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.