Wednesday, December 05, 2007

Market Outlook RUT for Dec 5th '07


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

Similar to SPY, RUT is also drifting down. Yet, a stronger support is near at 750.

60mins: Congestion.

Same as yesterday, except RUT now has to deal with the 750 - 752 support level. MTFS seems to still point a little downward, so behaviour on this key level will be interesting to watch. It is likely that RUT will remain fairly direction less on that level.

Daily: congestion
As explained a couple of days ago, we have had a typical failed recovery pattern, so we now have to see how it develops (double bottom, cup & handle, or ... downright fall!). For the time being, there is not enough energy for any scenario to develop fast.
Note: the cycle detection also gives us a dual frequency possibly causing a momentary congestion due to (near) phase opposition.

Weekly: return to the trading range, but lower bias still.
We're now back in our [750-875] range, with a lower bias. One can only hope that 750 will hold...