cf. NDX post below for guidance.
Monday, June 30, 2008
Market Outlook NDX for Jun 30th '08
Dominant TF: 60mins, Daily, but would also follow 15mins
Swings: UP-DN-DN (from DN-DN-DN)
Position (60mins): profit taking, or still short
Market Direction (Daily): drifting down
Yesterday's forecast for ER2 was again accurate with the fall stalling on the mid 690s, however no recovery in sight just yet...
About NDX, last post insisted on looking at pure price patterns such as Fib and MM levels, as support levels are not easy to determine and do not coincide across time frame seems. We should see portfolio readjustments and repositioning over the next few weeks as earnings come out.
NB: During summer months, there will be only 1 FREE market snapshot per week. No change for subscription clients.
60mins: volatile, but congestion with lower bias overall.
There are several possible scenarios and on account of likely window dressing for 2Q08, institutionals may move the market up or down today.
Technically, we do not have a recovery setup in MTFS so despite some buying and possible testing of the MM pivot level, NDX may resume south later on in the day. Switching to a 15mins TF (dominant) would help.
Daily: continuation of price erosion until support level is found
MTFS is somewhat bearish but Entropy may bottom out in the next couple of days, so again, if we except for spurrious volatility in the short term, NDX should try and find support on Fib PR2 near 1816... or lower...
Weekly: Looking for buyers
No major change from last post: Again it seems the buyers are waiting for a support level to get back into the market (or are they on holiday already?). Bars have turned decidedly red, the Swing indicator toggled back to Down and Entropy has peaked. However MTFS despite showing a "failed recovery" pattern, is not quite indicative of a market fall just yet. We do acknowledge however that the last bar being very bearish indicates a lower support level.
Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators, and we will rather focus on price patterns at this level: we will again keep in mind the last high around 2050 could turn into a full downward Fib pattern (target 1700), or could still be erased to take NDX back to last year's highs (>2200). Again we will remain very cautious until a pattern is confirmed over the next 3 to 6 weeks. Nothing wrong with switching to lower time frames or otherwise enjoying some holiday...
Friday, June 27, 2008
Market Snapshot for NDX - Jun 27th 2008
cf. ER2 post below for guidance. Market correlations along with analysis of specific Fib/MM levels will provide a clear picture for this symbol.
Note: like for ER2, the MTFS acceleration has been tuned to 0.15 to better fit with price action. I know "curve fitting" seems dreadful to some analysts, but in this case that's exactly what we are looking for.
Market Outlook ER2 (RUT) for Jun 27th '08
Dominant TF: weekly, 60mins, with Daily declining
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction(daily): short
Position (60mins): short
Options (RUT): 625 or lower for July puts.
Yesterday's post on SPY proved correct again, yet some self criticism engages me to admit i expected more short term support (see 60mins section yesterday) while my target (see Daily section) was about spot on.
On ER2, last post was also correct, and here again we see how correlated markets are since both should find support by end of the month. Obviously, we'll see institutionals doing some window-dressing to make their balance sheet look better if they can, hence quite some volatility is anticipated over the next couple of days.
60mins: lower, looking for support.
MTFS is quite oversold, and LEntBin is typically in bounce area (-5) so since ER2 closed yesterday on MM stall level (~696), we may see prices hovering somewhere current lows and MM support level at 688.
Daily: lower, aiming at 688
Significance level was low for bearish MTFS so i retuned it slightly. One could otherwise just follow price patterns. Anyway it seems ER2 is aiming straight at 688 which is a Fib/MM target level. "Retuned" MTFS is not too bearish so that level should hold. Obviously, we would like to see Entropy bottoming too.
Weekly: lower for now... is the tide turning?
No change from last post: As mentioned on other symbols, the eventuality of a pivot level around last highs (765) makes this configuration crucial as a Fib pattern can develop both ways in the coming months. While remaining very cautious going forward, we still believe a support will be found to eventually take ER2 higher.
Thursday, June 26, 2008
Market Outlook SPY for Jun 26th '08
Dominant TF: weekly, 60mins and lower intraday TFs
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction (daily): further erosion
Position (60mins): short
On NDX yesterday, support was found indeed as anticipated, but my short term forecast was wrong as i did not expect a strong bounce. However, this is only a 1-day glitch and the daily trend remains unchanged. I also wish to remind my warning to switch to lower intraday time frames to capture yesterday's move.
Back to SPY now: Last post on June 23rd indicated a possibility of reaching a lower Fib target, yet also insisted on the strength of the current MM support level. We've indeed seen a mild bounce on 131.25 which has some difficulty in materialising into a stronger recovery.
Note on EURUSD: we're in a trading range which could breakout either way. We still favour a scenario of the $ strengthening a bit over the longer term but short term players seem to see it differently. Again we have to first wait for reactions to the Fed meeting next week. There are also more and more rumours of central banks to intervene too.
60mins: looking for direction on support level.
MTFS shows some recovery potential on support level, but it will need to be confirmed first. SPY may test the support level again, as Entropy is too weak to take SPY higher straight away. The overall trend being down, one may just stay in a congestion area from current lows to Fib PR1.
Daily: lower
Bars are still red, and every indicator is somewhat bearish so support will have to be found lower, to a possible 100% fib retracement, i.e. close to year lows.
Our target is MM stall level just above 128. We also have a Fib target in the same area.
Weekly: crucial time...
No major change from last post except that a retracement is now in place with a Swing indicator now firmly down. We are therefore eagerly waiting to see where the support level will be...
This is indeed a crucial configuration as the last pivot point (144.30) is now developing into a full downward Fib pattern with a 125 target level at first.
MTFS looks more and more like a failed recovery pattern, confirming this scenario mentioned several times over the last couple of weeks.
Wednesday, June 25, 2008
Market Outlook NDX for Jun 25th '08
Dominant TF: none really... 60mins at best otherwise switch to 30mins and lower intraday time frames
Swings: DN-DN-DN (from UP-DN-UP)
Position (60mins): short
Market Direction (Daily): drifting down
Yesterday's forecast for ER2 was again pretty accurate with a definite continuation of the lower move with some buying pressure during the course of the day only to resume its course south to the mid 700s. with indeed some congestion early in the day and then the development of an upward Fib expansion pattern.
Now back to NDX, last post insisted on switching to lower time frames to capture the change in dynamics. NDX indeed failed to reach 2000 (on stall level at lower time frames). The question now is: where are we going to find support and sufficient energy to reach last year's highs again?
NB: I invite readers to always consult posts for all three symbols for a better long term outlook as all three are quite correlated, yet also provide interesting information when analysed individually.
60mins: short term support may be found.
NDX yesterday bounced on the 30mins stall level (1890) which is also a Fib target hence some support at that level. MTFS is however not indicating any strength so we should see continuation of price erosion like seen on the last 2 bars of the day. NDX could therefore hit 1890 again and even go a little lower. However congestion with a lower bias remains our favourite scenario for now.
Daily: some price erosion looking for a support level.
The cyan support trendline drawn the other day has proved correct and we may be entering a down channel. Despite lower signinficance level, we also notice MTFS drifting and Entropy being slightly negative. We'll be looking at pure price patterns for a support level which could be a little lower.
Weekly: Congestion at key level
It seems the buyers are waiting for a support level to get back into the market. Bars have turned red, the Swing indicator toggled back to Down and Entropy has peaked. However MTFS is not indicative of a market fall, but only of a congestion with a now lower bias. Obviously, MTFS patterns sometimes fail to complete or fail altogether hence our reading method from several angles.
On last post, we noticed: MTFS and Entropy seem to be resilient for the time being, yet we also do notice the MTFS white line weakening and Entropy peaking though.
While we have some divergence forming we shall again keep in mind the lat high around 2050 could indeed turn into a full downward Fib pattern (target 1700), or could still be erased to take NDX back to last year's highs (>2200).
Again we will remain very cautious until a pattern is confirmed over the next 3 to 6 weeks. Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators.
Tuesday, June 24, 2008
Market Outlook ER2 (RUT) for Jun 24th '08
Dominant TF: weekly, 60mins, with Daily declining
Swings: DN-DN-DN (from DN-DN-UP)
Market Direction(daily): short to flat
Position (60mins): short
Options (RUT):
July: 830 is safe on the up side, 625 on the down side. Some will peg their puts lower.
Yesterday's post on SPY proved correct again with the continuation of the lwer bias while the strong 131 support level still holds. On ER2, I advised to move to lower time frames or stay flat for a short while, and direction indeed reversed on June 20th. I hope you also did.
60mins: lower
MTFS is certainly oversold and pointing down yet despite the bearish last 2 bars, 719 is a strong support level which should be fought still. Entropy is only moderately down, and we'll also watch for a possible lower Fib support also. Price erosion may continue in a series of waves with short-sellers buying back their positions and then selling again. Ultimately, support may be found as low as around 700s or slightly lower.
Daily: lower, but support levels must be checked.
MTFS and Entropy remain both relatively undecisive yet with a lower bias. We'll therefore watch pure price patterns such as this Fib/MM support. Should this strong 719 support level break, the next levels are around 702 and 689 with a stall level in between.
Weekly: lower for now... is the tide turning?
As mentioned on other symbols, the eventuality of a pivot level around last highs (765) makes this configuration crucial as a Fib pattern can develop both ways in the coming months. While remaining very cautious going forward, we still believe a support will be found to eventually take ER2 higher.
Saturday, June 21, 2008
Market Outlook SPY for Jun 23rd '08
Dominant TF: weekly and... intraday TFs (10mins!)
Swings: DN-DN-DN (from DN-DN-UP)
Market Direction (daily): retracement
Position (60mins): short
On my last SPY for June 20th, my position was short and it still is. Admittedly i did not expect more than price erosion, but derivatives expiry seems to have exacerbated volatility again. You will as a matter of fact also notice that i recommended staying on the side line yesterday for NDX. Obviously shorter intraday time frames provided the accurate picture.
Note on EURUSD: we'll keep an eye on 1.5625 key level. The Fed meeting next week may impact the €/$ rate. There are more and more rumours of central banks intervening too.
60mins: down, looking at possible short term target.
MTFS and Entropy both point for continuation of the down move to the next MM or Fib target level. MM support was hit intraday and will be tested again. The Auto Fib calculated the next target level (L3) at 129.71 yet one should not understimate the strength of the current MM support level which could hold at least over the next few bars.
Daily: lower
Our trading range has been broken on the down side, so we may hit MM stall level just above 128 pretty soon. We also have a Fib target in the same area. MTFS is now fairly bearish so this scenario has little chance to fail.
Weekly: crucial time...
No major change from last post except that a retracement is now in place with a Swing indicator now firmly down. We are therefore eagerly waiting to see where the support level will be...
This is indeed a crucial configuration as the last pivot point (144.30) is now developing into a full downward Fib pattern with a 125 target level at first.
MTFS looks more and more like a failed recovery pattern, confirming this scenario mentioned several times over the last couple of weeks.
Friday, June 20, 2008
Market Outlook NDX for Jun 20th '08
Dominant TF: none here! switch to 30mins and lower intraday time frames
Swings: UP-DN-UP (from DN-DN-UP)
Position (60mins): long, target in sight
Market Direction (Daily): congestion to down
Yesterday's forecast for ER2 was pretty accurate with indeed some congestion early in the day and then the development of an upward Fib expansion pattern.
Now back to NDX, last post brought about the new MM resistance level on 2000, which explains both the attraction and hesitation at that level. We also notice poor significance level indicating a necessity to switch to lower time frames for entry/exit points.
60mins: up, target in sight.
NDX is again trying to reach 2000 and may again fall a little short of that target. We do have a Fib pattern and a positive MTFS in favour of an upper bias, but we'll also take into account lower significance level and triple witching day today. A lot of traders will stay on the sideline today. So will we.
Daily: trading range for the time being
Despite yesterday's up day, MTFS is still only pointing towards some congestion or trading range, hesitating between an upper and a lower bias from one day to the next. There could obviously be new energy if 2000 is broken decisively but we are at this point in time more likely to see 2000 as a strong resistance level.
We will keep an eye on a down channel possibly forming soon.
Weekly: Congestion at key level, minor upper bias remaining.
Despite current volatility, we see no major change at this level. We're now entering a congestion phase around the key 2000 level. MTFS and Entropy seem to be resilient for the time being, yet we also do notice the MTFS white line weakening and Entropy peaking though. Significance level being lower, we'll take the current picture with a pinch of salt and concentrate on pure price formations. On such crucial test level, Fib patterns can develop both ways here, even if a downturn still looks unlikely.
Pivot number 3 (2050) could indeed turn into a full downward Fib pattern (target 1700), or could still be erased to take NDX back to last year's highs (>2200). Again the cautiously bullish scenario is still favoured for now and confirmation should come within 3 to 6 weeks. Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators.
Thursday, June 19, 2008
Market Outlook ER2 (RUT) for Jun 19th '08
Dominant TF: weekly, 60mins, with Daily declining
Swings: DN-DN-UP (from UP-UP-UP)
Market Direction(daily): congestion at first
Position (60mins): flat
Options (RUT):
June positions can be closed or left to expire gracefully.
July condor positions are similar with 830/840 calls.
Yesterday's post on SPY proved correct. We should actually SPY going lower still. On ER2, no real surprise either even if the recovery broke our 734 resistance momentarily to reach a slightly higher Fib target.
With derivatives expiring, a forthcoming Fed meeting and expected interventions of central banks to try and push the US$ higher, there is increased uncertainty in the market, so caution should be exercised at the moment. Having said that, let's now have a look at what the current charts are telling us.
60mins: congestion to lower bias but...
Technically, we see MTFS lines separating generally indicating divergence of forces hence possible congestion. However Entropy shows signs of bottoming up so we may end up in a up Fib expansion pattern (bounce on 61.8% PR2 retracement yesterday).
Daily: same trading range
ER2 remains undecisive in the same [719:750] trading range itself split in 2 halves. With significance level declining, one could be tempted to take cues from lower intraday time frames. My advice however would be to stay non directional or stay cautiously on the side line for the time being.
Weekly: up recovery is now quite weaker
Similarly to the Daily TF, ER2 is here slowing down near resistance level. As mentioned on other symbols, the eventuality of a pivot level around last highs (765) makes this configuration crucial as a Fib pattern can develop both ways in the coming months. For the time being, the current situation is fine for theta players and the bearish scenario is still remote.
Wednesday, June 18, 2008
Market Outlook SPY for Jun 18th '08
Dominant TF: weekly and... intraday TFs (10mins!)
Swings: DN-DN-UP (from DN-DN-DN)
Market Direction (daily): retracement
Position (60mins): short
Taking a look at the last SPY post on June 10th, I see myself mentioning NDX finding support around 1908, and indeed it bounced at 1909. Not too bad I would say...
It seems that tech stocks led the way, hence SPY followed suit and recovered before reaching the lower target i gave. However this may just be a small timing glitch. Let's see where SPY is going now.
Note: EURUSD is in a trading range, with a slight lower bias. Shorter time frames are recommended.
60mins: lower bias, looking for support around 134.3
It is a pity that significance level is coming down because we have a classic bearish MTFS formation which could take SPY back to recent lows. Lower intraday time frames are not helping at the moment, so a trading range with a lower bias, i.e. SPY drifting a bit is our only scenario right now.
Daily: trading range
Like on the 60mins chart, SPY seems constrained in a [133:137.50] trading range with a lower bias. Entropy is weak and MTFS is also not indicating more than a drifting situation. The market is maybe waiting for triple witching and the next Fed meeting to find a direction.
Weekly: crucial time...
No major change from last post except that a retracement is now in place and we are eagerly waiting to see where the support level is...
This is indeed a crucial configuration as the last pivot point (144.30) could well develop a down Fib pattern for which we would then have a 125 target level.
No panic however as we certainly have only little indication of bearishness in MTFS and Entropy, so this is only little more than a congestion period at this level still, also visible from the Swing indicator hesitating around current levels. We still favour a return to bullish mode over the medium term, but as said above, new information will be needed to determine direction.
Tuesday, June 17, 2008
Market Outlook NDX for Jun 17th '08
Dominant TF: 60mins and lower intraday TFs also
Swings: UP-DN-UP (from DN-DN-UP)
Position (60mins): long, target in sight
Market Direction (Daily): congestion to down
Yesterday ER2 broke the 734 resistance level we gave. While the direction was correct, the MM-Fib combination gave 734 more weight, yet it is true that 738 was also a possibility.
About NDX, I admittedly didn't give enough credit to the bounce potential (hence my advice to look at lower intraday TFs), but this does not change our scenario.
60mins: up, target in sight.
On last post, we noticed MM levels shifting south, and NDX bounced quickly to Fib PR1 also close to a moderate MM level. NDX since crept higher and is now on its way to 2000 (also Fib PR2). MTFS shows a relatively straight path to that target. At this point in time, Entropy is up yet not too strong, so we see the 2000 target level and resistance holding.
Daily: congestion, and then...
Despite the last few retracement days, there is little change from last post. MTFS is still pointing down with only the white going flat, and Entropy is also indicating a minor lower bias.
So, after bouncing on Fib level, NDX should remain in a trading range with a lower bias. We also notice a lower significance level so entry/exit points must be found on lower intraday time frames.
Weekly: Congestion at key level, minor upper bias remaining.
Despite current volatility, we see no major change at this level. We're now entering a congestion phase around the key 2000 level. MTFS and Entropy seem to resist for the time being, yet we do notice the MTFS white line weakening and Entropy peaking though. Significance level being lower, we'll take the current picture with a pinch of salt and concentrate on pure price formations. On such crucial test level, Fib patterns can develop both ways here, even if a downturn still looks unlikely.
Pivot number 4 (2050) could indeed turn into a full downward Fib pattern (target 1700), or could still be erased to take NDX back to last year's highs (>2200). Again the cautiously bullish scenario is still favoured for now and confirmation should come within 3 to 4 weeks. Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators.
Sunday, June 15, 2008
Market Outlook ER2 (RUT) for Jun 16th '08
We've seen some waves of buying over the last few days, so one may want to switch to lower time frames should one wish to catch optimal entry/exit points.
Dominant TF: all 3
Swings: UP-UP-UP
Market Direction(daily): up, congestion at first
Position (60mins): flat to long
Options (RUT):
Short Jun790 Calls, Long Jun800 Calls OR
Short Jun830 Calls, Long Jun840 Calls for those who opted for safety 2 weeks ago
Over the last few days, we've seen the 719 MM pivot level acting as support. The bounce was even strong enough to quickly reach Fib PR1.
As a note: some have misunderstood Friday's comments on SPY "We've seen some waves of buying over the last few days, so one may want to switch to lower time frames should one wish to catch optimal entry/exit points." Even if the bounce was stronger than anticipated, the point was to go to lower time frame to catch a decision point. Some would have bought at that lower time frame, some would however try and get a better short re-entry point. Exact entry/exit signals would go beyond the scope of this blog. Please contact me for more info.
60mins: mild upward retracement
ER2 has almost hit Fib PR1 after bouncing on MM level. MTFS could indicate ER2 creeping a little higher but this is unlikely. We'll keep an eye on a shorter time frame (10mins) where 734 is a strong MM resistance level which will certainly be tested vigorously but should hold.
Daily: entering a trading range
Despite the up day on friday, ER2 remains slightly bearish so a congestion or trading range is likely. Such trading range is [719:750] itself split in 2 halves. MTFS and a mild negative Entropy indicate that ER2 should remain in the lower part [719:734].
We correctly mentioned last time that the 719 support level hold and we still think so.
Weekly: up recovery is still valid for the time being
Similarly to the Daily TF, ER2 is here slowing down near resistance level. As mentioned on other symbols, the eventuality of a pivot level around last highs (765) makes this configuration crucial as a Fib pattern can develop both ways in the coming months. For the time being, the current situation is fine for theta players and the bearish scenario is still quite remote.
Friday, June 13, 2008
Market Outlook SPY for Jun 13th '08
Dominant TF: all 3
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction (daily): retracement
Position (60mins): short
We were bearish on our last June 10th post with the finger on the button on a possible breaking of the key 137.50 pivot level which eventually fell without much resistance from buyers.
A fairly straightforward situation overall.
Taking a look back at NDX yesterday, spot on again with the selling first slowing down then resuming yet the support is indeed to be found lower around 1908 for now.
More hesitation on EURUSD at our time frames. Those who insist on trading it will move to shorter intraday time frames. We will keep an eye on 1.5381 which could open the way to a firmer $.
60mins: lower, looking for support
As anticipated last time, MM levels have shifted south. Everyting is still pointing toward SPY drifting to the MM support level near 131.25 yet a slow down near stall level is likely (132.69). We've seen some waves of buying over the last few days, so one may want to switch to lower time frames should one wish to catch optimal entry/exit points.
Daily: looking for support
Last SPY post could not be more right and we are still looking at 133 being tested soon. MTFS and Entropy being fairly bearish, SPY could even (momentarily) go lower.
Weekly: crucial time...
No major change from last post except that a retracement is now in place and we are eagerly waiting to see where the support level is...
This is indeed a crucial configuration as the last pivot level (144.30) could well develop a down Fib pattern for which we would then have a 125 target level.
No panic however as we certainly have no indication of bearishness in MTFS and Entropy, so this is only little more than a congestion period at this level still. We still favour a return to bullish mode over the medium term.
Thursday, June 12, 2008
Market Snapshot for ER2 - Jun 12th 2008
cf. NDX post below for guidance.
Note: a similar symbol analysis does not eliminate the need for specific level calculations.
Market Outlook NDX for Jun 12th '08
Dominant TF: 60mins and daily (lower intraday TFs also)
Swings: DN-DN-UP (from DN-DN-UP)
Position (60mins): short
Market Direction (Daily): down
Yesterday ER2 went down all day to the 719 target I gave, so quite a straightforward day for daytraders. Clues provided on EURUSD were also about spot on.
NDX went a fairly straight path downhill to even come to an interesting breakout situation...
60mins: lower, but heavy selling should abate today
NDX is certainly quite bearish, and this is also noticeable from prices being below their red paintbars. Such momentum even made NDX go straight through the strong MM support level. The MM trading range we've seen since May 28th is also shifting south with 2000 being a strong resistance level now. MTFS is however a little bit less morose than the overall picture may appear, since the line crossover may indicate a slowdown of the fall and a lower support level coming.
Daily: breakout seems confirmed but no panic
The channel and then the support breakout did not suprise us at all. We all noticed the bullish MTFS pattern (since March) stalling around 2000 without fully completing the pattern. MTFS is now indicating a mild retracement, probably to the next fib level (PR1) around 1908. Since volatility is high, we'll obviously keep a close look at possible lower Fib levels too but the MTFS green line is high and Entropy is mild, so no panic just yet...
Weekly: Congestion at key level, minor upper bias remaining.
Despite current volatility, we see no major change at this level. We're now entering a congestion phase around the key 2000 level. MTFS and Entropy seem to resist fairly well, but significance level being lower, we'll take the current picture with a pinch of salt and concentrate on pure price formations. On such crucial test level, Fib patterns can develop both ways here, even if a downturn still looks unlikely.
Pivot number 3 (2050) could indeed turn into a full downward Fib pattern (target 1700), or could still be erased to take NDX back to last year's highs (>2200). Again the cautiously bullish scenario is still favoured for now and confirmation should come within 3 to 4 weeks. Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators.
Wednesday, June 11, 2008
Market Outlook ER2 (RUT) for Jun 11th '08
Dominant TF: all 3
Swings: DN-DN-UP
Market Direction(daily): up, congestion at first
Position (60mins): short
Options (RUT):
Short Jun790 Calls, Long Jun800 Calls OR
Short Jun830 Calls, Long Jun840 Calls for those who opted for safety
Sudden mood change on June 6th, but those who followed recommendations to switch to shorter time frames just went with the flow.
60mins: retracement slowing down
ER2 is now in a mild correction mode. Fib levels give a possible support around current lows, but ER2 could well drift lower to ~728 (stall level in shorter time frames) or right down to 719 strong support level.
A soft landing is the favoured scenario, but we'll remain cautious as we're in a high volatility environment right now.
Daily: up trend being challenged
We first notice a very alarming candle formation which often leads to a sizeable retracement. A target around 720 (also visible on the 60mins chart) is certainly in the cards. MTFS is not indicative of a fall, but of a congestion with a lower bias, so we believe at this point in time that the coming support level will hold.
on EURUSD, we have a support level just below yesterday's lows and a possible target at 1.5381. A bounce to 1.550 is possible.
Weekly: up recovery is still valid for the time being
We now have a better idea of where the long awaited resistance level actually is. We shall probably see the expected consolidation developing over the next few weeks but while we keep a close eye on a possible pivot level and new fib formation, we still only anticipate a congestion to minor retracement for the time being.
Tuesday, June 10, 2008
Market Snapshot for ER2 - Jun 10th 2008
cf. SPY post below for guidance.
Note: This blog will be updated weekly from Sep 1st. Daily snapshots will be provided to subscribers of the service.
Market Outlook SPY for Jun 10th '08
Dominant TF: all 3
Swings: DN-DN-DN (weekly Swing hesitation)
Market Direction (daily): correction
Position (60mins): short to flat (flat to long in shorter intraday time frames)
We haven't taken a look at SPY in a while on account of a bad data quote last week. It seems that last post was correct and those who went short with a 137.50 target made some profit and are possibly still in.
About NDX yesterday, spot on again as we indeed saw a support near recent lows in the morning to then resume the fall to stall level in the 1950s.
EURUSD: soft landing in the short term, but could erode a little more. Direction obviously correlated to oil futures.
60mins: lower, possible congestion
MTFS is indicating a first attempt to stop the fall, but this is probably shortsellers squaring positions near day close. One should see the major 137.50 support tested as resistance or SPY eventually just resuming the fall. In any case, the direction over the medium term seems clear enough. To mitigate this scenario though, only a shift in MM levels will confirm a new battleground, and we'll have to see how 137.50 resists first.
Daily: looking for support
We warned about being careful on key 137.50 level, and we see now the channel being broken and MTFS indicating more erosion, so support level will be found lower, probably near 133. We'll remain very cautious over the medium term even though we don't seem to be back into bearish mode just yet.
Weekly: caution but no panic
The anticipated congestion is now turning into retracement. Like on the daily chart, we will be looking for the same support level keeping in mind this is a crucial configuration as the next pivot level could well develop a down Fib pattern. We would then have a 125 target level.
No panic just yet as we certainly have no indication of bearishness in MTFS and Entropy, so this is only little more than a congestion period at this level still.
We still favour a return to bullish mode over the medium term.
Monday, June 09, 2008
Market Outlook NDX for Jun 9th '08
Dominant TF: 60mins and daily (lower intraday TFs also)
Swings: DN-DN-UP (from DN-DN-UP)
Position (60mins): short
Market Direction (Daily): congestion - trading range
A lot of volatility lately, hence my recommendation to move to lower time frames in my last NDX post. Again, directional traders are recommended to switch to lower time frames. Nothing wrong with staying on the side line either until the picture gets clearer.
60mins: lower, but beware of spurrious volatility
MTFS is obviously bearish, so is Entropy. NDX is likely to hit recent lows again (~1980) where it will hopefully find support... NDX could actually fall further (stall level ~1955, and strong support at 1938).
We will again follow EURUSD and oil prices for clues on direction and levels.
Daily: congestion to possible channel breakout on the downside
No major change from last NDX post: NDX is in a congestion phase with a remaining slight upward bias. We will also be cautious about this indecision by checking channel lows. In case of a breakout, NDX could find support near 1950, i.e. close to possible support levels found on the 60mins chart. Since NDX could also bounce, we will remain cautious or switch to lower time frames.
Weekly: Congestion at key level, upper bias remaining.
No major change at this level:
The Fib/MM levels (2000-2021) have been slowing down the seemingly irresistible ascension back to former highs. MTFS is still somewhat bullish and Entropy has not peaked yet. NDX may eventually keep hovering in a [1950:2050] range for a while, but until MTFS and Entropy actually confirm the slowdown, we will assume a "cautious" positive bias going forward.
Again, i wish to emphacise this is a key level as Fib patterns can develop both ways here, even if a downturn definitely looks unlikely.
Pivot number 3 (2050) could indeed turn into a full downward Fib pattern (target 1700), or could still be erased to take NDX back to last year's highs (>2200). Again the cautiously bullish scenario is still favoured for now and confirmation should come within weeks. Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators.
Friday, June 06, 2008
Market Snapshot for NDX - Jun 6th 2008
cf. ER2 post below for guidance.
There will be no post for SPY today, due to bad data near day close, not yet corrected at time of posting, and obviously affecting calculations.
Market Outlook ER2 (RUT) for Jun 6th '08
Dominant TF: daily, weekly, with 60mins lagging a bit
Swings: UP-UP-UP
Market Direction: up
Position (60mins): long
Options (RUT):
risky, but should be OK
Short Jun790 Calls, Long Jun800 Calls (spread value 3.8 on May 5th)
Safe (if moved as earlier mentioned with small profit)
Short Jun830 Calls, Long Jun840 Calls
Wrong data on SPY (TradeStation) so we'll comment ER2 again today
The 750 breakout did surprise us in terms of timing and volatility, even if the direction has been UP for a while.
You will notice that a clear word of warning was given yesterday in the 60mins section.
60mins: resistance level
We switched to lower TFs yesterday to realise 765.60 is now the strong resistance level since 11AM, this leaving room to the upward move we've seen. The mid 760s are also fib targets so while there is a remaining positive bias, we should see a slowdown today. We notice an inverted MTFS which is a sign of spurrious volatility. Again, we should either trade shorter time frames in the direction of the dominant TF (daily).
Daily: up trend but no runaway rally just yet
Again, we warned about this breakout. However there is no indication of a change in dynamics with a MTFS pattern in "creeping" mode and an Entropy that remains fairly weak. We shall therefore only consider the 750 level as being penetrated and the up channel being the main driver for now. A slowdown is likely with a possible test of 750 as support later on.
on EURUSD, we gave the right target on 1.5381, but admittedly were surprised by the bounce on that level (however visible on oil prices hitting their channel lows)
Weekly: still up... where is the resistance level!?,
Yesterday's post was full of question on this crucial test level. A consolidation seems necessary but we surprisingly haven't seen it yet. This at least tells us that the reversal scenario is now remote.
I however reiterate that this MTFS pattern is not indicative of a straight path to last year's highs.
Subscribe to:
Posts (Atom)
