Tuesday, December 04, 2007

Market Outlook RUT for Dec 4th '07


Dominant TF: 60mins & Daily.
Swings: DN-DN-DN (from UP-UP-DN)
Market direction: Congestion.

Like other symbols, RUT is also drifting down.

60mins: Congestion.

Again, MTFS points towards a congestion with lower bias, but now that PR1 seems broken, there may be some acceleration to the next support level, close to 757 or even 750.

Daily: congestion
This early MTFS crossover is very seldom conducive to a definite change in direction (typical failed recovery pattern). A congestion is likely, and RUT should try and find a stronger base for support.
RUT indeed seems to show evidence of a cycle turning point, so any retracement should be limited (757, and 750 in the worst scenario).
Note: the cycle detection also gives us a dual frequency with a momentary congestion due to phase opposition.

Weekly: return to the trading range, but lower bias still.

We're now back in our [750-875] range, and still pretty much directionless. It seems that the 'double top' scenario is now a little more remote, but we should wait for the bar to at least change colour first. Until then the bias remains down.