Sunday, May 11, 2008

Market update: ES




These are the daily and weekly charts for the ES, the mini S&P 500.
Daily chart:
We may have a legit first retrace to the trend setup in a uptrend coming up:
(1) Trend - The intermediate trend is clearly angling up; we are trending trading which is good.
(2) Suport/resistance - The 15 EMA seems to hold the price and we are buying into the region of Fib 61.8 and recent support (previous highs). I like to enter above the 15 EMA, otherwise I will be buying into immdiate resistance which is bad.
(3) Cycle - We don't have a hook up from %K; %K is low enough but we have no hook back up so we have no trigger to buy.
(4) Momentum - 30-day momentum is still pointing up and MACD is above equilibrium. No divergence whatsoever.
(5) Fractal - Mainly looking at the direction of MACD. Its ok, no fantastic.

Weekly chart:
While we have a potential "first retrace to the trend" setup in a uptrend coming up in the daily, we have also a potential "first retrace to the trend" setup coming up on the weekly but in a downtrend. However, the 15 EMA did not hold the prices and momentum is almost "flat out". What we have here is a downtrend on a weekly with no momentum.

The pricing action might go into a consolidation trapped between the moving averages.

I am watching to see how it develops.

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