Hey Traders,

Last week I posted Is it Finally time to binge FazPAIgNe? where I ventured to guess that market might be due for some pullback here. I am by no means marrying that view and will let the stops do the work, but here is my reasoning:

Firstly, bullish percent Index is within 0.06 of the highs it reached before previous 50 point pullback, and 75s on BPNYA has not been seen since before bear market has started:

Secondly, on the weekly chart ES is coming up to a downtrendline that has provided some resistance:

Even though options expiration is not till next week,  max pain for June on SPY is 83, which is ~830 ES, here is a post before May OPEX - “Welcome to Opex Madness”, ES retraced quickly towards that level, so would expect at least some move towards that level,considering ES is now trading 110 pts above.

Along with with very oversold dollar, that should cause equities to pullback on a rebound, that is the bearish case.

As far as bullish case is concerned, ES continues to trade above 200dma with 50ema closing in on what would be a bullish cross. Weekly candle has closed above the previous 2009 January high, which is bullish for ES.  ES has been clearly in a strong uptrend and some technicals will have to break down to be able to add to the bearish case.

Bias, opex , bullishness % index are all indicators to give clues, but it’s only price that pays, so will be watching following immediate s/rlevels for futher direciton clues:

On the upside will be watching 845-848 ambush zone for resistance, if it breaks then ES is becomes very likely to retest the rally highs of 957.50 with Weekly R1 right above at 959.25.

On the downside will be watching 830.5 fib confluence zone / ambush for support, below there 922s, which is previous swing low and also ambush.

As always will keep posting daily and intraday updates as new technical developments take place.

My updates on twitter @esecfutures for new post and technical level notifications, as well for my overnight trading levels which I do not post on the blog.

Have a great week

Cheers

Vlad

Hey Traders,

Euro has made some huge moves in the past few weeks, and this week should be no different.

Euro sold off after coming within 50 pips of important trendline on the daily charts as dollar gained some strength to end the week. Key trendline will be near the rally/yearly highs and should be key line of defense for the euro bears.

On the downside, there is a fib confluence from 2 yearly lows at 1.3610-1.3620 level and also another one right around 1.34. With upward channel trendline also expected to act as support, it would be a much higher probability long entry if the channel matched up with one of the fib confluences.

Zooming in further, there is a channel on the hourly chart that has been in place for the past few month , with bottom of the channel is right above ambush zone which is expected to provide support.

One of the better set ups I see, is if euro retraces back to 1.41 zone which has also acted as support on several occasions last week and is also fib confluence zone.

Note, that 1.41 level would be slight different if lower low than 1.3932 is made and the trendline / amsbush zone on the hourly is tagged first. Will keep you posted in intraday and daily updates.

Will keep scalping within the range until euro gets to one of the highlighted support/resistance levels.

Have a great week

Vlad

Source: Chart of The Day

The decline in crude oil prices that began in mid-2008 was historic, plunging over $90 per barrel in just eight months. Over the past four months, however, crude oil prices have spiked up nearly $30 per barrel. Today’s chart provides some perspective on the historic decline and recent spike with a long-term view of inflation-adjusted West Texas Intermediate Crude. Today’s chart illustrates that most oil price spikes were a result of Middle East crises and often preceded or coincided with a US recession. It is also interesting to note that the recent spike in oil prices has brought the price of oil back to a relatively high level, a level that was surpassed only during the major price spikes of 1979-1982 and 2005-2008.