Update Saturday 12:40pm EST:
Another rather significant piece of Bank news:
Stress Test May Push 14 Banks to Raise Money, FBR’s Miller Says

May 2 (Bloomberg) — U.S. Regulators may compel as many as 14 of the nation’s 19 largest banks to raise common equity based on financial stress tests due to be completed next week, said Paul Miller, an analyst at FBR Capital Markets Corp.

Miller, a former bank examiner, said his estimate assumes regulators will require banks to maintain tangible common equity, one of the most conservative measures of capital, equal to 4 percent of their risk-weighted assets over the next two years, to withstand losses in case the recession worsens. The tests, originally scheduled for release on May 4, are set to be disclosed after U.S. markets close on May 7, according to a government official who spoke on condition of anonymity.

Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc. and the 16 other banks received preliminary results last week and have been debating the findings with regulators. Officials favor tangible common equity of about 4 percent of a bank’s assets and so-called Tier 1 capital worth about 6 percent, people familiar with the tests say. Tangible common equity, or TCE, is a gauge of financial strength that excludes intangibles such as trademarks that can’t be used to make payments. Tier 1 capital is a broader measure monitored by regulators.
… Rest of the article here: Bloomberg

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As it has been rather common lately, worst news are always released after the close, this weekend is no different, 3 banks were taken over by FDIC and Citigroup which was oh so profitable in their earnings report and was doing so great, needs to raise $10,000,000,000 to meet requirements of banks stress test that was put off till next thursday……

Read the rest of this entry »

Hey Traders,

Rather significant close technically today on the daily charts:

Earlier this week ES traded and today closed above 3 highs of 2009  in 872 area, which also happens to be a Fib confluence zone and neckline of what looks like an inverse head & shoulders pattern with a lofty target in low 1100s.

50EMA crossed above flattened and turning up 100Dma, whichis also a bullish technical signal.

Besides 23.6% retracement of the whole bear market (let me gloat one last time about calling this target), there is no clear resistance besides psychological 900 level, January highs and 200 dma which will be around the same price if market was to rally up there on this move up.

Yesterday was end of the month which also produced a buy signal on the monthly charts

Despite all those bullish events in the past two days, there are few things of concern. Firstly, last week produced a weekly hanging man candle which is often a reversal candle, this week followed by a spinning top candle suggesting market indecision also.

Major warning signal is that market bullishness has reached an extremely high level setting a NEW MULTI YEAR HIGH TODAY and going above January reading that marked the rollover from 940s to 660s

Recent BPNYA peaks of 60 or above occured in October 2007, May 2008 and January 2009, if those particular months don’t ring a bell, pull up your SP500 chart :)

As previously mentioned, this 240minute channel will remain the guide to watch for short term technical breakdowns along with watching for some lower lows and lower highs to confirm possible reversal

Have a great weekend

Vlad

Have a great weekend traders!

Contract of the weekend VCM09 (Vodka Cranberry June), suggested stop: none

Feel Free to Follow ESEC Futures on Twitter

Cheers

Vlad

Have a Great Weekend

Update Cash Close:
Quiet a rip into the close causing cash close above some significant levels.
Update 3:20pm EST:
New low $TICK of the day on the test of the ambush zone, looking for a bounce
If ambush is broken looking for support at daily lows, box / fib support.
As always have to be careful in last hour

Update 2:41pm EST:
870 not only daily 50% , but VWAP is also at 869.75

Reading:
Modern Day Goldfinger: Woman steals 500 lbs of gold from her job

Update 2:11pm EST:
Last high had $tick hod confirmation, daily 50% from the lows at 870

Update 1:40pm EST:
ES looking pretty strong in the ambush zone, break above 61% line at 877.75 would mean a likely trip to daily R1 at 883 and weekly R1 at 882.5

Update 1:16pm EST:
Just traded back up to 50% from the high at 874 with new high $TICK of the day

Update 1:07pm EST:
Not much happening , just now 1MM volume was reached on ES.
ES found support at 50% ambush from daily low at 867.75 and continues to trade in the ambush consolidation range.

Update 10:49pm EST:
Globex ambush short is at 868.75, will be watching that level for further clues on the upside, if broken 874 will be the next test. On the downside with lows / 863 3 day 50% expected to act as support.

Update 10:23 am EST
ES  broke recent lows, finding fib support at 863. Target of this particular box play is 852, with 3 week 50% fib support expected at 855.

With that target falling right at 3 week 50-61% ambush zone

Update 10:15am EST:
ES continues to trade in the box, just found an interesting nugget, while trend remains up BPNYA double topped with January high yesterday, could be a serious warning sign:

Good Morning Traders,

ES is currently trading right up to ambush short at 874.75, also top of expected range of ambush consolidation between 863 and 875. With break above 877.75 making a trip to retest the highs likely, which would also be a a mesured move of this box play.

Break below would mean a trip to 3 week ambush at 855.25

Euro continues to find resistance in ambush zone and the top of the previous channel, with trading being rather choppy last few days

Good luck and Good Trading to all

Vlad