cf SPY post below
Tuesday, February 12, 2008
Market Outlook SPY for Feb 11th '08
Dominant TF: 60mins, with Daily weakening
Swings: DN-DN-DN
Market Direction: down in the longer term, price erosion or congestion with lower bias in the short term
No major change since last SPY post. There is however a feeling the fall may be over. It could be a deceptive impression even if volatility has indeed momentarily come down.
60mins: congestion with slight upper bias
SPY has tested 132 and bounced back a little. There is no energy to take it much higher right now. One shall also notice MM strong support level is now on 137.50, and trading range is now considerably reduced, with a strong support level unchanged at 125.
Most likely outlook is congestion with a very slight upper bias that could eventually take SPY to a PR1 Fib retracement around 134.50 but that remains to be seen...
Daily: continuation of slow erosion for now
The scenario has hardly changed. Recovery failed, and SPY is now slowly coming down. There is little energy either way though. One will keep in mind the MM and Fib targets. SPY could eventually reach a first Fib target just below 130.
Significance level is falling, so one will need to take cues from lower time frames, even in the unlikely event of a Fib pattern emerging north (low:126, high:140, Ret:132)
Weekly: bottom?
Despite the MTFS white line 'hooking up' slightly, and Entropy appearing to have found a bottom, both show a bearish background picture. So we may have a bit of a reprieve, but the negative tone is certainly still there, and we're still aiming at a cup&handle or W pattern formation... or worse.
Monday, February 11, 2008
Market Outlook RUT for Feb 11th '08
Dominant TF: weekly chart taking over, otherwise 30mins.
Swings: DN-DN-DN
Cycles: dominant cycle 126bars pointing down, possible turnaround in about 10 to 15 bars (60mins chart), but confirmation will be needed as it is always the least reliable indicator
Market Direction: none, lower bias still
Position (60mins): flat - delta neutral
Options (since Jan 9th) : Short Feb790 Call, Long Feb800 Call,Long Feb650 Put, Short Feb660 Put. Put spread is relatively safe.
60mins: lower bias
RUT does not show any recovery potential right now. MTFS is still weak and Entropy shows no 'steam' at the moment. Significance level is pretty low, so one should take cues at lower time frames if one is looking for an entry or exit point. Otherwise the most likelt scenario remains continuation of price erosion.
Daily: congestion with lower bias
No change in scenario. There is a feeling that the worst is over for now, but certainly no optimism in the market just yet. Significance level is also dropping, so one should remain cautious.
Weekly: possible pause in down move
It's been a long time since the weekly chart was last the dominant time frame. While the trend remains down here, the MTFS line crossover may indicate a pause. We also see Entropy tempting a recovery. One should therefore not anticipate any substantial fall in the short term. However, no recovery either until the pattern is complete.
Thursday, February 07, 2008
Market Snapshot for RUT - Feb 7th 2008
cf. NDX post below as well as previous RUT post
UNFORTUNATELY NO POST TOMORROW... I KNOW YOU ARE GOING TO MISS IT IN THIS MAD MARKET OF OURS... WELL, AT LEAST THE CHARTS HAVE BEEN RELATIVELY EASY TO READ LATELY, SO NO BIG SURPRISE TO EXPECT.
SEE YOU MONDAY!
Market Outlook NDX for Feb 7th '08
Dominant TF: 60mins
Swings: DN-DN-DN
Market Direction (Daily): congestion with upper bias
Position (60mins): to be on the safe side, would take profits, but otherwise short. Keeping a few call spreads is always a good idea. The more adventurous will place put spreads in the low 1600s.
The rate cut is history now, and the market has resumed its course...
NB: NO SNAPSHOT TOMORROW
60mins: bearish, but strong support level
MTFS lines are still a little bearish so is Entropy which is low and not showing signes of recovery yet. 1750 is a strong support level though, so even if one cannot anticipate clearly the amount of fighting for this level, there is no strong indication it will break at least over the next day or so, even if it can be momentarily penetrated.
Daily: support confirmed but...
OK, the scenario has been described over and over, and we're there now testing 1750 again. The level is now weaker than a few days ago, indicating NDX could go much lower. For the time being, one should not read more than it is visible from the chart and Entropy while not great is not very low. So the level is likely to be fought, and there could be some congestion at this low level over the next few days.
Weekly: bearish
Indeed no reason to be optimistic here. One shall check MM and Fib levels carefully. Do not discard that there is always a chance that 1750 will hold. It is the last defense line before we enter a bear market... Next support level would be 1640.
Wednesday, February 06, 2008
Market Outlook SPY for Feb 6th '08
Dominant TF: 60mins
Swings: DN-DN-DN
Market Direction: obvious
Position (daily): play price erosion or congestion with lower bias
Wasn't bearish enough yesterday on RUT. It was visible a peak was near but I couldn't make out whether RUT would congest or fall even if it became obvious as the day went by, hence the advantage for users to switch to lower time frames in time of indecision.
NB: I'LL BE LEAVING THE OFFICE AT UNEARTHLY HOURS TOMORROW MORNING AND SHALL ONLY BE BACK SUNDAY NIGHT. THERE MIGHT THEREFORE BE NO SNAPSHOT TOMORROW, AND THERE WON'T BE SNAPSHOTS ON FRIDAY.
60mins: clear bearish reversal
SPY is now on its way to test lows again. MTFS is looking south, so is Entropy. However EntBin at -5 could make next Entropy bottom a reversal point. By then, Entropy will have given us a clearer pattern in oversold teritory.
Levels: MM trading range level (1st level above/under pivot level) gives a support just above 134, i.e. close to Fib PR1 level. There is some potential to test the next lower levels though (132, down to 125 eventually).
Daily: peak but no free fall for now
I've been repeating over & over that the MTFS line crossover was not looking good, impeding any serious chance of recovery. SPY has now peaked as expected. However one should not jump to conclusions just yet as MTFS lines look up, so does Entropy. A support level should be found on Fib or MM level, and by then a clearer pattern will emerge to give clues on direction.
Weekly: bottom?
Despite the MTFS white line 'hooking up' slightly, and Entropy appearing to have found a bottom, both show a bearish background picture. So we may have a bit of a reprieve, but the negative tone is certainly still there, and we're still aiming at a cup&handle or W pattern formation... or worse.
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