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.
Friday, January 18, 2008
Market Outlook NDX for Jan 18th '08
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.
