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After making an upward gap, market ranged all week between 143.87 and 144.84, with a double top on the latter.
Result for the week is almost a doji long legs, isolated from last week candle. POC is at 144.19 and also the peak volume of a non directionnal week. Pivot point for the week is at 144.36, almost where the market closed (144.33) while R1 is at the upper hedge of week range and S1 at the lower hedge of such range. It's a balanced market.
If monday opens lower than 143.87 and does not quote higher during all day, the market may very well make a lost child on a weekly basis, a very powerful reverse trend signal marking the end of the upward trend since february 3rd.
If market opens higher than 144.84 and does not quote lower than such level all day long, sky is the limit......
An opening below 143.87 or higher than 144.84 and a failure to follow through, with prices coming back into last week range may induce a strong move opposite to the first intented market direction.
If market opens within last week range, the exit from such range shall give next trend.
Cyprus' situation developments are so important upon next trend that I will wait for monday's opening before making any trading plan for tomorrow. Therefore, I will not post friday's session analysis for I think it is useless.
Last Friday was a down day. Average volume and range.
The two noteworthy things about Friday are that after making a new high (above Tuesday's high) the market dropped on high volume; And that it did not drop lower than previous day's VAL.
The weekly chart shows a small range week on rising volume. A doji. Though the market has moved up from last week due to the gap made on Monday.
The PoC in the 5-day volume profiles chart has not changed from Friday's. The chart shows three main levels:
• 144.22. This week's PoC
• 143.08 - 143.32
• 140.65 - 140.95.
The daily chart shows a nice pattern of alternating up and down days.
The daily volume profiles show that the VALs of the last 5 days have been rising. There are buying tails below these VALs, but Friday's is very short.
This market has been driven by the news and rumors about the Cyprus Crisis (whether this is really the case or the crisis has been used to push the market around makes no difference). It will continue to do so for at least the next two days. Tonight the Troika and Cyprus representatives will meet to find an agreement, tomorrow the Cyprus Parliament will vote about this agreement. News/rumors already say that the 17b € talked about till now will not suffice, Cyprus needs at least 19b €. I doubt that any agreement found will be the end of the story: we will see the same pattern as in Greece: after one hole is filled the next one will open.
Just looking at the charts I'd say that the market is bound to drop. The market made a little double top intra-week, the weekly chart shows a doji on rising volume just hovering above the gap, the up/down pattern in the daily chart simply looks weak.
But in view of the ongoing political stuff there is only one thing to do: to monitor the news and the reaction of the market.
A rise above 144.58 on high volume should take the market to new highs. A drop below 144.00 down to at least fill the gap from Monday. The key will be high volume and speed, low volume actions have to be taken with care.
Friday afternoon most action took place between 144.27 and 144.42. If there are no real news tomorrow morning then I expect the market to open within this range. First clues will come from Asian and Forex Markets.
There are only two reports scheduled in the afternoon for the US market.
Next week is a short one: On Friday Exchanges will be closed due to Good Friday. Eurex will be closed on Easter Monday (2013-04-01) too.
US futures indicates that stock markets are reacting positively to the last developments of Cyprus issue.
I am expecting an downard gap this morning. As can be seen on the 4H graph, BUND was drawing a rising square triangle. Target in case of exit by below is 143.43 but 143.54 will do (lower hedge of the gap opened last monday).
I am therefore expecting last monday gap to be closed early this week.
The market has not moved outside the range and is regularly coming back to value. Again reactive sellers on top and buyers on the bottom. Interesting zones remain untouched.
I fully agree with @MARS. My bias is to go long rather than short due to such a low volume on the buying tail and cummulated volume right at the current HOD. But we will see.
The higher limit of the weekly gap proved again to be a solid support.
Market opened with a gap down and from LoD (143.91), quoted about 8.15 nearby the lower limit of last week range. Reactive Buyers made it rose and afterwards prices drifted horizontally in a 144 - 144.20 range untill 1.30 am when the market begun a step rise and was at the higher limit of last week range by 5.30 pm (144.80 vs 144.84). After 5.30 pm, a tentative to go higher failed and reactive Sellers brung back prices. Closing was about 144.70.
All last week range was therefore traveled in one day !
POC is at an hefty 144.74. but bigger volume is around 144.10 only, with two other nodes, one at POC and the other one, smaller, at 144.40. Two valleys are in between.
On the 4H graph, we can see that three tops and three bottoms, with MA 44 in support.
In the case a 4 H candle closes above 144.90, target is 145.70 and 144.85 shall become a support.
If 144.90 is tested tomorrow morning and holds, prices may very well go back to where MA 44 lies (about 143.20 tomorrow).
Below the 143.90 level, same supports than last week.
I do not know whether Bund future contract will finally exit the 143.90 - 144.90 range by above or by below but I guess that the exit will be a violent one.
Average volume but well above average range. An outside day, an up day. But the PoC (144.10) is down. VA is very wide and encompasses those of the previous week. A two-node distribution.
The market opened with a gap down but quickly started to reverse and move up after making its LoD (143.91). Then 4 hours on low volume in a trading range followed. At 13:00 CET the market took off and shot up on rising volume to make its HoD (144.93) at 18:00 CET.
ESTX and DAX had opened gap up but ended the day in red. US stock market also dropped in spite of the positive numbers. Euro also nose-dived after being up in the morning.
Part of the drop (and rise in Treasuries) is attributed to the remarks of Mr. Djisselbloem about Cyprus.
The PoC in the 5-day volume profiles chart has not changed from Friday's. The chart shows still three main levels:
• 144.22. This week's PoC
• 143.08 - 143.32
• 140.65 - 140.95.
The daily chart continues to show this nice pattern of alternating up and down days.
Interestingly the daily volume profiles show that today's PoC (144.10) has dropped to be the lowest of the last 5 days.
Using hindsight the reaction of the market in the first forty minutes was key for the rest of the day: the low was quickly rejected and below 144.01 there was heavy buying. Market came back to about 144.02 and then took off: looks like someone had absorbed all the selling and then pushed up the market, squeezing the shorts.
There are several reports scheduled tomorrow for the US markets.
Friday and today show (reactive) selling above 144.65, today there was buying below 144.01 in line with last Monday's buying below 144.97.
So these two levels seem to be important.
I'm not sure that the up trend of today will continue: a drop below 144.65 should take the market down to 144.40. A move up to a new high will likely result in rejection again. If this alternating pattern of up/down days continues we will see a down day tomorrow.
