Market Overview

Game Plan:5/11/12

Game Plan:5/11/12

Market:  Eurex EURO STOXX 50 Index Futures, $FESX_F

Range:  2530/2540

As we said in our Morning Meeting the assets' divergence puzzle is far from solved, the 30/40 interval was broken on the upside on the NFP numbers just to close below after the cash close. The cash on Friday showed the presence of buyers around this area therefore if today the market will be unable to regain the top of the range our short stance will still be in place.

Target:  2450

The Eur/$ will be our lighthouse today to solve the divergence puzzle.


Buy/Sell?:  Long Setup

Reason for trade: Interesting setup early on with a rejection of the 200 day moving average and a gap lower on open. If the 200 day moving average acts as support with the recent lows at 1.2330 then this pair could push higher on general risk off. Stop below recent pivot lows with targets tracking to the recent highs, offering a potential 5.5 reward per risk.


Buy/Sell?:  follow up

Reason for trade: Has turned out to be a text book play. After rejecting the 200 day moving average this pair dropped like a stone and finally closed below a previous support line (now turned resistance), if we hold below the 7.36 mark then we could easily see a stronger move lower to 7.25, if we retrace slightly I would expect resistance at the 7.40 mark and 7.42.

Originally posted at

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Posted-In: News Forex Global Markets


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