05/01/2008

Futures analysis

Friday's session confirmed the resistance area, that I pointed out in my previous analysis. This zone lies between prior level of support 3460 and its upper band is 23,6% Fibonacci retracement of the whole latest decline. It was quite volatile day, because of major catalysts, that influenced the global markets. Yesterday's news covered Nonfarm Payrolls, which appeared to be a lot worse than expected (causing recession speculation again) and also, remaining data from the labour market in America (Unemployment Rate also exceeded expectations). Now, that the futures firstly posted a lower high on 27th of December, then confirmed previously mentioned resistance area, retest of December lows appears to be inevitable in upcoming week. 50-day moving average crossed below the 100-day MA on friday, which is a result of poor condition of american economy, that is going to spread all over the global markets. Breaking below the plotted (yet) rising trendline will only leave us the august spike to retest, before confirming the bear market here.

Intraday data shows, that the price is recently declining in a channel, though - as it can be seen on the chart - not perfectly. If you look at the previous analysis, the upper band of this channel is now adjusted in relation to prior position. This is, because the futures acted just as I expected, violating previous upper line and finding resistance at 3495. After confirming this level, the price started to decline a little, but until the news announcement, action was mostly sideways. Eventually, WIG20 futures closed below previous level of support, which is 3420 and will probably move more to the downside, because of highly negative close in the United States. Just 60 points are left to retest the lows established on 18th and 19th of December. How fast the retest will occur is going to depend on accuracy of the channel, that I plotted (especially its lower band).