Tue, 18 May 2010 update
Good day everybody,
So there is an issue for today.
First of all I want to warn you that the signal that I'll be talking about is very unstable as a market now, so be carefull. But this is what I'll be watching for...
Let's look at daily chart first. Market has reached oversold, OP target just above monthly Fib support (check for monthly chart from my weekly research). There are two levels that I'll be watching for possible short entering - 1.2613 - Weekly Pivot point and Fib support, and 1.2788-1.2792 Confluence resistance area and daily overbought level. The second one is ideal for entering short to my mind. But it's too far.
Let's look at 4-hour chart. We can get a buy signal a bit later today. If we assume that C point in place already, then XOP target in Agreement with Weekly Pivot point. That is where market will follow if Buy signal will work.
For confirmation of a signal we need close below 3x3 DMA then above. After that may be we can enter long. But, if market will close below 1.2300 then - it will be a sign that this signal have failed. Be carefull, thrust down on 4-hour chart is not perfect one. But I'll be watching for this development.