cf. RUT post below
Thursday, January 31, 2008
Market Outlook RUT for Jan 31st '08
Dominant TF: 60mins taking over, Daily declining
Swings: DN-DN-DN
Cycles: unreliable (too trendy)
Market Direction: volatile, lower
Position (60mins): short
A lot of volatility and disappointment on that rate cut, now what next?
60mins: pessimistic
RUT reached Fib target on Fed announcement then reversed quickly. The negative sentiment has been prevailing so no surprise at all in fact. RUT can now try and find support around 693, however the MM pivot level at 687.5 is stronger. MTFS and Entropy are also pointing downward. The MTFS green line is still high enough to cushion the downward movement, so no free fall in sight.
The Swing indicator is Down, but is too steep to be regarded as stable right now.
Daily: upward retracement lacking steam
We saw quite some time ago a MTFS crossover that wasn't lookig too good, so we shouldn't be surprised if the recovery is now stalling. Despite yesterday's reversal, there is no downward pressure just yet, so we have to wait for the pattern to develop fully over the next few days. For the time being, we should see some congestion with a lower bias.
Weekly: back to lows...?
The week ended on a red bar, bearish looking MTFS and Entropy. What more can i say. If MTFS had shown a green line holding up high while the white line drops sharply, one would have likely had a recovery potential, but this figure is somewhat bearish. Having said that, there may be an upward retracement (if/when MTFS white line turns around) and a probable congestion in the [625 - 687] trading range indicated by Entropy bottoming out.
Wednesday, January 30, 2008
Market Outlook NDX for Jan 30th '08
Dominant TF: Daily
Swings: UP-DN-DN
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): congestion
Position (60mins): flat, however selling 2150 call spreads is still a very conservative bet, Feb 2000 is pretty safe too
Market is relatively quiet now ahead of Fed meeting, so we're just going to read what the charts have to tell us at this time, knowing martlet is full of surprises. Having said that, if i were to bet on a reaction to the announcement at the end of the week, i would certainly have a short bias.
60mins: congestion with a remaining slight upward bias.
MTFS lines are about flat in median territory, so is Entropy, and not help from levels.
Technically the Swing is UP, but can NDX really creep up to 1880? New energy is needed and it can only come from an exogenous source like a reaction to a rate cut or absence of it. Answer in a few days...
Daily: support confirmed but...
Hardly any change since last report:
While we certainly have Entropy coming up, MTFS has not shown the best looking line crossover, and Entropy is only picking up slightly from its recent lows. Again, this is not the easiest scenario, but i would anticipate continuation of the congestion... with a possibility to go much lower if some new recession news spook the market, or if the Fed doesn't act soon.
Weekly: definite down bias still
No panic, but 1750 could be tested again, or at least congestion in the lower part of the trading range may happen. One can notice that 2000 technically never broke as a strong resistance level even if it appeared broken during 4th quarter 2007, and on the contrary, support level dropped!
So are we bearish? hmmm VERY cautious at least, i would say.
Tuesday, January 29, 2008
Market Outlook SPY for Jan 29th '08
Dominant TF: Daily
Swings: UP-DN-DN
Cycles: unreliable (too trendy)
Market Direction: congestion with upper bias in the short term
Position (daily): flat for most, long entry (since last post) in shorter time frames.
Last time, i mentioned that contrarian traders would have been long. The 60mins scenario happened exactly as anticipated. It pays off to be early, it depends however on the investment horizon and the long term outlook is not great.
60mins: bottom has been found... for now
The sudden rate cut, a bit of short-squeeze maybe, managed to calm bears down for now. For the time being, Entropy and MTFS are not indicating much of a direction. SPY could well reach MM pivot level, up to maybe a Fib target. We have the FOMC meeting coming, so it is understandable that visibility or market readability becomes a little more fuzzy.
Daily: no strong recovery just yet
Entropy is slowly picking up, but after a (too) early MTFS lines crossover, it is unlikely any strong recovery can happen in the coming day. Of course, we have no crystal ball and another significant rate cut could certainly change the market dynamics, We'll watch carefully the Fib retracement levels on the way up.
NB: the Swing indicator is now up but is not in stable condition just yet.
Weekly: bottom?
MTFS and Entropy do still point downward, but EntBin is only -1 and MTFS significance level is quite low. No rejoicing however, we have to wait Entropy to bottom out, MTFS to look better and the end of the series of red bars.
Not sure when this will happen, but a recovery is possible (MTFS white line turning up in oversold territory, and Entropy bottoming). Again MTFS lines gradients do not indicate a return to the bull market though.
Saturday, January 26, 2008
Market Snapshot for NDX - Jan 28th 2008
Could i have been more right on Friday... :)
For details: cf RUT posted below
Market Outlook RUT for Jan 28th '08
Dominant TF: Daily declining, Weekly picking up
Swings: DN-DN-DN
Cycles: unreliable (too trendy)
Market Direction: congestion at best, possibly lower still
Position (60mins): flat for most, short otherwise.
I love it when i'm spot like yesterday on NDX... anyway, let's move on to this one. Typical reprieve offered by bears having some indigestion, yet their appetite could well come back soon enough.
60mins: bottom has been found... for now
RUT struggled to retrace up almost to Fib PR1. Entropy is fading and it is now sitting on pivot level. 750 is now the strong MM resistance level with 625 as strong support. RUT may be a little directionless, but the overall down bias should take over soon.
Daily: possible congestion - lower vol.
MTFS has been trying to point for recovery but not too convincing i must say. One wouldn't go long on a down Swing anyway, and even if the fall stopped on MM stall level, there is some potential to test support level if not going lower.
Weekly: bottom?
The week ended on a red bar, bearish looking MTFS and Entropy. What more can i say. If MTFS had shown a green line holding up high while the white line drops sharply, one would have likely had a recovery potential, but this figure is bearish. Having said that, ther may be retracements and a possible congestion in the [625 - 687] trading range.
We now have to wait Entropy to bottom out, MTFS to look better and the end of the series of red bars to anticipate a confirmed bottom.
Friday, January 25, 2008
Market Outlook NDX for Jan 25th '08
Dominant TF: Daily
Swings: UP-DN-DN
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): congestion to low
Position (60mins): flat to long (shorter intraday time frames), selling 2150 call spreads would be a very conservative bet, otherwise 2000 is pretty safe too
We were short last time on NDX (Jan 18th). Target was obviously 1750, but behaviour on support level was not easily predictable. 1750 has been penetrated deep but hasn't broken, making current bounce even stronger.
60mins: check resistance levels
Nice bounce from recent lows, NDX is not out of the woods, but could well reach PR1 (1865) to intermediate MM level (~1880). There is no indication from MTFS or Entropy that it would go much higher right now, but momentum can always pick up as we go along.
Daily: support confirmed but...
Some may say the worst is over, let's just go long. Hmmm, there are trading opportunities at shorter time frames indeed, but on the daily chart, while we certainly have Entropy coming up, MTFS is not showing the best looking line crossover. This is not the easiest scenario, but i would anticipate congestion once the current up move (60mins chart) is over. Bar is still only yellow, and new MM support level is now much lower (cyan dots turned white)
Weekly: definite down bias still
No panic, but 1750 could be tested again, or at least congestion in the lower part of the trading range may happen. One can notice that 2000 never broke as a strong resistance level even if it appeared broken during 4th quarter 2007, and on the contrary, support level dropped!
The current snapshot has been changed to show more MM levels (ugly, but explicit)
Thursday, January 24, 2008
Market Snapshot for NDX - Jan 24th '08
More or less same scenario as for SPY, only slightly more bearish maybe.
NDX always over-reacts (higher volatility).
Market Outlook SPY for Jan 24th '08
Dominant TF: Daily
Swings: UP-DN-DN (from DN-DN-DN)
Cycles: unreliable (too trendy)
Market Direction: congestion at best, possibly lower still
Position: flat for most.
125 seems to hold, and contrarian traders are in already.
60mins: bottom has been found... for now
SPY made a good recovery in the afternoon, and indicators do look much better. Significance level is not too high, so one would have looked at lower time frames for a possible long entry.
What next? Again, some profit taking is possible early in the day (resistance level), even if bears now get slowly exhausted.
Daily: no strong recovery just yet
MTFS is only looking slightly better bow with lines attempting an upturn, yet the early crossover must leave us cautious, and the bar is still red after all. Entropy may be bottoming out (with a EntBin = -4).
Since the rebound happened on Fib target and MM pivot level, moderate optimism is possible.
Weekly: bottom?
MTFS and Entropy do still point downward, but EntBin is only -1 and MTFS significance level is quite low. No rejoicing however, we have to wait Entropy to bottom out, MTFS to look better and the end of the series of red bars.
Wednesday, January 23, 2008
Market Outlook RUT for Jan 23rd '08
Dominant TF: Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: unreliable (too trendy)
Market Direction: congestion at best, possibly lower still
Position: short or flat
The rate cut stopped the fall on MM stall level as mentioned in previous post.
60mins: unconvincing attempt to recover
RUT may have found a good support level at 655, but there is certainly no indication of a strong recovery. RUT may hover around current levels, or try going lower again.
Daily: lower
MTFS is still not looking great. OK, we may have a good looking candle after the rate cut, but probably not good enough... 655 remains the stall level and while the fall may be stopped for a while, 625 remains a possible target.
Weekly: congestion to lower
MTFS and Entropy point downward. The 655 stall level on daily chart is Fib level here, so all the more reason to hold, yet we now at least need to see the MTFS white reverse up in oversold territory to anticipate the end of the current correction. Entropy should also bottom up at the same time.
Monday, January 21, 2008
Market "Correction"
A SPY commented chart has been posted over the weekend on the other ts-trading-technique blog: http://ts-trading-technique.blogspot.com/2008/01/are-we-close-to-bottom-on-spy.html
Now, there is no need to analyze market direction, so let's just try and find where support levels will be found:
SPY: 125 first, but Entropy will be SO STRONG on the down side, and has potential to rapidly draw prices to the next weekly support levels (117, 108). 125 is however QUITE STRONG ALSO, so while it can (and probably will) be penetrated momentarily, one should not panic: it could very well hold for now. Let's update the scenario once the initial shock has been absorbed later today.
RUT: Despite being a broader index, RUT has been hit badly by the current volatility (exposure to rates, credit crunch etc). Now support level is somewhat lower at 625, with a possible (yet unlikely) pause at MM stall level around 655.
NDX: Like other indices, NDX now targets 1750.
Again, we have to first see the reaction on those levels, either a strong reaction to try and short-squeeze the bears, or more likely the 'hangover effect', i.e. the market being a little groggy...
Friday, January 18, 2008
Market Outlook NDX for Jan 18th '08
Dominant TF: Daily
Swings: DN-DN-DN
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): obvious
Position (60mins):
Short: definitely
Flat: wise
Long: short intraday time frames only
We have noticed on Jan 16th that support level turned lower, so a renetry short on the 1st red bar (here 1871 but effectively earlier and higher on lower time frame charts).
60mins: lower
As mentioned in earlier posts, polar bears are having a 2nd Christmas here. It is fairly common to see price acceleration when important levels break. There is no change in dynamics so one can only anticipate a slowdown on current Fib target ~1840 (low time frames), but more likely lower (stall level ~1812).
Daily: lower until pattern completion
MTFS is obviously bearish and nothing seems to be able to stop the fall until the pattern is complete with a line crossover in oversold territory, and with a better looking gradient. It could take a few days... and until then, NDX could well shed a few more points. MM support level is now 1750, with a stall level just above 1800.
Weekly: definite down bias, check Fib and MM levels
We incidently have a support level around 1800 (last lows) coinciding with a possible target on the daily chart.
We can also check Fib retracement levels, with 50% retracement right here (which could be penetrated to 1800 actually), then PR2 (61.8%) at 1750, which is also a possible target.
Until then, no panic... this is just a market correction which we may have forgotten but which happens from time to time.
Thursday, January 17, 2008
Market Outlook SPY for Jan 17th '08
Dominant TF: Daily
Swings: DN-DN-DN
Cycles: unreliable
Market Direction (Daily): check behaviour on support level
Position (60mins):
Short: exited (short re-entry in lower time frames)
Flat: wise
Long: no way!
SPY certainly looks a little bearish, so the million dollar question now is: is the 137.5 level breaking...? Should we look a little lower for support? Has the market over-reacted?
60mins: a bit of fighting on support level
MTFS has shown attempts to take off over the last week, but we know siginificance level is too low (divergence) to follow them. Entropy may have bottomed, and volatility is so high that SPY can penetrate support level without breaking.
Should we be optimistic though...? No. Just follow shorter time frames for a possible entry, otherwise stay on the sideline until bears get tired.
Daily: congestion to down - but no panic: support can hold!
Last commentary a few days ago is still valid, with an additional information now: MTFS crossover is quite bearish.
Support level can hold obviously if bulls are prepared to go for a bit of fighting. Equilibrium may be found around 136. It is not uncommon to see hesitations between near support levels (MM & Fib).
Weekly: congestion to down
Like on the daily chart, take cues from Fib and MM levels. There is support potential even if the mood is certainly moderately bearish (MTFS and Entropy). I insist on "moderately" as a recovery is still possible.
Wednesday, January 16, 2008
Market Outlook RUT for Jan 16th '08
Dominant TF: Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: unreliable (too trendy)
Market Direction: support level in sight
Position:
Short: exited
Flat: wise
Long: follow lower time frames
Bears are having a feast since Christmas, and nobody seems to want to spoil their fun.
I announced an exit short (a little conservative maybe), based on the daily chart as usual.
MM Support level around 688 will be hit.
60mins: congestion to lower until support level is confirmed
No major change. We're still waiting for reaction on support level. We have some indication of an interesting Gartley pattern in lower time frames. We should have an interesting trading day :)
Daily: congestion
Same congestion with a lower bias (688 is now quite close). We have to wait for Entropy to bounce but it is so low (EntBin = -5) that it may happen soon. Despite the volatile environment we're going through, MTFS does not indicate a market fall
Weekly: congestion to down
More worrisome maybe is the increased degradation of the long term environment. The MTFS green line is still relatively high, so no panic just yet, but caution should certainly be exercised. If 688 is broken, check MM and Fib levels for support.
Tuesday, January 15, 2008
Market Snapshot for SPY - Jan 15th 2008
Regrettably, from now on, only one chart will be commented each day on this blog. I shall alternate between SPY, RUT and NDX, and the other 2 snapshots will be posted uncommented. Fortunately, those 3 symbols are fairly correlated.
The forthcoming release of the TS toolset, the few additions still in the pipeline the training and support involved etc etc do not allow me to offer more for free every single day of the week. I certainly enjoy helping traders, but some bombard me with beginners' questions, some rip the toolset apart to only keep the free indicators in it... so i end up looking like a fool...
I shall think of another way of providing this service to those who really appreciate it.
Regards to all, and happy trading...
Market Outlook NDX for Jan 15th '08
Dominant TF: Daily
Swings: UP-DN-DN (from DN-DN-DN)
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): volatile with a down bias
Position (60mins):
Short: would have exited already
Flat: wise
Long: short intraday time frames only
As mentioned over the last few days, NDX found a support on MM stall level (~1904), and is fairly contained in a trading range. Significance level is dropping fast on the 60mins chart, so movements in the trading range must be analysed in lower time frames (15mins chart looks great)
60mins: movement in trading range - upper bias in the short term
the upper bias in MTFS and absence of energy in Entropy do not make this short term recovery convincing at all. Short intraday time frames look a little better, but recovery could very well fade fast.
Daily: congestion to erosion
MTFS is in congestion with lower bias mode, so the pattern must complete in oversold territory now without necessarily going much lower. Entropy is close to a bottom though, and since the Fib pattern seems to have found its target earlier on, one may have a good recovery once negative pressure is fully exhausted. Volatility has always been a wild card with NDX so it may take anything up to a week to materialise.
Weekly: definite down bias, check Fib and MM levels
As mentioned recently, bull mode is over and we are now in correction mode (not bear mode yet though), and one can notice that the Swing indicator has been relatively hesitant at this level. I recommend taking cues from MM and Fib levels at this stage. The Swing indicator is way too steep to be stable (~ 3 times the natural angle of repose), so we know we have to wait for volatility to calm down a bit.
Note: this proprietary Swing algorithm differs from conventional algorithms which always toggle in lower time frames first. We are in this instance probably close to a key level at this time frame.
Monday, January 14, 2008
Market Outlook RUT for Jan 14th '08
Dominant TF: Daily
Swings: DN-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction: recovery needs confirmation
Position:
Short: exited
Flat: wise
Long: follow lower time frames
One can note significance level is declining on the 60mins chart, indicating lower time frames are slowly taking over.
60mins: congestion to lower until support level is confirmed
It seems RUT (like SPY) will remain congested with a lower bias within the [688-719] range, and probably in the lower part of that range. MTFS line gradients and a positive Entropy indicate no substantial fall.
Daily: congestion
As mentioned last time, one must wait for Entropy to bottom and this should happen soon. In the meantime, RUT should remain congested in the high 600s, low 700s. The MTFS white line indicates there should be an attempt to find a support, not necessarily back to 688, but maybe around 704.
Weekly: congestion to down
RUT is definitely losing ground and a stronger base would be needed to reassure investors. Testing 680s or lower is quite possible.
Market Outlook SPY for Jan 14th '08
Dominant TF: Daily
Swings: UP-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction (Daily): probably lower still - support must be tested
Position (60mins):
Short: exited
Flat: wise
Long: no way!
One can take cues from RUT or NDX as patterns are quite similar.
60mins: congestion to lower, testing support level
Significance level is dropping fast at this time frame, so we may want to switch to a lower time frame for a possible entry later on. MTFS is low and pointing down, so SPY will probably test lows again. Entropy does not indicate a down pressure though.
Daily: congestion to down
SPY remains a little bearish, but the early MTFS crossover can indicate congestion at this low level. Entropy has not bottomed yet, but we can anticipate the fall to stop near support level (at least in the short term...)
One should in any case wait first for MTFS to show a clearer pattern with crossover (preferably in oversold territory) and Entropy to bottom out for a clearer picture. As a reminder: Markets are discrete, event-driven, and reaction around support level will probably constitute the next event to come.
Weekly: congestion to down
SPY will now be looking for direction now that lows have been tested again. The bias however remains very much down, at least until Entropy eventually picks up again.
Saturday, January 12, 2008
Market Outlook NDX for Jan 14th '08
Dominant TF: Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): somewhat unreliable in this market
Market Direction (Daily): volatile with a down bias
Position (60mins):
Short: nothing wrong with taking profits
Flat: wise
Long: betting on a recovery is very risky
Since i closed my short position (too) early), i leave the position indication for those who haven't. I bet on a bottom coming soon, but admittedly this is not in the chart yet.
60mins: continuation of price erosion
It is not possible to say at this stage whether NDX will remain in a trading range or try and test support level. The fall stopped on Jan 9 on MM stall level which has been tested again.
We can also notice that significance level is also declining.
Daily: congestion to erosion
Unsurprisingly NDX resumed south as MTFS and Entropy do still point down. One shall notice that the MTFS white line is tempting an upturn. We should however not expect any significant recovery to expect here. On the contrary, unless volatility brings new surprises, NDX should remain in current trading range [high 1800s - low 1900s] until the negative pressure is exhausted. We shall look closely at MTFS lines joining and Entropy bottoming out over the next few days.
Weekly: definite down bias, check Fib and MM levels
As mentioned recently, bull mode is over and we are now in correction mode (not bear mode yet though), and one can notice that the Swing indicator has been relatively hesitant at this level. I recommend taking cues from MM and Fib levels at this stage. The Swing indicator is way too steep to be stable (~ 3 times the natural angle of repose), so we know we have to wait for volatility to calm down a bit.
Note: this proprietary Swing algorithm differs from conventional algorithms which always toggle in lower time frames first. We are in this instance probably close to a key level at this time frame.
Friday, January 11, 2008
Market Outlook RUT for Jan 11th '08
Dominant TF: 60mins & Daily
Swings: UP-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction: recovery needs confirmation
Position:
Short: exited
Long: shorter time frames only
One can note significance level is declining a bit, indicating lower time frames are slowly taking over.
60mins: fall may be over, but no strong recovery just yet
RUT is crawling back to Fib PR1, and we should wait to see what will be coming next. There is some recovery potential, yet one should be cautious and analyse dynamics in shorter time frames.
Daily: congestion
The falls may be over, but one should wait at least for Entropy to find a bottom. At -5, EntBin is very low so this may happen soon. The MTFS shows a 'broken fall' pattern, which is a transition mode only. One can therefore anticipate a trading range in the low to mid 700s.
Weekly: congestion to down
RUT is definitely losing ground and a stronger base would be needed to reassure investors. Testing 680s or lower is quite possible.
Market Outlook SPY for Jan 11th '08
Dominant TF: Daily & 60 mins
Swings: UP-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction (Daily): probably lower still
Position (60mins):
Short: exited
Flat: wise
Long: lower time frames only
One can take cues from RUT or NDX as patterns are quite similar.
60mins: recovery attempt - check resistance levels
MTFS is looking a little better now. SPY retraced up to Fib PR1 (38.2%) and could evel reach the 50% level right on MM pivot level. At the same time, there is little energy left.
Daily: congestion to down
Like with NDX and RUT, SPY had to hit its target, and remains a little bearish. Negative pressure is fading faster than anticipated so a trading range around current levels is quite possible.
One should in any case wait first for MTFS to show a clearer pattern with crossover (preferably in oversold territory) and Entropy to bottom out to consider the fall to be finally over.
Weekly: congestion to down
SPY will now be looking for direction now that lows have been tested again. The bias however remains down, at least until Entropy picks up again.
Market Outlook NDX for Jan 11th '08
Dominant TF: 60mins & Daily
Swings: UP-DN-DN (from DN-DN-UP)
Cycles (DomTF): have been turned off as too unreliable in this market
Market Direction (Daily): volatile with a down bias
Position (60mins):
Short: exited
Flat: wise
Long: risky
60mins: congestion to very moderately up
NDX is crawling up, but is not showing much energy to go significantly higher. MTFS shows a slight up bias, so NDX may reach PR1 just above 1980 though.
Daily: congestion to erosion
NDX took a bit of a breather yesterday, but MTFS and Entropy do still point down. One shall notice that the MTFS white line is tempting an upturn. We should not expect any significant recovery to expect here, NDX should even carry on losing ground. However, the Fib pattern is completed, so we are now waiting for the next event, either test 2000 or or lows again. In such volatile environment both events may occur, yet the down bias should prevail in the end.
Weekly: definite down bias, check Fib and MM levels
It seems the bull run is now over so we may need to enter a correction mode (not bear mode yet though). One can notice that the Swing indicator is hesitant at this level.
Note: this proprietary Swing algorithm differs from conventional algorithms which always toggle in lower time frames first. We are in this instance probably close to a key level at this time frame.
Thursday, January 10, 2008
Market Outlook RUT for Jan 10th '08
Dominant TF: 60mins & Daily
Swings: UP-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: recovery needs confirmation
Position:
Short: would have taken profit, but exit point around 700 is still possible
Long: way too early
60mins: fall may be over, but no strong recovery just yet
RUT about hit its target on MM level and recovered a bit. EntBin is very low, which certainly indicates a possible bounce, so reaching 732 again cannot be discarded. MTFS is not quite the best looking pattern for recovery though, so no real recovery in the short term.
NB: the Swing indicator is a very early indicator, but ALWAYS needs confirmation. It may turn back down, hence indicate more an end to the current fall than a real recovery.
Daily: congestion to down
The Fib target (~688) has been hit quicker than i thought. Entropy indicates a possible bounce, but like for the equally significant 60mins chart, MTFS lines are too steep to indicate a strong recovery. Bears may want to try and test lows again, or at least the low 700s.
Weekly: congestion to down
RUT has always bounced on PR2 (61.8% Fib retracement) but this time didn't. This confirms RUT is definitely in correction mode at least to previous lows around 670 - 680. We may also find guidance on Fib levels from 2005 or before.
Market Outlook SPY for Jan 10th '08
Dominant TF: Daily & 60 mins
Swings: UP-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: probably lower still
Position:
Short: would have exited conservatively, but a good exit point around 138 is still possible
Long: too early...
60mins: fall may be over, but no strong recovery just yet
Exact same configuration as for RUT today
Daily: congestion to down
Like with NDX and RUT, SPY had to hit its target, and remains a little bearish. Negative pressure will take some time to exhaust, so MM support or the Fib target should be tested again.
One should wait for MTFS to show a clearer pattern with crossover and Entropy to bottom out first to consider the fall to be finally over.
Weekly: congestion to down
MTFS is a bit out of sync, but we can obviously notice lows being tested. SPY could remain in the low 140s for a short while.
Market Outlook NDX for Jan 10th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-UP (from DN-DN-DN)
Cycles (DomTF): have been turned off as too unreliable in this market
Market Direction (Daily): congestion
Position (60mins):
Short: would be looking for an exit point in the low 1900s
Long: not quite yet
NDX is now looking for support.
60mins: possible congestion
Is the fall over? Well, one must always take MM stall levels seriously (half way between MM white dots and strong MM support at 1875). That level is around 1906.
MTFS is not indicating a real recovery at this stage, but the fall may be over. In such circumstances, NDX could retrace up to PR1 (~1989) but this is unlikely. Bears won't give up without a good fight, so NDX should be contained within a trading range around the low to mid 1900s
Daily: support level must be tested
NDX hit its Fib target, then recovered a bit, yet MTFS and Entropy still point downward. If 1886 proved to be a support level it will have to be tested again. Bears may go softer now though.
Weekly: definite down bias, check Fib and MM levels
It seems the bull run is now over so we may need to enter a correction mode (not bear mode yet though). One can notice that the Swing indicator is hesitant at this level (down yesterday, up today).
Note: this proprietary Swing algorithm differs from conventional algorithms which always toggle in lower time frames first. We are in this instance probably close to a key level at this time frame.
Wednesday, January 09, 2008
Market Outlook RUT for Jan 9th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: probably lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad
60mins: likely congestion or slightly down.
Similar as yesterday and similar to SPY: RUT could hold around MM stall level at 704 or drift to 688.
Daily: congestion to down
While not overly bearish, the current situation with Entropy picking up momentum and steep MTFS lines indicates RUT going lower. It seems that 688 will be hit at some point.
Weekly: congestion to down
RUT has always bounced on PR2 (61.8% Fib retracement) but this time didn't. This confirms RUT is definitely in correction mode at least to previous lows around 670 - 680. We may also find guidance on Fib levels from 2005 or before.
Market Outlook SPY for Jan 9th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: probably lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad
60mins: likely congestion on stall level or slightly down to support level.
Similar as yesterday: SPY fall stopped on MM stall level around 139. The overall environment remains fairly bearish but Entropy is not so strong anymore. The strong MM level remains 137.50.
Daily: congestion to down
Similar to yesterday:
Like with NDX, we are surprisingly not in a very bearish environment just yet. SPY should drift further down to 137.5. There is no clear indication of a bottom in the near term. The 139 stall level shouldn't hold, so we'll have to watch for 137.5 or possibly the 136 Fib target.
SPY has the potential to go lower, but negative pressure could exhaust within a week or so.
Weekly: congestion to down
This time frame has been out of sync for a while, but we shall notice the previous lows, which bears should try and test.
Market Outlook NDX for Jan 9th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): have been turned off as too unreliable in this market
Market Direction (Daily): drifting down
Position (60mins):
Short: nothing wrong with taking profits, but maybe more to come
Flat: be patient
Long: you must be mad!
NDX is now looking for support.
60mins: possible congestion or slower price erosion.
As mentioned yesterday, support held for a while, then bears decided to have a go at it again.
Pattern-wise, MTFS needs better foundation to find support (crossover with a decent gradient in oversold territory), but Entropy is calming down a bit. MM support level is 1875, and we have a Fib pattern on the daily chart (equally significant at 0.88)
Daily: down looking for support.
Same as yesterday: MTFS is driven by its lines gradient right now. Amazingly, MTFS line levels are not quite indicative of a market fall just yet even if it is becoming a little alarming for some.
Again, the overall MTFS pattern is definitily not a conventional one (or close to a 'failed recovery' pattern), so we'll probably stay in a broader trading range until lines finally converge in oversold territory.
Volatility has however already pushed levels pretty wide apart so the next
support level may well be 1886 (Fib target) or around 1875 (MM support level on 60mins chart). MM Stall level is 1904.
Weekly: Channel broke out... what next???
It seems the bull run is now over so we may need to enter a correction mode (check FIb + MM levels)
We should however only note the clear down bias for now, and focus on shorter time frames. Please also note that Swing is still hesitant at this level and could therefore turn up again. In other words, correction mode is not bear mode just yet at this time frame.
Tuesday, January 08, 2008
Market Outlook RUT for Jan 8th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: possible upturn, but very low significance level...
Market Direction: down, but possible support level at 719
Position (60mins):
Short: some may want to hang on, but nothing wrong with taking profits.
Flat: it would be cautious to stay a little longer on the sideline
Long: are we looking at the same chart !!!?!?
Note: this chart reads like SPY
60mins: congestion or down drift
The MTFS crossover does not indicate any recovery potential, and while Entropy seems to have bottomed it remains very low. EntBin is quite low at -4 though, but it has been low for a few days. In such situation a congestion at this low level is possible, but this support level is not very strong, so RUT could drift more altough there is no clear Fib level to aim to. The next strong MM support level is 688, which surprisingly is lower than on the daily chart.
Daily: down but 719 may hold for now.
The down drift may continue until lines eventually bounce in oversold territory. The previous recovery pattern (started end Nov) failed, so we have to wait for the next one... or adjust to a new bear trend.
For the time being, Entropy indicates little energy either way, so RUT may stay congested (with a lower bias) for a while.
Weekly: lower bias
MTFS is not looking too good, while its significance level is picking up. A support must be found soon otherwise RUT will definitely turn to correction mode down to 680.
Market Outlook SPY for Jan 8th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: indicates a possible upturn but totally unreliable significance level
Market Direction: probably lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad
60mins: likely congestion or down drift.
The MTFS crossover came too early to indicate a recovery and Entropy hasn't bottomed yet, so we may have a congestion at best, otherwise SPY could well also drift to the stall level around 139, just above the strong support level at 137.50.
NB: EntBin is very low at -4 (Min is -5) though so a bottom may occur soon.
Daily: congestion to down
Similar to yesterday:
Like with NDX, we are surprisingly not in a very bearish environment just yet. SPY could drift further (137.75?) or just remain congested at this low level for a while (~140.60).
Weekly: congestion to down
Again, this time frame has difficulty adapting to the current market moves at the moment.
We would like to see Entropy stabilising for a possible recovery. We have to watch current levels or possibly 137.75 for a stronger support level now.
Market Outlook NDX for Jan 8th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): possible upturn but unreliable significance level
Market Direction (Daily): drifting down
Position (60mins):
Short: nothing wrong with taking profits, but maybe more to come
Flat: be patient
Long: you must be mad!
NDX could pause at this level, or even hold the position until negative pressure is exhausted. We are however more likely to see NDX coming down still. The market is not the easiest to read on account of various expectations on forthcoming rate cuts.
60mins: possible congestion or slower price erosion.
As mentioned yesterday, NDX found support on 1938 and even picked up a bit on the last hour of trading to close at stall level above 1950. NDX may hold at this level but this is unlikely to last long.
We know that such MTFS line crossover pattern is not conducive to recovery and Entropy has not bottomwed yet.
Daily: drifting down looking for support.
MTFS is driven by its lines gradient right now. Amazingly, MTFS line levels are not indicative of a market fall (Entropy either actually), so the 1938 support level may hold.
The overall MFS pattern is not a conventional one (or close to a 'failed recovery' pattern), so we'll probably stay in a broader trading range until lines finally converge in oversold territory.
Volatility has however already pushed levels pretty wide apart so the next support level may well be below 1900 at around 1875.
Weekly: Check channel's lower boundary
We should only note the clear down bias for now, and focus on shorter time frames. Please also note that Swing is still hesitant at this level and could therefore turn up again.
Monday, January 07, 2008
Market Outlook RUT for Jan 7th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: possible upturn, but fairly low significance level...
Market Direction: down, but possible support level at 719
Position (60mins):
Short: some may want to hang on, but nothing wrong with taking profits.
Flat: it would be cautious to stay a little longer on the sideline
Long: are we looking at the same chart !!!?!?
60mins: the fall may at last find some support
734 did not hold in such a bearish environment. Next support level is 719, almost hit Friday afternoon. The MTFS white line is stabilising indicating the fall may be soon over, but the other lines still look quite bearish. 719 looks like it could hold though.
Daily: down but 719 may hold.
MTFS lines have a negative gradient that is too steep for RUT to recover right now. The pattern we saw since lines crossed over has failed and now needs a new start. Entropy is low, so the 719 level could hold but one should remain cautious as it also go lower.
Upturn in current cycle is unlikely right now (significance level way too low).
Weekly: lower bias
MTFS is not looking too good, while its significance level is picking up. A support must be found soon otherwise RUT will definitely turn to correction mode down to 680.
Sunday, January 06, 2008
Market Outlook SPY for Jan 7th '08
Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: possible upturn but unreliable significance level
Market Direction: probably lower lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad
We admittedly did not fully anticipate the market to fall so quickly. We thought the 143.75 level would be at least somewhat defended.
60mins: down still
The pattern is not quite complete yet, although the MTFS white line may imply some cooling down. The sentiment is still quite negative though.
Daily: congestion to down
I warned to be careful about the triangle breakout... could not be more right, could i ...? Surprisingly, MTFS and Entropy are not overly bearish yet, so we can see it either as room to fall further (137.75?) or maybe a sign it will be soon over (140.6?).
Weekly: congestion to down
Quite a volatile environment... This time frame has difficulty adapting to the current market moves at the moment.
We would like to see Entropy stabilising for a possible recovery. We have to watch current levels or possibly 137.75 for support now.
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