cf RUT post below
Thursday, February 21, 2008
Market Outlook RUT for Feb 21st '08
Dominant TF: 60mins, but weekly chart also.
Swings: UP-UP-DN
Cycles: unreliable yet again
Market Direction: none, lower bias still
Position (60mins): flat - delta neutral
Options: March iron condor in place
Short Mar790 Calls, Long Mar800 Calls, Long Mar600 Puts, Short Mar610 Puts
Less than a 20 point range over the last few days. RUT is trying to go north, in an overall environment that remains fairly bearish.
60mins: could test pivot level
MTFS shows capacity to reach ans test target level (MM pivot & Fib target) just below 720. We can notice that 688 also turned to stronger support. Does that mean our market woes are over? Too early to say. Indeed we did not get a clear bounce pattern and Entropy remains pretty weak. So while the bias is up for now, there might be further hesitation going forward.
Daily: same trading range
Significance level is now quite low at this time frame. MTFS remains flat and Entropy is not helping us either. There is no reason to be particularly bullish right now, as RUT could still go either way.
In absence of a market shock it could take a few days for a new pattern to materialise.
Weekly: congestion - possible pause in current down move
As mentioned last time, we are now having a pause in this bear market, with the MTFS white line hooking up. It should not be strong enough to justify a strong recovery but the white/brown lines crossover may indicate an interruption of the fall.
625 was a strong support (688 in lower dominant time frame), as 1750 was on NDX, so the market is probably showing willingness to stay above those levels. Having said that, we have to see the end of the pattern now with the green line joining the party close to oversold levels, either after a further drop or just through the passage of time.
Wednesday, February 20, 2008
Market Snapshot for RUT - Feb 20th 2008
cf. NDX post below
For some odd reason, last Friday's (Feb 15th) postings do no longer appear on this site... No need to post them again now, but in any case, apologies for the inconvenience.
Market Outlook NDX for Feb 20th '08
Dominant TF: 60mins, then Daily
Swings: DN-DN-DN
Market Direction (Daily): on its way to 1750 as expected
Position (60mins): non directional with lower bias.
60mins: obvious
The MTFS pattern was pretty clear until the suprising open yesterday. NDX however quickly resumed its course, now even showing an even clearer Fib pattern, with a 1750 target.
Entropy is pretty week however, so one cannot anticipate volatility or the kind of landing to expect on that level.
Daily: bearish tone
MTFS and Entropy do point towards a congestion at this low level. Now that 1750 is around the corner, we have to see how it will be tested for guidance on forthcoming market direction. For the time being, it seems it can only go lower.
Weekly: again decidedly bearish for now, but support could hold
Indeed no reason to be optimistic right now, but one shall always check MM and Fib levels carefully, and one should not discard that there is always a chance that 1750 will hold if things slow down a little *, particularly if the white line reaches oversold level, where NDX could bounce at least momentarily.
1750 is the last defense line before we enter a bear market. Next support level would then be 1640.
* MTFS has some built-in momentum and can reach oversold level as time simply goes by, instead of only following price action. This means that a congestion at this low level may complete the pattern more or less the same way as a market fall would.
Monday, February 18, 2008
Market Outlook SPY for Feb 19th '08
Dominant TF: 60mins, with Daily weakening
Swings: DN-DN-DN
Market Direction: possible pause or price erosion in the short to medium term. Testing 125 or stall level at high 120s is more than likely.
No major change since last SPY post. SPY went up a little, down a little, and remains directionless in the short term.
60mins: congestion with slight upper bias
MTFS does not exhibit any clear pattern, and is indictative of a possible trading range. We will however watch Fib patterns developing upward or downward depending on pivots. The late recovery on friday is not affecting the Swing indicator yet, so we would favour a target down (132.20 then possibly lower). This will take a few days to materialise anyway.
Daily: trading range but...
beware of a volatility slowdown as a breakout can happen either way in the coming days. The bias is still down so one should favour a new test of recent lows.
MTFS is not helping at the moment, nor Entropy which is remarkably weak. Significance level is low, so one may have to pay more attention the 30 and 60 mins charts to get a better perception of market dynamics.
Weekly: bottom?
Again, despite the MTFS white line hooking up slightly, and Entropy appearing to have found a bottom, both show a relatively bearish background picture. So we may have a bit of a reprieve, but the negative tone is certainly still there, at least until the pattern is complete (line crossover and/or green line in oversold territory). This could help the formation of a a cup&handle or W pattern... or go lower although still unlikely at this stage.
Thursday, February 14, 2008
Market Outlook RUT for Feb 14th '08
Dominant TF: 60mins, but weekly chart also.
Swings: UP-DN-DN
Cycles: unreliable yet again
Market Direction: none, lower bias still
Position (60mins): flat - delta neutral
Options: March iron condor in place
Short Mar790 Calls, Long Mar800 Calls, Long Mar600 Puts, Short Mar610 Puts
We had the turnaround given by cycle indicator on the 60mins chart. It is supposed to be a risky indicator, but can be quite useful too.
Yesterday, we have been surprised by the strength of the upward move. The Swing indicator was certainly already up, but in this overall bearish environment, i thought the resistance would hold. The long term scenario remains the same though.
60mins: good upward momentum now
Gap at open was not anticipated. Some exogenous shock (economic news) changed the dynamics slightly.
MTFS is now looking good, so recovery could technically take RUT to previous highs, and eventually all the way to 750. Entropy is not looking bad either and can sustain momentum a little further.
However the MM and Fib targets (~719) have not been passed clearly yet, so one should be careful not to be over-bullish too quickly.
Daily: same trading range
No big change at this level. We are in the same trading range, with no clear MTFS pattern and a weak Entropy. Despite this momentary reprieve, one shall watch mid to high 730s (i.e. recent highs, if hit again that it) carefully for clues on market direction.
Weekly: congestion - possible pause in down move
As mentioned last time, we are now having a pause in this bear market, with the MTFS white line hooking up. It should not be strong enough to justify a strong recovery but the white/brown lines crossover may indicate an interruption of the fall.
650 was a strong support, as 1750 was on NDX, so the market is probably showing willingness to stay above those levels. Having said that, we have to see the end of the pattern now with the green line joining the party close to oversold levels.
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