cf. NDX post below for guidance
Saturday, March 29, 2008
Market Outlook NDX for Mar 31st '08
Dominant TF: 60mins then Daily. Weekly chart coming back too.
Swings: DN-UP-DN
Market Direction (Daily): none
Cycles: good fit, but high noise level, so unreliable
Position (60mins): short
Continuation of "price erosion" was the correct qualitative yesterday, and may apply again on Monday.
We shall also watch EURUSD for a possible change in dynamics.
60mins: price erosion, looking for support.
After the recent Fed measures, markets have been lifted, and should stay above 1750 in the foreseeable future.
If we look at possible support levels, 1750 is indeed a strong MMM and moderate Fib support levels. Should there be a volatility spike, NDX could even test Fib PR2 (61.8%). MTFS and Entropy indeed show a steady decline, so we'll keep an eye on those levels, as well as on same levels for our other symbols.
Daily: hesitation for now
On last NDX post, I said that "NDX will probably have to consolidate a stronger base to go higher later on". MTFS indeed gave us the right clue with the classic "failed recovery" pattern. Entropy has now turned positive without being really convincing, so NDX will most likely try and find a firmer support level and in the meantime will remain in the same trading range. Swing should stay UP.
Weekly: caution...
The well anticipated bounce was way too fast to justify Swing turning UP, but we may finally see the MTFS pattern slowly completing over the next few weeks. We will therefore watch for the next support level, probably 1750 again, and be patient until Swing turns UP. Patterns will be clearer on shorter time frames in the meantime.
We will however remain cautious: we are looking for a likely support, and until then we remain bearish overall.
For options traders, April puts placed below this year's lows (1625) will hold, so conservative April condors should still do OK in this market.
Friday, March 28, 2008
Market Snapshot for RUT - Mar 28th 2008
cf. SPY post below for guidance. RUT, SPY and NDX are highly correlated, so the above snapshot is given to adapt Fib and MM levels to this particular symbol.
Market Snapshot for NDX - Mar 28th 2008
cf. SPY post below for guidance. SPY, NDX and RUT are highly correlated, so the above snapshot is given to adapt Fib and MM levels to this particular symbol.
Market Outlook SPY for Mar 28th '08
Dominant TF: Weekly followed by 60mins.
Swings: DN-DN-DN
Cycles: peak indeed and slightly better signal to noise ratio
Market Direction: price erosion
Position: Bears would be flat or short, bulls would be flat, and all others would have a iron condor in place (adjusted for a slightly negative delta though).
My apologies again for yesterday's mishap...
Last post was again correct (see 60mins), and again no recovery in sight...
60mins: price erosion
SPY almost hit the 1st Fib target around current highs, but showed no energy to go higher. We're still in a bearish environment (Swings:DN-DN-DN) so we'll need a good looking MTFS pattern to have a convincing recovery.
We shall now look for support on Fib and MM levels. MTFS lines all show some negative gradient, so SPY could pull back to the MM pivot level or lower. It could however go higher later on.
Daily: no recovery potential just yet
MTFS shows a 2nd attempt of a recovery after lines crossed over. The 1st failed, and this 2nd should too, although higher lows indicate congestion rather than a further fall. SPY may even manage to creep up again later on (recoveries often take 2 or 3 attempts).
For the time being, same trading range in sight, with a likely support around 131.
Weekly: no change
The bounce we saw will probably not materialise into a significant recovery just yet. MTFS is still bearish, and again only Entropy may indicate the fall could be over. We again need some patience to see negative pressure dissipating over time.
Thursday, March 27, 2008
Market Snapshot for EURUSD - Mar 27th 2008
Snapshot of EURUSD to monitor possible change in behaviour in the coming days and weeks.
Market Outlook RUT for Mar 27th '08
Sorry... some strange publishing error crept up, and an older post was copied over the one I updated this morning.
Market has opened now, so no point publishing a market outlook for the day now.
Will make sure the post is correct tomorrow.
Apologies.
Wednesday, March 26, 2008
Market Outlook NDX for Mar 26th '08
Dominant TF: 60mins then Daily. Weekly chart coming back too.
Swings: UP-UP-DN
Market Direction (Daily): moderately up
Cycles: high noise level, so unreliable
Position (60mins): long but maybe looking at taking profits soon.
Even if the scenario depicted three trading days ago was correct for that day, the recovery that came later on was not properly anticipated. Partly my mistake but this is also due to the snapshot frequency. Users of the technique will have watched the patterns develop daily if not hourly.
There is still a chance of seeing a change in dynamics in the EURUSD shortly.
60mins: looking for a target
After taking some profit the day after the rate cut, it seems the market chose to aim higher, and we've seen a classic Fib pattern developing. We have a target close to current levels, and a Fib XOP target around 1881, very close to the MM resistance level of 1875.
MTFS is quite bullish on this time frame, with only the white line doing an early crossover, here indicating the hesitation between the two target levels. This is a common situation, but in this case, the most likely scenario is aiming at the high target, or at least at stall level, half-way so around 1844.
Entropy is losing steam so we shall only be moderately bullish at this stage.
Daily: hesitation for now
Swing is UP now, and we had not seen that for a while.
I had placed a trendline to check out for a breakout situation which indeed happened Monday morning.
Entropy is now also looking a little better, yet MTFS is not giving us a recovery pattern, so NDX will probably have to consolidate a stronger base to go higher later on.
This may sound too conservative for some, but while the worst is maybe over, we're not back to bullish mode quite yet.
Weekly: caution...
Three trading days ago, i warned that the trend is still down, however clearly stated a bounce was about to come (EntBin = -5). Volatility nowadays should not surprise us, yet the bounce was pretty strong indeed.
Now the scenario hasn't changed much despite bears taking profits or being short-squeezed. We do notice that a Fib retracement level around 1886 corroborates a possible target on the 60mins chart, so we'll give recovery a chance even if there is still quite some negative pressure in the market.
It should take quite a while to return to a bull trend though.
Tuesday, March 25, 2008
Market Outlook SPY for Mar 25th '08
Dominant TF: Weekly followed by 60mins.
Swings: UP-UP-DN
Cycles: upturn indeed but very low signal to noise ratio
Market Direction: Upper bias, and more indication that fall may be over, but no substantial recovery in sight just yet.
Position: Contrarians and aggressive traders would be long, bears would be flat, and all others would have a iron condor in place.
Last post on SPY on Mar 19th was correct. We've indeed seen SPY now hovering in the upper half of the same trading range since mid January. What can we read now?
60mins: upper bias until resistance level
The 'wavy' MTFS is representative of the current volatility and hesitation, so now that the upper bias is there, we shall reach the MM resistance level at 137.50. We have a Fib target around current levels and a little higher, so difficult to say whether SPY will pull back a little before getting there.
Daily: no recovery potential just yet
MTFS is not showing enough strength to go higher than current range highs, so we'll have to look at SPY behaviour around those highs. As said on last post, and confirming the 60mins scenario, SPY should remain within the higher part of the same range since January, i.e. more or less within the [132-138] range.
Weekly: are we out of the woods?
No major change since last post, except that the anticipated bounce occured.
MTFS is still quite bearish, so is Entropy. Obviously, with EntBin at -4 (min is -5) a bounce was in the cards, taking SPY a little higher and thus alleviating pressure on MTFS. All in all, we would then see completion of the MTFS pattern within 4 to 6 weeks, and be in a better position to go higher then.
Level-wise, it is quite clear that the test level will be 137.50 support last year, then resistance earlier this year. It would be good to see it passed then tested as support again. It could however take a while.
Again and again, for the time being, patience and caution must be both exercised.
Friday, March 21, 2008
Market Snapshot for EURUSD - Mar 24th 2008
A EURUSD chart is now posted once or twice a week first to observe that the same TS environment can also be applied to forex, but also to see possible change in dynamics in quasi realtime for this forex pair.
Market Outlook RUT for Mar 24th '08
Dominant TF: weekly and 60mins charts
Swings: UP-DN-DN
Cycles: looks good but still unreliable (low signal/noise ratio)
Market Direction: same trading range. 688 is key level.
Position (60mins): long but target in sight, congestion otherwise.
Options:
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts
The outlook given 3 trading days ago was correct. Support was indeed found near range lows. The Fed cut then pushed RUT higher but only back to range highs. What can we now expect?
60mins: upper bias
RUT is trying to engage in higher gear now but doesn't show much energy just yet. MTFS and Entropy are pointing slightly higher but it will take more to pass the 688 resistance level, either exogenous (economic news) or endogenous (breakout).
Daily: bounce on MM stall level
The MM stall level is indeed half-way between the white dots and the strong MM support level (cyan dots), and seems to have halted the fall. The MTFS white line divergence and Entropy bottoming out a couple of days ago confirm the situation. However, the other 2 MTFS lines are still very low indicating a possible bell shape pattern going forward, i.e. a failed recovery pattern again. Swing is also down still, so going long is reserved to lower time frames.
Weekly: congestion to down bias
A bounce around 655 was very much in the cards, yet there is still no change in underlying dynamics. We obviously have a white line above the brown line and a very Entropy (EntBin = -4) to mitigate a bearish scenario, so a bounce is quite possible if not likely, indicating that the completion of the MTFS pattern may happen through time rather than with a further fall. Again as a reminder, negative pressure can dissipate slowly through the passage of time particularly on strong support levels, here Fib + MM stall level. We just have to be patient, and if bears come back to the charge, be prepared to see 625 being tested.
Thursday, March 20, 2008
Market Outlook NDX for Mar 20th '08
Dominant TF: 60mins then Daily. Weekly chart coming back too.
Swings: DN-DN-DN
Market Direction (Daily): congestion to down
Cycles: high noise level
Position (60mins): neutral to negative delta. short.
Three trading days agao, i said: "The trend is still down, and technically the incapacity to pass 1750 does not bode well for the next few days and weeks". It seems to apply again today, yet we'll give a chance to recent measures like the Fed cut to sieve through the economy and markets.
We'll keep a look at other correlated market as well as EURUSD. The € is at last showing signs of abating a bit.
60mins: trading range for now
The Entropy gave us a good indication again, along with the reversal of MTFS. NDX indeed did find have momentum to break the strong MM level (1750) and the first Fib target (1755). NDX could find support at the bottom of the range, although most probably higher.
We notice Swing legs being quite steep, so those interested in swing trading should move to a lower time frame, always keeping in mind the context provided by higher time frames, i.e. dominant down trend.
Daily: down, but looking for support
It is always risky to read too much into charts, but MTFS is trying to point upward and Entropy is showing less negative pressure. It may not be enough to build a support level just yet though.
I would suggest taking cues from other time frames for the time being, keeping in mind the bias is still down.
Weekly: again and again, it is bearish...
It is almost a pity this is not the dominant time frame, as this is certainly the easiest to read: trend is down.
To mitigate this scenario though, one can see that Entropy is extremely low (EntBin = -5) so a bounce is quite possible in the near future. We may have to wait for ENtropy to finally bottom out and then for the completion of the MTFS pattern. Until then, the bias is certainly down.
Wednesday, March 19, 2008
Market Outlook SPY for Mar 19th '08
Dominant TF: Weekly followed by 60mins.
Swings: UP-UP-DN
Cycles: upturn indeed but doubtful reliability
Market Direction: Upper bias, and more indication that fall may be over, but no substantial recovery in sight just yet.
The Fed's massive rate cut certainly had an immediate effect but cautious optimism must still be exercised among bulls and contrarians. At the same time, bears may want to tally their profits and take it a little easier now. Being greedy could eventually prove costly.
60mins: nice bounce indeed
We do notice that the turnaround happened on Fib target as wll as MM stall level... The Fed cut, or any positive news certainly has a stronger impact when the conditions are right like on Monday afternoon.
MTFS and Entropy certainly are looking good, but SPY is only at range high and EntBin already culminates at 5, so profit taking is quite likely. In such case, we would have a range shift, i.e. SPY tesing pivot level to try and stay in the higher part of the MM range now (i.e. pivot to strong reistance further up).
Daily: no recovery but watch out
Reaction to the Fed cut induced a MTFS divergence. Entropy also bottomed on Monday already. The recovery is however not comfirmed yet, and as on the 60mins chart, SPY may just jump to the higher part of the sam erange since January, i.e. more or less within the [132-138] range.
Weekly: are we out of the woods?
Any move away from the nerve-wrecking 125-127 test levels is good, but too early to say that the worst is behind us. So, no rejoicing just yet. MTFS is still quite bearish, so is Entropy. Obviously, with EntBin at -4 (min is -5) one tends to think a bounce is in the cards, so SPY could go higher and alleviate pressure on MTFS. All in all, we would then see completion of the MTFS pattern within 4 to 6 weeks, and be in a better position to go higher then.
Level-wise, it is quite clear that the test level will be 137.50 support last year, then resistance earlier this year. It would be good to see it passed then tested as support again. It could however take a while.
Again and again, for the time being, patience and caution must be both exercised.
Tuesday, March 18, 2008
Market Snapshot for EURUSD - Mar 18th 2008
EURUSD snapshot. This pair could show interesting patterns over the next few days and weeks. (cf. previous posts and 'twin' blog for interpretation)
Market Outlook RUT for Mar 18th '08
Dominant TF: weekly chart, then daily and 60mins
Swings: DN-DN-DN
Cycles: unreliable (low signal/noise ratio)
Market Direction: same trading range
Position (60mins): short but target in sight.
Options:
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts
I warned on last post (Mar13th) that there was no recovery potential. We indeed went back to support level as anticipated. What next?
60mins: aiming at lows again but some relief could be coming
RUT went back down to the MM support level, and even penetrated deep enough to almost test previous lows. Furthermore, it is possible that the last 2 bars testing 656 as a resistance level now is paving the way to go lower. Previous lows are in the low 640s, then there 632 is a Fib target. MTFS looks bearish, but a support could be found at current levels or a little lower (white line diverging) and Entropy is now picking up a bit.
Daily: same as on the 60mins chart, i.e. more price erosion but a support could be found soon (625?).
The trend is undoubtedly down, but we have Entropy bottoming out and maybe a little bit of a divergence on the MTFS white line. The momentum should however take RUT a little lower, and even possibly hit 625 at some point.
Weekly: nothing new, i.e. congestion to down
We're now back to the previous lows, i.e. a level we had clearly anticipated. We're on Fibonacci PR1 as well as MM stall level, which may cushion or even stop the fall also confirming levels seen on lower time frames. MTFS however still looks very bearish here, but as mentioned over and over on this blog, this negative pressure can sometimes also dissipate slowly through the passage of time. For the time being, we have NO sign of recovery, and should the current level fail to resist this on-going down pressure, 625 seems a reasonable target for now... Only the completion of the MTFS pattern will tell us when the fall is finally over.
Monday, March 17, 2008
Market Outlook NDX for Mar 17th '08
Dominant TF: Daily, then 60mins
Swings: DN-DN-DN
Market Direction (Daily): congestion to down
Cycles: high noise level
Position (60mins): neutral to negative delta. short.
The trend is still down, and technically the incapacity to pass 1750 does not bode well for the next few days and weeks.
60mins: down but...
The MTFS pattern points down, so does Entropy. However, a support should be found within a few bars. NDX should stay in the lower part of the [1688-1750] range. The fact that 1750 has turned to strong resistance indicates a difficulty going higher anyway. We'll watch the Entropy bottoming out for a possible sign of a support, probably close to the bottom of the current range.
Daily:
Last time, i warned against getting carried away by the strong up day we had. We indeed saw no follow-through and we are still in a 'price erosion' mode.
Failing to pass 1750 would certainly point to a lower support, possibly around 1625 (125 point interval between salient MM levels).
Weekly: again and again, it is bearish...
But Entropy is so low (EntBin = -5) that a bounce must occur sometime soon. Difficult to know exactly when though. The 1750 support level looks like history, but there is a minute chance it can still hold if the forthcoming bounce is strong enough to stop the fall.
Friday, March 14, 2008
Market Snapshot for EURUSD - Mar 14th 2008
Here is the EURUSD forex pair.
The technique being universal, i thought it would be interesting for some to have a look at a forex pair. This chart won't be commented on this blog though. I might also change pair from time to time i.e. no intention to provide forex trading advice for free.
There is indeed currently a LOT of interest on the toolset and trading technique for forex trading. For the time being, there is only one type of license for any TradeStation symbol, but this may change in the future.
Market Outlook SPY for Mar 14th '08
Dominant TF: 60mins, but weekly chart picking up fast.
Swings: UP-DN-DN
Market Direction: same indecision, so too early to say we're out of the woods...
Looking back at yesterday's post on RUT, I hope you will take note of the MTFS pattern on the 60mins chart. It is a classic one, hence my assertion RUT would come and hit support level again. The later recovery was stronger than i thought, but it was an excellent day for a successful short then a long entry.
Now what do we see today?
60mins: again, not much steam
SPY is highly correlated to the other 2 symbols on this blog, but we'll try now and then to check whether levels are clearer on one or the other. This time again, we're back in a trading range looking for direction. There is some momemtum left, yet sellers are far from being exhausted and pushed out of the market, so we'll have to accept some ambiguity direction-wise, or move to lower time frames. On this market triptych, the weekly chart gives overall context, and one could move to a lower time frame 15 or 30 mins for direction.
One shall remain very cautious with long entries.
Daily: bearish
On the last SPY post, I wrote of a "failed recovery" pattern. MTFS and Entropy at this time frame are still quite bearish, hence still indication of a strong rebound despite what we've seen earlier this week. Caution MUST be exercised. The outlook remains the same, i.e. a trading range [125:140], which can be traded with condors. Delta should remain negative or neutral.
Weekly: bottom?
Copy/Paste the last post, i.e. no significant change:
For the last few weeks, SPY has been hovering around the low to mid 130s, but we could clearly see that it had no energy to pass the first significant Fib level on the up side and both MTFS and Entropy have always remained quite bearish.
As we have said for RUT and NDX, the patterns must now complete and only a drop or a congestion at these low levels can bring MTFS to oversold levels to see a new pattern then emerging. The key words for the time being are therefore a lot of patience and again and again some caution.
Correction:
Got my calendar wrong on options expiration the other day. It is obviously next week.
Thursday, March 13, 2008
Market Outlook RUT for Mar 13th '08
Dominant TF: weekly chart. 60mins dropping
Swings: UP-DN-DN
Cycles: possible upturn, but caution is to be exercised
Market Direction: same trading range
Position (60mins): wouldn't go short.
Options: March iron condor to close with a profit. April in place:
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts
Support was found as mentioned on last post. I even hinted it may be a good time to exit short. Now what next? Not much probably... In French, we say "une hirondelle ne fait pas la printemps" i.e. seeing the first swallow doesn't quite mean that winter is over.
NB: to add to this period of high volatility, we also have triple witching coming. The end of the week could be stormy...
60mins: a secound round on 656?
RUT could well test the support level again, but the good thing is it will almost certainly hold. RUT however needs more energy to go higher, so there is a need for new buyers to come to the party now. MTFS is only expressing normal profit taking but Entropy is holding for the time being. In other words, we could have a down day, but no panic this time.
Daily: nice bounce on range lows, but no real recovery right now.
Yet, there is still no sign of a recovery. We indeed need a clearer MTFS pattern. We'll also watch for a possible Entropy bottom in the next few days (EntBin = -4).
Weekly: nothing new, i.e. congestion to down
We're now back to the previous lows, i.e. a level we had clearly anticipated. It is Fibonacci PR1 which may act as a support level here confirming the 60mins MM level. MTFS still looks bearish here, but as mentioned over and over on this blog, the negative pressure can also dissipate through the passage of time.
Here again, we have NO sign of recovery, but the conditions could emerge if 656 holds. We just have to be patient.
Wednesday, March 12, 2008
Market Outlook NDX for Mar 12th '08
Dominant TF: 60mins, then Daily
Swings: UP-DN-DN
Market Direction (Daily): no frantic buy just yet
Cycles: high noise level
Position (60mins): same March condor until expiration.
Remember yesterday: I said not to give in to much gloom and doom aand watch levels carefully. However, such turnaround is always amazing. It seems market nowadays have a volatility potential never seen before.
What lesson can we draw from yesterday? Well, first a nice 4% up move comes in the top 3% of daily log returns in the last 15 years. We have the odd occurrence now and then, however not a rare event. For instance, we've had a similar move on Nov 13th last year (yes, it was also a tuesday, but i'll let the esoteric stuff to other web sites...). That up day halted the fall until early Jan, so we may again have a reprieve if not a recovery now, i.e. we should have a change in market dynamics, so let's analyse carefully what kind of pattern will now emerge going forward.
60mins: wait and see...
3 trading days ago, i was saying: "(let's) if/how buyers react on and close to the strong support level". Now we know... Having said that, it is only if 1750 is passed again that we may have a recovery. 1750 is a far more important test level.
MTFS is certainly looking better, but it also does not show a clear recovery pattern just yet.
Daily: so what...
A great day yesterday and what change does it provide to the chart? Actually very little: the only difference is the bar turning yellow. It shows that we need to see further price stabilisation to turn bullish again. However, as mentioned above, the fall may actually be over (at least for now), so while a number of traders will jump in at lower time frames, on this daily chart, we'll remain cautious until a new pattern develops. Until then, congestion is the most likely scenario.
Weekly: still bearish, so we'll take heed at the 1750 level.
Here again, it's good to see the bar turning yellow as well. We shall however remain VERY cautious as MTFS and Entropy are still quite bearish.
I've been repeating over and over that 1750 is the last defense line and that it would be fought ferociously, so we need a bounce that is strong enough to confirm this support level. Congestion is here again the best looking scenario, as again the patterns can complete merely through the passage of time, and do not necessarily need a new fall (price-time equilibrium).
Tuesday, March 11, 2008
Market Snapshot for RUT - Mar 11th 2008
cf. SPY post below. RUT is highly correlated, so one shall here mainly look at specific MM/Fib levels.
Market Snapshot for NDX - Mar 11th 2008
cf. SPY post below (correlated charts). Since direction is clear, we will watch Fib/MM levels carefully.
Market Outlook SPY for Mar 11th '08
Dominant TF: 60mins, but weekly chart picking up fast.
Swings: DN-DN-DN
Market Direction: down, down, down... yet a support level remains a support level until it is broken. Let's avoid reading too much "gloom & doom" into current charts, and just analyse what charts really tell us and nothing more.
We observed the breakout announced 3 trading days ago on the 60mins chart, and we are since looking for a support level... Nothing can really stop SPY before the 125 level now.
60mins: again looking for support
SPY has almost gone straight down for over a week, so this is the ideal situation for a stall level (reminder; it is half way between the current "white dots" mild support and the the strong MM support at 125). The stall level this time is also close to January lows.
MTFS remains very bearish and could develop a divergence. No positive indication from Entropy either. Now since we saw the MM levels coming down 2 days ago, we have to aim for 126.40 then 125, but we can't really read more into the current chart.
Basically, no recovery in sight, and wait for a pattern to maybe develop on next support level.
NB: we left the cycle indicator on, just to show how erratic cycles can be. At this point in time, the noise level is too high to trust them. It goes without saying that this applies to any cycle detection indicator you may have acquired from popular vendors...
Daily: bearish
MTFS has shown the typical "failed recovery" pattern for a few days. In such situation, SPY can only return to previous lows... or lower. Entropy looks quite bearish, but we will give 125 a chance still. Without being overly optimistic, one can never discard 125 holding.
Weekly: bottom?
For the last few weeks, SPY has been hovering around the low to mid 130s, but we could clearly see that it had no energy to pass the first significant Fib level on the up side and both MTFS and Entropy have always remained quite bearish.
As we have said for RUT and NDX, the patterns must now complete and only a drop or a congestion at these low levels can bring MTFS to oversold levels to see a new pattern then emerging. The key words for the time being are therefore a lot of patience and again and again some caution...
Monday, March 10, 2008
Market Outlook RUT for Mar 10th '08
Dominant TF: 60mins and weekly charts
Swings: DN-DN-DN
Cycles: not quite reliable (good turning points but low signal-to-noise ratio)
Market Direction: down, but support may and even should hold
Position (60mins): some could take profits here.
Options: March iron condor (1.5 week left). April in place:
Short Mar790 Calls, Long Mar800 Calls, Long Mar600 Puts, Short Mar610 Puts
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts
(again one could also be negative delta)
We saw MM resistance levels capping any possible recovery, then support level dropping on Thursday, so RUT was irremediably attracted to the strong support level at 656. Sometimes, markets are indeed very predictable.
We will have to analyse the 3 correlated markets carefully to better assess support levels.
Now, my 2 cents to those who keep asking me "is it time to buy?". Well, we're all different, and I honestly can't tell contrarians what to do (they often wouldn't listen to me). All I can say is that there is no short term recovery, so the question we've been asking ourselves has been: should we exit short? should we be more delta neutral? There again, it is up to each and everyone.
60mins: 656 could hold
RUT has reached its target, so one may have some congestion at this low level or even a short term bounce. No rejoicing though as there is not the slightest sign of a recovery.
Daily: back to lows
Like on the 60mins chart, MTFS and Entropy do not indicate any recovery. However, LEntBin is only at -1, hence this is still the same ongoing price erosion more than a meltdown. In other words, it is likely to be an absence of buyers than sellers pushing the market down.
Weekly: congestion to down
We're now back to the previous lows, i.e. a level we had clearly anticipated. It is Fibonacci PR1 which may act as a support level here confirming the 60mins MM level. MTFS still looks bearish here, but as mentioned over and over on this blog, the negative pressure can also dissipate through the passage of time.
Here again, we have NO sign of recovery, but the conditions could emerge if 656 holds. We just have to be patient.
Friday, March 07, 2008
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