topping or not?

Today YM9m failed to take out the 8280 resistance level.
ES9m failed to close above 875 for two consective days
NQ9m closed above the 1389 level.

so bullish case, we need YM9m to close above 8280
so bearish case,we need NQ9m to stay below 1389.

a confirmation of bearish case is:
YM to close below 7700
ES to close below 831
NQ to close below 1325

Critical turning points may be at hand

Critical turning points may be at hand

Various markets and indicators have reached critical turning points, where the current risk rally will either stall and potentially reverse, or break through and see gains extend. Chief among these is the VIX index, which has dropped to the 38/40 level, which has been the floor for the stock market's so-called fear index since the end of September. A drop below that area will likely signal further gains in shares. The S&P 500 closed above the top of the daily Ichimoku cloud and the 100-day moving average for the first time since June 2008. Those levels need to be sustained for further gains to unfold. Gold has closed below its Ichimoku cloud bottom at 904.44, but still needs to take out key lows between 875/885, and a drop through there would also suggest further improvement in risk appetites. The USD index is still inside the cloud, but a bearish crossover suggests a drop through the cloud base and further USD weakness may lie ahead. EUR/USD looks similar, but in reverse, and a daily close above 1.3438 on Monday may open up further gains that would likely exceed last week's highs at 1.3740. USD/JPY closed above its 200-day moving average at 99.16 and is currently above its cloud, as are all the JPY-crosses, but the crosses are still below their own 200-day moving averages. Clearly some significant technical hurdles have been cleared, but the question is will they be sustained?

838-846 potential reversal area

ESH4 updates:

mkt rally on better data signal stablization of the economy,we may once again run into a range mkt like we did in Dec08-Feb09 until further data shows the direction. So day trading may be best way to profit from this market.

ES may test 838 breakdown area this or next week and that's good place to short,stops shall be place beyong 870 on swing trade. For a DT, also a good point to place your short there.

NQH9/ESH9 updates

NQ need to break 1150 to see further downsides.
ES at important S/R level(770),we reverse here or we may go higher to 79ish

below is a S&P cash EW chart, as long long 804 hold we are still in bear mkt

ES may test 770 are before going down

some fib study of ESH9,the retracement shall extended to 770 and watch the price action around this level to decide to short or not.

EW of S&P big picture

The S&P Futures looks to still be trading in wave 4) correction with irregular wave B, discussed this past week. The current wave count is telling us that wave C may already be on the way with the next resistance, shown around 720, which is the top of black wave A. After this we will be looking for lower prices in blue wave 5).

DX double top? EU long entry at 12560/12600

we can long eu if us$ index test 88.50 again at 12560/12600 level for a double top play.

we will tank soon? EW of SPY and GBP/JPY

ES wave 5 under way to test Nov low?(from http://tradingsigns.blogspot.com/)

GBP/JPY has a target of 114-116 ?(chart drawn by Piters from FF)

let's ride the sweet down move.

see how FIB matters for ES trading

ES break below 38.2FB and bounced off 23.6 FB,short order pending at 38.2FB(852 area)

GJ is ready to drop

GJ price stays below H4 gann already.,target at 131.46(H4 50EMA).wait for Gu to clear the 14760 support then we will drop more faster.
short order filled at 134.65.SL 100-150pips TP@ 131.46

shorted GU@14760,TP 14580 area, SL 14860

where will we go before OE?

bear and bull are so confused by the movement of market.To make it clear,i think we are still in a range before any imporvement or deterioration happening.

we need to see how the stimulus package& banks solution effects on the real economy for a few weeks at least to justify a final plunge of the market. Before that we are still in a big range 800-900 mostly.

ES may have another leg up to 905 area at most(or just 874-890) and head down from there to the low of the range.But we need to be flexible to fade this rally and watch out the correlation in different market.Next week promises more volatility and traders will need to remain flexible and avoid getting married to directional positions while market conviction remains so weak.

US$ index had hard time to break above 86.78;watching out the assending TL if we break below it and 84 area,us$ are setted for deeper weakness.The stimulas packages shall weighs on the us$.

the 10yrs notes kept losing ground on next week's larger than usual aution.

Tue $32B in 3 yr notes at 1 pm.Wed $21B in 10 yr notes at 1 pm.Thur $14B in 30 yr notes at 1 pm.Also, the Treasury is increasing its debt offering to record levels due to the financial crisis.Offering new monthly 7-year note auctions. Doubling 30-year auctions from 4 to 8 per year, may go monthly.Considering 4-year notes, 20-year bond and a "super-long" 50-year bond.

Anyone who is trading in uk, there is a good short entry now on FTSE march contract.

shorted EG around 0.8982/EU 12950

EG shorted 0.8982 TP previous 0.8800-0.8850/SL 0.9030
EU shorted 1.2950 TP 1.23-1.25/SL 1.3085

closed postion for EG0.8945 EU 12850

closed my short of GJ@12730/

3.4% gain.
one lession learned is that: dont trade forex at month end close on friday,too wired price action.

shorted GU at 14236 SL 14290 TP 14080/14100 area,intraday play.

closed short of GU at 1.4258 on better than expected data.

inflation expectation emerging

1)For the first time since 2007, Treasury investors are betting that inflation will accelerate. The yield on 10-year notes exceeds the consumer price index by 2.74 percentage points, the most since December 2006. The gap between two- and 10-year rates widened at the fastest pace in a year last month as traders demanded more compensation for longer-term debt.

Gold/oil shall again bought as protection against inflation while US$ will start to weaken.Pls pay attention to these new development closely.

2)my short on GJ turns out to be good as for now. Looking at EU,i'm pretty sure we will revisit 123-125 area before any major correction higher.

ES is more predictable than forex

1)buy and sell at S/R in previous swing
look at the chart below of ES.the green lines were draw in previous trading days. See ES bounced off them?


the easy to trade ES is to buy & sell at these pre-marked area to give you best R/R.



2)Trade what you are sure.
ES is more predictable But i didnt trade what is easier,i traded GBP/JPY. My bias is short as stock market dropped.But the the correlation between jpy strength didnt show up. That's a lesson to share.


Two possible reasons:
=risk unwinding almost done. And JPY need a correction lower. in this case we will see stock market down together with US$,need more days to confirm this development.
=month end+friday repostion


I'm still short GJ with average cost 12910,160pips under water(3.5% paper lose),i will waiting for sunday asian open to decide to cut or hold due to the reason No.2.



3)Back to business


sentiment remains extremely fickle and the pessimism that returned by week's end may dissipate as quickly as it returned and traders will need to remain flexible. i will only be more bearish we close below 800 at least by H4 candle.


ES support are 818/811/800/784/741
ES resistance are 836/848/858/865/873




$ index are not far away from strong resistance,a daily close above 8680,we will see 89.20. With euro been sold so aggesively, i think we are very likely to test that area.


EU may test the low of 12300-12400 again below a corerction higher in this case.Interestingly EG close below the former support 8837 area,we will see a test of 86XX area if that's not a bear trap.


10yr bond close below strong support 12328,then lower we go.119 may coming. What does that mean? weaken US$ or higher gold? For next week i think we shall eye on more risk aversion in short term and be flexible.

ES testing 850 for direction,US$ at resistance

us$ index bounced off 84 as expected and now we are at resistance 85.87 area,need the PA to lead us the way forward,a small pullback shall be healthy for us$ strength.We need us$ to stay aboe 85.87 to see more downsides of stock market.

ES gave up most of yesterday's gain and tested 849 support and so far this area holds.wait for tomorrow's GDP number to see whether we will up or down,850 is pivotal.

support are 842/832,resistance are 857/866/873. i'm flat now with 1% gain in 2 days.

usd$ index may test 84 & oil failed to test 48?

more gain in euro & gbp is expected. euro shall test minor resistant 1.33

oil failed on 1st test of 48 resistance which was mentione in my previous post,support shall be around 4640/4400/4100.

outlook next week

1)USD strength may be setting up for a reversal,so as the stock market.

The fundamental environment certainly warrants risk aversion, but upcoming developments may yet inspire a recovery in sentiment. The key events to watching are the progress of the US fiscal stimulus package and the impending second round of TARP capital allocations. As prospects for their passage/implementation increase, both have the potential to fortify investor sentiment.

EUR/USD, a daily close above the 1.3050/3100 area would suggest scope for a rebound back to 1.3500/50 area. The USD index also posted a significant long-legged doji on daily candles suggesting a downside reversal, and a daily close below 85.80 points to weakness back to the 84.00 area initially.

2)stock market may see a bear market rally.

If TARP helps to remove the toxic assets off their balance sheet in to a "bad" bank as rumored,we could see a rebounded in banking sectors to lead a BEAR market rally.Financials are so oversold while we still above Nov low,which leave to being favor of long side play in coming Feb.

ESH9 Level to watch:

853area, a daily close above 853 may take us to 870-875 area. Other minus levels are 834/843.

supports are 818/808/800.

3)watch out other market for indication of market direction.

Crude close strongly on friday and likely to test 48-50 area next week.

Gold is also breakout to test a multi-months TL,we expect it will fail on more risk taking.900 is the level to watch closely.

10yrs notes close to important level 123.30, a daily close below will support our view of risk taking coming back.

next week plan: favor buying dip in risk assets.

long euro,GBP against dollar and jpy.

shorting gold on failing break above 900.

we need to break 797-800 area to see Nov low

ES Nov low is 0.382 extension of drop from 942-797,Nov low is in the card if we close below 797.

And we need to break 1107-1115 area for NQ to confirm we are testing nov lows.

My bias is short on any pop in ES,first resistance around 830/853.but be awear we may still in a range market unless we break 797 and 1107.

clear my short positiion @836

i clear my positon@836,ES may test 830 or even 818 area before a sizeable bounce.my plan is short after the possible bounce to 852-856 area. If market continues to tank,shall follow to short on clean break below 818.

ES testing 852-856 strong support area

with worse than expected retail sales data this morning,ES gap down open below the strong support area 852-856,we need a daily close below it to see more downside movement,support level are 830/822/815,we will test 785/740 after a daily close below 815.

UJ is testing 89 area, a test of 87 area is in the card if a daily close below 8850.we need uj to close below 89 to confirm ES's close below 850.

.

us 10yrs note are testing 12680 area resistant,we need it to close above that to see more stock weakness.stay tune.

forex mkt &ES future

UJ need to break down 90 area to see more gains which is 38.2% RE of last move up from 87.17 to 94.59
























EJ closed below 123 area,a test of 119 or even 117 is quite possible next week. First resistance around 12550 area(H4 100/200hr EMA)













ES need to close below 887 to see more down side which is H1 TL support and 61.8% RE of 852-942
minor support around 875-878 area and major support 852 area need to be cracked to see a real sell off.
stil hold under water ES short with average price@875,TP at 741.