Market Outlook RUT for Nov 29th '07

Dominant TF: Daily, and 15mins (not shown).
Swings: UP-UP-DN (from DN-DN-DN)
Market direction: UP, but recovery must be confirmed.

See yesterday's post ("Check Cycles") as well as NDX and SPY commentaries today.

60mins: Up, but recovery must be confirmed.
Admittedly surprised by yesterday's move.
MTFS and Entropy look better but the MTFS green line is lagging behind while the white line reaches overbought territory very quickly. This indicates a likely pause (we even have a possible AutoFib pattern pointing south).
The 150 level could even be tested again for support.

Daily: congestion to mildly up
We expected a congestion and we got that sudden burst upward. The MTFS crossover on a negative gradient does not point for RUT going much higher for now, and while the fall looks stopped, a stronger base will need to be found to go higher (150?).
As for other instruments, cycles seem to show a turning point, however slightly delayed compared to NDX. Looking at MTFS, it is quite possible that such turnaround will occur after a stronger support is found within a few bars.

Weekly: return to the trading range
It is interesting to see RUT possibly closing the week over the lower end of the channel. For the time being, let's push the 'double top' scenario a little further (we might dump it in a few weeks). We're therefore now back in our [750-875] range, and pretty much directionless there.
Again, RUT has always bounced on PR2 in the last 2 years, and it may just behave the same this time again.

Market Outlook SPY for Nov 29th '07

Dominant TF: Daily
Swings: UP-DN-DN (from DN-DN-DN)
Market direction: up, but a pause is likely.

See notes on NDX post, in particular about cycles. SPY cycle seems a little lagged compared to NDX's

60mins: up, but recovery must be confirmed
Admittedly surprised by the strength of this recovery, even if we knew a breakout was possible. MTFS and Entropy do point higher but caution must be exercised. A pause is quite possible on the way to 150.

Daily: up, but recovery must be confirmed
Despite yesterday's "burst" MTFS and Entropy still do not look great. At this stage we can assume the price erosion has stopped but it is likely that the recovery will need a stronger base. Let's wait until MTFS lines meet. When confirmed, we'll watch for the AutoFib targets and obviously the 50% retracement and MM level at 150.

Weekly: congestion - very low significance level.
This time frame has such a low significance level it is almost pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a down bias. The lower end of the range could be tested again.

Market Outlook NDX for Nov 29th '07

Dominant TF: Daily, but mostly 10 and 15 mins charts
Swings: UP-DN-DN (from UP-DN-DN)
Market direction: Recovery is yet to be confirmed.

You may have noticed over the last few days that i advised
about checking lower times frames, as something was boiling under the hood. Secondly, I mentioned yesterday that it would be worth taking a look at cycles. Of course, I have warned again that cycles must be analysed with a lot of caution, yet it seems to have proved right this time.

60mins: up, but check resistance level around 2095 then 2125
The 2030 pivot level disappeared at the open, and the 2060 didnt show much resistance either. Fractal levels are still about 31 points apart, and NDX gathered enough momentum to get the next resistance level (more significant on lower time frames). Current level can hower pause the recovery.
Indeed MTFS and Entropy are strong but 'half-way' through only. Recovery must therefore be confirmed. Again, it is recommended to follow the 15mins chart (Sig Level = 92%).

Daily: mildly up
I would suggest reading yesterday's commentary again.
A bounce was announced, but due caution was also expressed as such recovery could have started from a lower base. Having said that, cycles, AutoFib, and engaging looking at lower time frames should have made possible to be there on time.
Where do we go from here? The MTFS pattern is not bullish yet so it is essential to wait to see the recovery confirmed over the next few days. Such recovery after such an incredible day (+3%) will obviously slow down. It is likely that if/once 2125 is passed, NDX will likely return to the overall bullish trend and reach Fib targets.

Weekly: congestion to mildly up - low significance level.
Bounce on the lower end of the channel and 2000 support level should help NDX go a little higher.
This is however not a very significant time frame.


Reminder on cycles:
1) check error level is close to Lag128's optimal error level
(a visual check can do no harm either)
2) check shape of blue curve (quarter cycle phase advance) for a top/bottom
3) count bars (quarter cycle) to gauge potential forthcoming turnaround on cycle (magenta curve)
4) ALWAYS CHECK FOR SUPPORTING INFORMATION (MAINLY MM AND FIB)

NOTE: This genetic algorithm is VERY processing intensive so should only be applied to EOD charts

Market Outlook RUT for Nov 28th '07

Dominant TF: Daily, and 15mins (not shown).
Swings: DN-DN-DN (from DN-DN-DN)
Market direction: DOWN, but support may be found in the low 730s

Same situation, so market commentary is quite similar today.
The mild bounce on 734.50 occured as expected.
Note: Check Cycles.

60mins: Down, but probable congestion on strong support level
MTFS and Entropy look a little bearish, and indicator continuation of this [730-750] trading range. Note that there is no recovery potential in the short term.

Daily: down...
MTFS looks bearish but the white line is stabilising indicating there could be a congestion at this low level. Same for Entropy. Increased volatility is possible but no chance of a recovery in the short term. Since MTFS has to complete its pattern, even a recovery would take a few days to exhaust the negative pressure, and could start from this 141 level, or lower around 734 or 730.

Weekly: caution but no panic
At first sight it looks like we had the anticipated double top. However, one should not jump to conclusions just yet, as we may also remain in a broad [750-875] trading range with a lower bias (MTFS lines). 750 is not broken yet on this time frame. In addition, we have a PR2 Fib level around 740 and RUT has in the last 2 years always bounced back on PR2, so there is no reason it will behave differently this time.

Market Outlook SPY for Nov 28th '07

Dominant TF: 60 mins & Daily
Swings: UP-DN-DN (from DN-DN-DN)
Market direction: mildly down - possible congestion on current levels

Unlike NDX, the daily time frame gives us a very good picture.

60mins: congestion on current levels
Entropy and MTFS both still point toward continuation of price erosion with a possible congestion (140.6 is a support level on lower time frames). No real recovery potential in the short term until we get a clearer picture from MTFS and Entropy.

Daily: Congestion to mildly down.
MTFS and Entropy do not look too good and at this stage it is likely that the fall or at least price erosion will continue until MTFS lines meet. The White Line is stabilising so congestion is a likely scenario, indicating that support levels at 141 could hold (otherwise 137.50). Again let's first wait for a MTFS crossover.
While it is certainly too early, AutoFib has detected a recovery pattern. The last pivot (no4) should however first stabilise to consider it seriously.

Weekly: congestion to down - very low significance level.
This time frame has such a low significance level it is almost pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a down bias. The lower end of the range could be tested again.

Market Outlook NDX for Nov 28th '07

Dominant TF: Daily, but mostly 10 and 15 mins charts
Swings: UP-DN-DN (from DN-DN-UP)
Market direction: Congestion. Behaviour around 2000 remains key.

Again, dominant time frames are now shorter intraday time frames, so obviously only users of the TS technique can fully appreciate current dynamics. Reading the 15 mins chart is very simple with a significance level of 91% and looks congested.

60mins: congestion - low significance level due to congestion
We're back on a 2000 support level, and congestion continues. 2030 is now a pivot level on lower time frames and serves as a resistance for the time being. No direction can be drawn from this time frame, but this is a great environment for scalping.

Daily: congestion to down
MTFS and Entropy still look a little bearish but the 2000 cannot be regarded as broken just yet. 2000 is still key level, and a bounce is possible within the next few days. Since the overall mood is bearish such rebound can very much take place a little lower for instance at PR2 (1970). We shall obviously remain careful until the MTFS pattern is completed. One cannot discard a recovery at as Entropy show signs of bottoming out (Bin=-3). The AutoFib gives a potential recovery to levels we have seen recently (COP ~ 2250).
Note: the lower significance level indicates that MTFS will adapt a little late, so recovery (if any) should detected on a 15mins chart.

Weekly: congestion to mildly down - low significance level.
The profit taking we've seen can stop here on the lower channel boundary reinforced by a strong support level. We cannot however ignore a potential breakout to 1935 PR1 retracement level.
Note: Swing uses a search depth parameter of 1 (refined search). Standard search returns UP. This indicates possible indecision on future direction.

Market Outlook RUT for Nov 27th '07

Dominant TF: Daily, and 15mins (not shown).

Swings: DN-DN-DN (from DN-DN-DN)

Market direction: DOWN, but support may be found in the low 730s

Same situation, so market commentary is quite similar today

60mins: Down, but probable congestion on strong support level

MTFS and Entropy look bearish, with congestion potential around the [730-750] trading range now that 750 is 'history'. RUT will try and stop its fall on 734.5, then 730 (would take more than a day though).Note that there is no recovery potential in the short term.

Daily: down...

Bearish MTFS lines have quite negative gradients indicating RUT going lower, thus pushing support level also lower (730?). The white line is stabilising indicating there could be a congestion at this low level... but certainly no chance of a recovery in the short term. The next Fib level is around 731 (close to August lows). 730 will be a key level. Since MTFS has to complete its pattern, even a recovery would take a few days to exhaust the negative pressure.

Weekly: caution but no panic

At first sight it looks like we had the anticipated double top. However, one should not jump to conclusions just yet, as we may also remain in a broad [750-875] trading range with a lower bias (MTFS lines). The 750 level has indeed turned from pivot to strong support level. In addition, we have a PR2 Fib level around 740 and RUT has in the last 2 years always bounced back on PR2, so there is no reason it will behave differently this time.

Market Outlook SPY for Nov 27th '07

Dominant TF: 60 mins & Daily

Swings: DN-DN-DN (from DN-DN-DN)

Market direction: down

Unlike NDX, the daily time frame gives us a very good picture.

60mins: Down, but possible congestion on current levels

Entropy and MTFS both still point toward continuation of price erosion with a possible congestion (140.6 is a support level on lower time frames). No real recovery potential in the short term until MTFS lines join.

Daily: Down.

MTFS and Entropy do not look good and at this stage it is likely that the fall will continue until MTFS lines meet. SPY could eventually fall further to 141 (Fib) or even 137.50 (MM).While it is certainly too early, AutoFib has detected a recovery pattern. The last pivot (no4) should however first stabilise to consider it seriously.

Weekly: congestion to down - very low significance level.

This time frame has such a low significance level it is almost pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a down bias. The lower end of the range could be tested again.

Market Outlook NDX for Nov 27th '07

Dominant TF: Daily, but mostly 10 and 15 mins charts

Swings: DN-DN-UP (from DN-DN-DN)

Market direction: Congestion to down. Behaviour around 2000 remains key.

Again, dominant time frames are now shorter intraday time frames, so obviously only users of the TS technique can fully appreciate current dynamics. Reading the 15 mins chart is very simple with a significance level of 91% and point decidedly south.

60mins: congestion to down - low significance level due to congestion

2000 has been broken, but lower time frames show a 1989 support level anyway, and those times frames are more significant at the moment. MTFS and Entropy do not point towards a fall so 1989 should hold in the short term.

Daily: congestion to down

MTFS and Entropy still look bearish but the 2000 cannot be regarded as broken just yet. 2000 (or 1989?) is still key level, and a bounce is possible in the next few days. Since the overall mood is bearish such rebound can very much take place a little lower for instance at PR2 (1970). We shall obviously remain careful until the MTFS pattern is completed. One cannot discard a recovery at this level. The AutoFib gives a potential recovery to levels we have seen recently (COP ~ 2250).

Note: the lower significance level indicates that MTFS will adapt a little late, so recovery (if any) should detected on a 15mins chart.
Weekly: congestion to mildly down - low significance level.

We knew we had to watch for that growing divergence, and Entropy peaking. Now, there is still no overall change in direction and this profit taking is only healthy after such a bull run. We have a potential 1935 PR1 retracement level, so it could certainly come a little more down. In such case one cannot ignore that breaking the current channel would accelerate into serious selling pressure (PR2 = 1750 ...) but no panic just yet. 2000 is still holding...

Thanksgiving

A bit of a technical bounce on Friday, but volumes are very low on this half-day Friday.

Updating charts would not be significant.

See you next week.

Market Outlook RUT for Nov 23rd '07

Dominant TF: Daily, and 10mins (not shown).
Swings: DN-DN-DN (from DN-DN-DN)
Market direction: DOWN, but support may be found in the low 730s

60mins: Down, but probable congestion on strong support level
MTFS and Entropy look bearish, with congestion potential around the [730-750] trading range now that 750 is 'history'. RUT will try and stop its fall on 734.5, then 730 (would take more than a day though)

Daily: down...
Bearish MTFS lines have quite negative gradients indicating RUT going lower, thus pushing support level also lower (730?). Definitely no chance of a recovery in the short term. The next Fib level is around 731 (close to August lows), but one should not panic just yet... at least not until 730 breaks as well... We have to wait for the MTFS pattern to complete to get a better picture.

Weekly: caution but no panic
At first sight it looks like we had the anticipated double top. However, one should not jump to conclusions just yet, as we may also remain in a broad [750-875] trading range with a lower bias (MTFS lines). The 750 level has indeed turned from pivot to strong support level. In addition, we have a PR2 Fib level around 740 and RUT has in the last 2 years always bounced back on PR2, so there is no reason it will behave differently this time.

Market Outlook SPY for Nov 23rd '07

Dominant TF: 60 mins & Daily
Swings: DN-DN-UP (from DN-DN-DN, weekly swing is hesitant)
Market direction: down

60mins: Down, but possible congestion
Entropy and MTFS both still point down but the MTFS white line holding above shows congestion potential. MTFS lines will now probably meet lower. No real recovery potential in the short term.

Daily: Down, but check for support level.
MTFS and Entropy do not look good and at this stage it is likely that the fall will continue until MTFS lines meet. SPY could eventually fall further to 141 (Fib) or even 137.50 (MM). However the current fall in Entropy is not too alarming (see LEntBin), so congestion may happen on this support level.

AutoFib already gives some potential recovery levels (L1 to L5) if current swing pivot holds (this is however too early).

Weekly: congestion to mildly down - very low significance level.
This time frame has such a low significance level it is almost pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a down bias.
Caution: One shall note that 143.75 has broken, Swing indicator is hesitant at this level indicating we are close to a key level. One should also check for a possible channel breakout.