Sunday, 14 October 2012

Mini Dow shows me the way when ES & $SPX and Russell can't

I am beginning to have serious concerns about the health of the recent leg up and current trend after the QE3 announcement back in early September. All the 40 + big S & P points gains seen on the QE3 announcement have been pared and we are back at crucial 1420 support levels on the ES Z12 and 13200 on the YM Z12. However I am not yet running for the hills. Using ML/RL analysis ( LINK) which shows the possibility of support here at 13226 ( not a LL viz a viz last weeks low) or 1420 ES and failing that perhaps then at 13085 (YM). See above the bearish continuation inside bar pattern which signals a short entry on a break of Fridays low of 13226. Personally i would not enter this way as it is a Friday close/weekend break bar which has caught me out before. I will watch and wait but further falls back towards 13000/12995 now look likely.
The ES has critical support form up sloping reaction lines at 1415 and phyc support at 1400.... an interesting week lies ahead.

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