Strategy 15 July 2013 |
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September Bund futures bounce from the 139.90 level is ongoing and we note that the Elliott wave count/Fibonacci retracement and 55 day moving average come in at 143.60/144.00. A move to and failure in this zone is our favoured scenario.
We have recently seen the market break down from the 2012-2013 uptrend, this is currently located at 143.64 and is expected to act now as additional resistance. A rally back to here and failure would be regarded as a ‘return to point of break down’ and be viewed negatively. The 55 week ma is also found here at 143.27 and is expected to act as additional resistance.
Above 144.00 resistance is layered right up to the 147.20 recent high. We remain of the opinion that the market has topped from a longer term stance and this view will remain entrenched while below the 147.20 high.
The divergence of the weekly and monthly RSI, indicate that the market has in fact topped longer term and the medium term risks remain on the downside. Below 139.90 we look for losses towards 138.41, the September 2012 low. This would be considered to be only the initial downside target. Longer term we look for losses to 132.99/82, the lows from the end of 2011 and the 50% retracement of the 2011-2013 move.
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