Saturday, July 18, 2009

Market Analysis, July 17/09

Confluence is the theme for these past couple of weeks

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In the bullish scenario, the level to watch for gold is a close above 944. In the bearish case, the level to watch is a close below 905.

Volatility in the Euro has decreased on average for most of this month. The Euro sold off after the New York markets closed, which could be a tell for the open on Sunday afternoon. However, a close above 1.42 will maintain the bull case.

Deja vu? ES looks similar to the Euro and Gold charts. Furthermore, Gold and ES closed at virtually the same price point - 937. ES could confound buyers and sellers by continuing its march to new highs for 2009. Personally, I am looking for support in ES @900, that also implies that buyers should show up in the Euro @1.407 or 1.4000.
Failure of holding 900 in ES means a re-visit to the bottom of the range (875) and the Euro re-tests 1.388.

This is the bull and bear scenario to be aware of, the market will tell us which one gets played out in due time.

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