Happy halloween

Market  Commentary:

Grim reaper visited wall street and the offices of  MF global  today, to set a festive mood for the kids and jobless of america.  Hopefully, by thanksgiving, we will be giving thanks to god, for giving us this oppurtunities for re-entry, in case there was not enough accumulation during the phase-I of  bull market.

Headlines pointed to concerns about europe resurfacing, but i think the main reasons for monday selloff were two fold.

1. A high percentage of stocks had reached overbought area and the big boys were not willing to buy at those levels.
2. BOJ intervened in currency market, sending USD up and euro down, which in turn affected all other markets.

Meanwhile, MF global became the second big name (after dexia) to fall because of heavy bets in european bonds.  This did not help sentiment on the CME floor, which denied entry to all MF global personnel.  There is important economic data coming this week, and there is FOMC meeting.  In addition, this week also has the G20 leaders meeting, where i expect  currency issues as well as european situation to be the dominant topics.  So, we can expect some risk aversion to continue into tuesday, to test further lows below 1246.5 which is the support established in NY session. 

Technical  Analysis:

As i write this note, ES is at 1240. I am watching 1236.5 area as first level support for tuesday opening.  At this level ES has entered my swing buy area, which is in the chart below is an extension of  last week's work.

About couple of weeks ago (i dont remember the date), i mentioned gold short idea, scaled entry from 1665?-1697, with stop loss at 1699.   I was not actively trading gold, so didnt see the chart till today.  It looks like gold reached a low of 1605,  within days of that email.  And it has bounced up strongly within a week. The chart pattern is not clear on it for swing trades yet, but day trades seem to be in clearly defined pattern.

For tuesday,  crude oil looks to be in a critical junction, in the area of 92-92.5. Recent news indicates that crude oil supply has increased.  But also my research indicates that hedge funds have been betting on rise of commodities in general, and accumulating in october. So a long bias seems better probability,  as my  previous  crude oil blog indicates. A break of the triangle would indicate a decision on this, and a big move is my expectation either tuesday overnight session or on wednesday.  I would take entry on either side, upon the breakout.

News just released tonight that australia cut interest rates.  Though i am not a currency trader, my guess is that AUD would head to test the 1.02 level in november.