29/04/2008

Futures analysis

Two declining moving averages (20- and 50-day) today provided enough resistance, to pushed the market back below the middle line of 2890. It was another momentum-driven decline, which confirmed second consecutive lower high in just one week. Now that the futures begin to gain downside momentum, the nearest price target appears to be around 2820 area - the last level of support before retesting lower band of this whole symmetrical triangle pattern. Today, the only announcement from America - consumer confidence, turned out to be worse than expected (fell to five-year low), so this might indicate first signs of betting for tomorrow's potential news-driven market action.

Today's session appeared to be totally bearish (with little neutral action), as a result of intraday trend change to downside in american stock market yesterday. I only picked one price target, because I did not expect the futures to gain such momentum. Although the price stalled for a while at 2875-90 level, the selling pressure managed to accumulate and pushed it further to 2850, which is prior support/resistance area. American stock market closed in the negative territory again, posting another similar intraday trend changing pattern, just as yesterday. According to my rules, such occurrence favors continuation, so naturally I expect 2875-80 level to act as a resistance tomorrow, if it is going to be touched by the market. If current support of 2850 is broken, then the next downside target will be 2820 - the last two-week double bottom.