Value of Perfect Information

A quick review of last week’s guidance

Last week I said:  “The eur/usd ended another week near the low of the week, I would expect it to make a probe to the upside to touch the area between the 20 and 50 EMA’s, before resuming a downward price trajectory.  This week I would be surprised to see the eur/usd make it substantially below 1.414 “

Looks like the eur/usd began the upward retracement I had mentioned, and still has some ways to go on the upside.  The low of the week was roughly 1.422 and below this level is where my ST upside bias would be invalidated.

Regarding the SPX I said:  “Considering the sharp drop in the eur/usd I would expect the market to move downward this week – I will look for the market to confirm this understanding if it can take out 1088.5 by the middle of the week.  If 1088.5 is taken out by the middle of the week, I would look for 1080, then 1072 and then 1062.  If ES cannot take out 1088.5 by the middle of the week, I would look for a rally to the aforementioned 1125-1140 range.”

ES stayed strong early in the week and never made it below 1088.5.  The high of the week was just short of the 1125 level.  This week, I would think it’s more probable that the ES makes at least an ST top at the beginning of the week and finishes the week below where it started it.  On the upside, I am still looking for the 1125-1140 range to contain any upward price movement.  On the downside I’m looking for 1109, 1102, 1098(gap-fill), 1094 and 1085 as a possible bearish extension target.  I will gain confidence in this outlook if the ES can close below 1109-1108 by the middle of the week.

Fig. 1 – ES

Good luck trading.

Categories: Charts ,Commentary ,Exclusive ,Markets

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