ES played tricks with us yesterday, as this sometimes happens after a weekend break. The steep fall on Friday did not have the follow-through as anticipated. We indeed expected a pause near 1270 but range lows did not break. The current upside retracement bumped onto a fairly strong resistance on low 1280s and now looks set to potentially test a higher Fib. Short Kase and (2H-) charts indeed marginal resilience up to high 1280s. We may therefore see a continuation of (4H) range trading, probably with lower highs, until the market is ready to test lows again. This potential turning point on (D/W) justifies the current hesitation, with however relatively clear decision points within the (2H/4H) range.
TF also proved a little difficult, hovering in bearish congestion, coming down to 771.8 (vs. our 1st 771.7 target…) where it bounced back to an important test level around 780, now ready to go for a higher Fib (bullish congestion to 787?). The abortion of the last down pattern (exogenous factor?) is however not translating here either in a clear reversal pattern, so we should anticipate a congestion if not a return to the former down pattern once this retracement is over. Short term traders may want to follow a Kase chart until the situation clarifies on (1H+) charts. Again, logic would suggest a gravity call, but resilience and hesitation remain high at this time.
EURUSD clawed back to the strong resistance area (1.372-1.374) and most time frames indicate a willingness to give it a bit of a fight. As reported recently, this potential breakout could unleash substantial buying. Continued hesitation (bullish congestion) is also possible, with no visible retracement in sight…
T-Bond Fut. (US): Same on-going swing trading on (2H), i.e. no change in (4H+) outlook. Again, some emerging upward pattern pattern is showing, with no energy to go along with it. A breakout could bring the required ‘spark’ but at the same time this congestion may continue for quite a while. Could this be due to uncertainty regarding the (dreadful) consequences of ‘quantitative easing’ ?
( Posted 7:30 AM UK ) – Twitter updates today
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