09/01/2008

Futures analysis

Yesterday I was expecting, that the slowing futures will pull back more, before finally retesting and breaking through the December lows, but american indexes fell late in the day and caused declines of the global markets. Today's open in America was rather good, so as a result of this, we have another hammer candle in the daily timeframe, though ranging more widely in relation to previous two hammers. The price touched upper band of support zone, which I pointed out yesterday, in my analysis, but came back late in the day, eventually closing in the range of December lows. States are moving mostly sideways at the time of writing, but with more selling pressure now, so that does not imply any reversal yet, here in WIG20 futures. Though a retesting of important levels always means that the crowd is shifting through emotional states, causing volatile price action, which happened today. But until this support zone remains unconfirmed, there is still possibility to move in both ways.

As for the 5-minute timeframe, the price still moves in a declining channel, touching only its lower band, which either means more selling pressure coming into the market or even price exhaustion, creating a possibility to finally establish a bottom. As I often say in my posts, my view comes primarily from the price action, then the catalysts (reaction to news), so my bet is still for reversal/short term bottom and will remain such, until the price stops posting downside spikes. This may continue or change tommorrow, because of important news covering data from the U.S. labour market and also crude inventories, which will determine inflationary pressures and condition of american economy.