01/03/2008

Futures analysis

The last two candles in the daily timeframe remained below the lower band of the pennant pattern and this market is ready to retest its last swing low of 2860. Volume returned again, as we have continuation of the main downtrend. Significance and strength of 2860 support level will depend on how strongly the market is convinced about projected bank losses in the U.S. If price gains enough momentum, then it could go past this support with no looking back, as it did while breaking 3340 back in January. The short term moving averages crossed over on friday, confirming downtrend continuation.

Thursday's decline occurred yet on higher volatility, as the global markets were constantly shifting due to various macroeconomical announcements from America. On friday, the futures finally gained momentum and broke through a couple of support levels on the way. Session closed, finding support at 2925. Upcoming week will bring another important news, which is the ISM index, showing condition of american economy. Intraday support levels, in case of a breakdown on monday include: 2885 and mid-term 2860, mentioned in the first section of this post.