The last two days' market action has confirmed a (bear) rally that should take the ES mini S&P500 futures up to about 1240 to test the Head & Shoulders neckline resistance.
A Buy signal has emerged and this should be a short ride up. Expect some volatility with Ben Bernanke due to announce measures at the Jackson Hole Fed Meeting on Friday 26 August. This was the place where QE2 was birthed and the market are expecting some sort of Fed action. However, note that if disappointed, this rally may be sold on the news.
Technically, the 30mins ES charts look good for a sustained rally as does the daily chart. The tests on the EMAs and 200MA have been indicating a nice test and hold pattern over the past three days but bearing in mind (pun not intended) that a significant top has been put in place, so muted should this rally be. Certainly not for the faint hearted and exposure risk should be kept low.
The MadScientist - 25 August 2011
Note: Any material posted here is of my sole opinion, and my opinion may differ or change. This is NOT a solicitation nor advice proceed with anything else as a consequence of reading these materials. The materials presented here are intended for educational purposes only.
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