cf. NDX post below for guidance
Monday, May 05, 2008
Market Outlook NDX for May 5th '08
Dominant TF: Daily
Swings: UP-UP-DN
Market Direction (Daily): up overall, but volatile still.
Cycles: unreliable
Position (60mins): long but target in sight
NDX has been overbought for a while, and we kept being surprised by the continued rise, like an irresistible attraction to the 2000 level. I admittedly expected a pause on the way to the resistance level which didn't happen. Now let's have a look at the current situation now that we have reached that level already.
60mins: overbought, but the bias is still UP
NDX is overbought but is attracted artificially by the 2000 level, cancelling all potential retracement attempts. NDX could hit 2000 again, even several times, but a pause is now likely at this level. We will keep an eye on shorter time frames (15 and 30mins) as well as on EURUSD, and until then the bias remains UP.
Daily: up but congestion is likely around 2000
Again, no major change since last post. We now have to wait for the MTFS pattern to complete when lines meet. Entropy is very high so point for some minor retracement or even just some congestion as MTFS lines are quite bullish.
Weekly: Resistance level around 2000
The Swing is still down, in agreement with MTFS which is still only in an upward retracement mode.
This confirms the scenario whereby the 2000 area should remain a strong resistance level (Fib + MM).
A (moderate) retracement would not suprise us before passing the 2000 level later on, as this would allow the MTFS pattern to complete and the Swing indicator to toggle up.
Thursday, May 01, 2008
Market Snapshot for NDX - May 1st 2008
cf. SPY post below for guidance.
NOTE: there will be no Market Snapshot tomorrow Friday 2nd
Market Outlook SPY for May 1st '08
Dominant TF: weekly and daily charts.
Swings: DN-UP-DN
Cycles: unreliable
Market Direction (daily): congestion to upper bias
Position (60mins): flat (too volatile at this time frame)
SPY reacted negatively to the Fed announcement, and this may trigger the profit taking we anticipated lately. We will also keep an eye on 1.5625 on EURUSD.
NOTE: there will be no Market Snapshot tomorrow Friday 2nd
60mins: directionless, erosion is likely
We have the most erratic MTFS behaviour, so we'll stay away from this time frame (sig. level is low anyway). It is likely that SPY will go lower and test 137.50 again.
Daily: congestion with upper bias
Last post was correct but it seems we are now closer to some profit taking. We shall notice the high EntBin (=4) and a peaking white line on MTFS. Since the other lines are about mid way and pointing up still, a retracement should be limited. We will therefore check the 137.50 levels as well as other possible Fib levels ans channel lows.
As said last time, the way to 150 should be a little bumpy...
Weekly: aiming higher but retracement is likely at first
No change from last post:
MTFS lines are certainly pointing higher but the pattern itself is not a recovery pattern. In most cases, this kind of pattern announces a retracement at some point. Now that the PR1 Fib level seems passed, this may happen on the 50% Fib level or higher, and looking at previous support levels, testing 137.50 could set a strong base going forward.
Wednesday, April 30, 2008
Market Outlook ER2 (RUT) for Apr 30th '08
Dominant TF: weekly chart, 60mins had to be retuned
Swings: DN-UP-UP (weekly swing hesitant)
Cycles: good fit but high noise level
Market Direction: upper bias
Position (60mins): undecisive.
Options (RUT):
Short May780 Calls, Long May790 Calls,
Long May550 Puts, Short May560 Puts
RUT (ER2) has tried to breakout on the up side as expected, but has shown little energy and is now trying to find some support to possibly go higher later on. A pause or retracement seems inevitable even if we cannot pinpoint the exact timing right now. Shorter time frames may help.
We will also follow EURUSD and QM closely. We spotted the breakout as it happened, and still believe 1.5625 to be a key level going forward.
60mins: will MM pivot level hold?
MTFS is not giving us a clear pattern, and Entropy is weak and relatively directionless. In absence of any significant economic news (GDP?), no major move to expect over the next few bars.
Daily: same upper bias, but a retracement will be necessary.
We are again at range highs, and while MTFS looks positive, the white line is close to overbought level with other lines lagging behind. If we add a high entropy level (EntBin = 4), a retracement should occur shortly. This means that we should not pass range highs in the short term.
Weekly: congestion
The worst certainly seems over, and the upper bias is still there, so ER2 is trying to pass Fib PR1 yet with some difficulty. To be on the safe side though, we will wait for the MTFS pattern to complete now (line crossover). Until then we have to consider the remaining downward pressure which will slowly dissipate.
ER2 can also possibly reach the very strong 750 resistance level before retracing/congesting but the most likely scenario for the time being is the same [690-730] trading range. Levels above 750 are quite unlikely in the next couple of months.
Tuesday, April 29, 2008
Market Outlook NDX for Apr 29th '08
Dominant TF: Daily.
Swings: DN-UP-DN
Market Direction (Daily): up overall, but volatile still.
Cycles: good fit, and long cycle peak detected
Position (60mins): flat
NDX is crawling up... aiming unconvincingly at 2000. A pause looks more and more likely.
60mins: overbought, trying to go higher
NDX has passed 1900 and is trying to go higher. MTFS is however overbought and if we look at a lower time frame (15mins has a higher significance level), we have a strong resistance in the higher 1930s. A retracement is possible in the short term (cycle peak).
Daily: wavy up...
No major change since last post: NDX is on its way to 2000. The MTFS pattern is now confirmed and should continue until lines meet again somewhere near overbought level. We however notice tht the white line is peaking and EntBin is very high, hence NDX could possibly take a pause in the short term. In the worst case, NDX would test channel lows or back to the 1875 pivot level.
Weekly: a pause on the way up is likely
Like on lower time frames, it is now visible that NDX is aiming at 2000 (MM + Fib). We can however notice that this could leave the bearish MTFS incomplete. While possible, this scenario remains unlikely and a consolidation seems necessary at some point. We'll therefore check for a Fib/MM level (1950?) for a retracement which will help complete the MTFS pattern.
As said earlier, the 2000 level will be key to market direction for the rest of the year.
(May call spreads above 2000 are quite safe)
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