16/07/2008

Futures analysis

The futures still remain below main long term resistance of 2450. Though today's session showed little volatility and ended up posting a low-range candle in the daily timeframe. On one hand, there is actually no sign of anything, that I could consider a selling climax, but on the other hand, we have technicals from the global markets. WIG20 futures are in the middle of a significant retest, which happens to align with a top on Crude Oil and maybe a bottom on Dollar. Conclusion is, that the global markets have entered a crucial period, which is to solve short and mid term situation again. The most important short term volatility catalyst is of course earnings reports season, which everybody is paying attention to, especially in the States.

The market has slowed down recently, as you can see on the intraday chart. Today's session went in a bearish/neutral sentiment, which resulted in posting a bear trap below previous day's low of 2417. We have an intraday support now, which has been confirmed and will act as a good reference point for upcoming trading sessions. 2407-17 area became an emergency support level. Now we have to wait and see the result of retesting 2450 from the downside, which will show if the futures are strong enough to go back above it and develop a longer pullback, than previously. I would rather expect an uptrend tomorrow, unless the market gaps up in the morning. The States rallied nicely today and did not show any signs of reversing current trend to downside, so according to my rules, there are greater odds of continuation than reversal and this occurrence is going to be reflected by WIG20 futures here. If the market reaches above 2450, I marked the nearest significant resistance of 2475, which corresponds with yesterday's continuation gap.