indications of congestion on this level, but bears’ appetite is still visible so Aug 24th lows coult be hit again (4H+). Again reported many times, the Euro will be looking at testing a low on the weekly chart. Possible candidate levels at this point are: current prices, 1.244 and 1.221

Additional note on the T-Bond (Symbol: US) : While still bullish, stops could be tightened as target area has been reached (4H+/D)

( Posted 7:10 AM UK )

ES found support in the 1038-1041 range as reported on Friday to bounce within the same (4H) range or just about. Buyers indeed decided to have a go at the upper boundary (1062) late in the day. It isn’t clear whether such optimism will carry through to higher (4H) Fibs, but this is a likely eventuality, at least to the low 1070s. Having said that, we are still clearly in a bearish congestion environment on (4H+/D/W) time frames, hence ES should try and test lows again.

TF also reached a low on 594 i.e. very close to strong (4H-) support on 592 where it bounced strongly to the 617 target given on Twitter on Friday afternoon. Like ES TF is likely to move higher to the next strong resistance in the low to mid 620s area, where the (D/W) bearish congestion environment should take over to drag prices down again. We will however first check TF’s behaviour on target.

EURUSD stayed above 1.27 almost all day, confirming the support level, thus allowing a climb of the Euro, although not quite reaching the 1.278 target area yet. Again, we are typically in a retracement configuration which should like our indices end up in a continuation of the same bearish congestion (4H range). We will here as well first assess EURUSD’s behaviour on target as the Euro could even (unconvincigly) creep a little higher without affecting our longer term (D/W) scenario.

( Posted Saturday AM UK )

ES did test 1062 as anticipated (typical former support turned resistance), to resume falling toward lows again. Bearishness is however decreasing hence support could be found in the 1038-1041 range, or around 1031-1033, where the market will then congest. Very limited bounce potential on support levels. On higher (D/W) time frames, bearish congestion could take to recent lows (1000), to be followed with lasting congestion.

TF which has been leading ES for quite some time, also tested 610 for resistance to then lose ground again. Despite this continuing selling pressure, we do see a possible end to this (4H-) pattern on current lows (strong support on low 590s). We therefore anticipate a bearish congestion on (4H/D) time frames for the moment, with prices hovering within last week’s range.

Back-throttle on EURUSD is taking time to materialize into a significant retracement. The Euro will try and climb to (4H) Fibs, but the market is still looking for a direction, or at least to confirm the 1.264-1.2695 as a support range. Longer (D) time frames seem to confirm a limited upward retracement in this down trend. We will have to review (D+/W) time frames as we go along in the next few weeks, to try and predict the support level as discussed repeatedly in previous reports (weekly cup&handle formation).

( Posted 7 AM UK )

Twitter updates until mid afternoon UK,  based mostly on 4H time frames, unless justified by market action.

ES behaved exactly as anticipated yesterday, bouncing on high 1030s to creep back to low/mid 1050s. This is only a modest retracement, possibly to low 1060s where it will be interesting to see how ES behaves. The bearish congestion visible on higher (4H+/D/W) time frames, and we can’t discard lower lows within a week or so.

TF is obviously following the same dynamics, although its bearishness has been leading for quite a while. It penetrated the 592 level a little without breaking, typical of an attempt to stop the fall near current lows. We then saw a bounce above 600 which should have a very limited follow-through. Just like ES, TF is in bearish congestion mode on higher time frames. Difficult to gauge where TF will end if the next support levels (578 – 562) are broken over the next couple of weeks.

EURUSD has gone into some back-throttle as expected. It would now need to clearly break the 1.2695 level on the upside which could release some buying to (4H+) Fibs. However this would only be a regular upward retracement in a (D/W) downtrend looking for that support which would confirm that the 1H2010 fall is now history. This has been our scenario for quite a while now.

( Posted 7:45 AM UK )