08/01/2008

Futures analysis

The futures are still slowing down, which resulted in posting a hammer candle in daily timeframe. Today's volume was the biggest since the last nine trading sessions, which may indicate that bottoming process is taking place. Technicals are indicating one thing, but this time, potential catalysts (mostly news) are showing different situation, which makes it hard to judge, where the market is going to move. However, price is the only thing that pays, so if there are no overnight, unexpected gaps, my bet would still remain for more sideway action in the upcoming days. The States are also moving sideways at the time of writing, although there was some speculation on bankrupcy of the lending institutions.

Looking at the intraday data, today's action shows exactly, what I expected yesterday. Sideway action (channel inside the channel) slowed down declining futures, which eventually posted a pullback, reaching 3420 as suggested resistance area. The upper band of the inside channel became support late in the day, followed by a huge downside spike, which was the result of America's open. 3420 remains as the short term resistance along with the declining upper band of the main channel, increasing the significance of eventual retest (whether it is going to be a turning point or not). Macroeconomical data in the U.S. (Pending Home Sales) showed even more slump in the real estate market, spurring concerns again about recession, which is to spread on the global markets.