Market Report for March 29th 2011

Daily morning market report on futures and forex: ES, TF, EURUSD and US (T-Bond Fut.)

- ES kept on bumping on strong 1312 resistance then fell to Fib overnight as suggested yesterday. A(2H/4H) expansion pattern is now starting to show yet we should see a continuation of the same bullish congestion to regular congestion until/unless 1300 breaks (channel). In the short term, ES will have to test 1308-1309 to check whether it is willing to fight highs again. Longer (4H+/D) need to clear 1309-1312 to aim at recent highs or even 1350. Although energy is now dissipating, this remains a possible scenario.

- TF also shed a few points to test (2H/4H) resilience level on 817 where it should and try and recover again. There is a price point around 821 to determine whether traders will try and take TF back to highs or on the contrary let go to 812 or lower Fib (809?). As mentioned in previous report (incidentally 816 or 812 already), it is likely that the market will require a strong support level to gather strength again. (D) is still definitely in bullish congestion mode and is willing to test highs again, so there is again no visible outlook for a reversal in the short term.

- EURUSD: last report was written over the weekend, and was in fact quite correct with the sudden drop to low 402s. Strong support on 404 was then tested until late morning when some buying took it to Fib around 410 (see Twitter). The Euro will have now to pass 413 and maybe test again strong resistance near 416 which is unlikely to break. On the contrary, erosion along a (2H/4H) channel could lead to test support again (401). A lower (D) support level may be necessary later in the week (393), but we’ll update this scenarion as we go along.

- T-Bond Fut. (US): trying to find support on mid 120s as suggested in previous reports. We should see a continuation of same bearish congestion. 120 12/32 is now a short term test level to determine whether the market needs a lower support (low/mid 119s) or not. Even if US is likely to drift a little further south, a return to bullish congestion to mid 122s is in the cards on (D+/W).

( Posted 7:15 AM UK ) – Limited Twitter updates today.