Which ball to keep your eyes on? - 3 Nov 2011

A quick and short note...

In the last analysis done on 1 November, I wrote:

" The week just started and if it ends at the current level or lower, the weekly ES chart would be posting a very bearish candlestick pattern. As of yesteray's close, the trend is still up and the retracement looks to be deep. The daily ES chart has a clear failure to breakout and stay above the 200MA, and it looks set to follow through with more downside for today, particularly with an early but strong Sell signal today. There is support at 1228, and at time of writing, the ES was already trading at 1228. The 30 mins chart is showing that the support should hold, failing which a lot more downside would follow through later in the week.
Looking at the TTR model, it appears as this downside risk is likely to continue... "

And from then on, events were happening leading to a build up at the G20 summit, particularly with the Greek referendum and Italian emergency meetings. Attendees to a private gathering two weeks ago heard about Italy being the next likely to face default, and it looks to be surfacing, at least in the media streams. All these are having a bearish effect on the markets and the downtrend is strong (and a deep retracement, if at the least).

Interesting developments are happening as one is left wondering who to keep an eye out on... Greece or Italy...
If the charts are telling me anything, it looks as if the train has left the last station and is heading over the cliff... (more on that over the weekend analysis).

Hang on!

The MadScientist
3 November 2011

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