Jan 282011

Last week I wrote:

I believe the ES is going to make a temporary top. It could continue up to 1330, that’s about the top of my estimated range for the top. So we have ES in “top territory” as well as Stoxx.

After a week of bringing in more late longs, we start to see some long liquidation.  1300 got rejected again and this time ES dove down into the next lower balance area.  This area is key.  If it holds then another test of 1300 could be in the works.  If this area (around 76.25) doesn’t hold, then we have a correction and that will likely scare off more late longs and even bring in some short interest.

After I uploaded my image, 76.25 broke.  I really expected that to hold today so this is really major.  It reminds me of the breakout we got from the bottom Dec 3 – from one end of the range to the other and then it kept on going.

I also wrote about Stoxx last week.  While ES is testing 1300 Stoxx is testing 3000.  nice round numbers.  Stoxx is even more extended which makes it due for a correction.  I’ve drawn arrows for what I think will happen, mainly a 33-50% retracement and then continuation up.  I made this chart an hour ago, it has since dropped quite a bit.

I’ll post my trade results for the week & my latest treading spreadsheet this weekend.  A good week for me on the Bund.  Have a good one!

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