08/10/2007

Back on track - futures analysis

From now on, I will be uploading charts from my other computer, but as you can see, they will be of significantly lower quality and resolution. I am still fixing some things up, so look forward to see the old-style charts soon.

Although the market remains in an uptrend, today's doji candle brings another reason to be concerned about breaking through september highs above 3800. Previous stall/reversal patterns, which I pointed out in my previous analysis have been consistently rejected by the bulls. Moreover, if we look in detail, today's close is the highest consecutive since the last 10 sessions. Also, the market has made another higher low and right now is trading above its rising 10-day moving average, which is above 20-day MA. Bearish session in the Dow is definitelly not helping WIG20 to pass through the recent highs, but the fact that it's trading above the record level still favours the bulls.

Now let's take look on the 15-minute timeframe. The market opened near the friday's highs, retested them and then fell below the main resistance level, which is the crucial 3780. This active supply force, which I previously pointed out is still strong enough to prevent the market from going higher. Today's 50-point pullback ended up bouncing off the 61,8% retracement of the latest false range breakout. Then confirmed another support near the 50% retracement level, which in my view produced a clear 1-2-3 bottom short term reversal. Upcoming sessions will be crucial for the bulls for a couple of reasons: the triple top above the 3780 resistance must prove not to be a bull trap 1-2-3 bottom reversal pattern has developed as a partial retracement of the prior move, so this higher low must remain unbreached, to keep the market in a strenghtening state foreign markets must remain above the record levels in order to support the test of july highs by WIG20