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.
Wednesday, January 16, 2008
Market Outlook RUT for Jan 16th '08
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.
Saturday, January 12, 2008
Market Outlook NDX for Jan 14th '08
Dominant TF: Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): somewhat unreliable in this market
Market Direction (Daily): volatile with a down bias
Position (60mins):
Short: nothing wrong with taking profits
Flat: wise
Long: betting on a recovery is very risky
Since i closed my short position (too) early), i leave the position indication for those who haven't. I bet on a bottom coming soon, but admittedly this is not in the chart yet.
60mins: continuation of price erosion
It is not possible to say at this stage whether NDX will remain in a trading range or try and test support level. The fall stopped on Jan 9 on MM stall level which has been tested again.
We can also notice that significance level is also declining.
Daily: congestion to erosion
Unsurprisingly NDX resumed south as MTFS and Entropy do still point down. One shall notice that the MTFS white line is tempting an upturn. We should however not expect any significant recovery to expect here. On the contrary, unless volatility brings new surprises, NDX should remain in current trading range [high 1800s - low 1900s] until the negative pressure is exhausted. We shall look closely at MTFS lines joining and Entropy bottoming out over the next few days.
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.
Friday, January 11, 2008
Market Outlook RUT for Jan 11th '08
Dominant TF: 60mins & Daily
Swings: UP-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction: recovery needs confirmation
Position:
Short: exited
Long: shorter time frames only
One can note significance level is declining a bit, indicating lower time frames are slowly taking over.
60mins: fall may be over, but no strong recovery just yet
RUT is crawling back to Fib PR1, and we should wait to see what will be coming next. There is some recovery potential, yet one should be cautious and analyse dynamics in shorter time frames.
Daily: congestion
The falls may be over, but one should wait at least for Entropy to find a bottom. At -5, EntBin is very low so this may happen soon. The MTFS shows a 'broken fall' pattern, which is a transition mode only. One can therefore anticipate a trading range in the low to mid 700s.
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 11th '08
Dominant TF: Daily & 60 mins
Swings: UP-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction (Daily): probably lower still
Position (60mins):
Short: exited
Flat: wise
Long: lower time frames only
One can take cues from RUT or NDX as patterns are quite similar.
60mins: recovery attempt - check resistance levels
MTFS is looking a little better now. SPY retraced up to Fib PR1 (38.2%) and could evel reach the 50% level right on MM pivot level. At the same time, there is little energy left.
Daily: congestion to down
Like with NDX and RUT, SPY had to hit its target, and remains a little bearish. Negative pressure is fading faster than anticipated so a trading range around current levels is quite possible.
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 to consider the fall to be finally over.
Weekly: congestion to down
SPY will now be looking for direction now that lows have been tested again. The bias however remains down, at least until Entropy picks up again.
Market Outlook NDX for Jan 11th '08
Dominant TF: 60mins & Daily
Swings: UP-DN-DN (from DN-DN-UP)
Cycles (DomTF): have been turned off as too unreliable in this market
Market Direction (Daily): volatile with a down bias
Position (60mins):
Short: exited
Flat: wise
Long: risky
60mins: congestion to very moderately up
NDX is crawling up, but is not showing much energy to go significantly higher. MTFS shows a slight up bias, so NDX may reach PR1 just above 1980 though.
Daily: congestion to erosion
NDX took a bit of a breather yesterday, but MTFS and Entropy do still point down. One shall notice that the MTFS white line is tempting an upturn. We should not expect any significant recovery to expect here, NDX should even carry on losing ground. However, the Fib pattern is completed, so we are now waiting for the next event, either test 2000 or or lows again. In such volatile environment both events may occur, yet the down bias should prevail in the end.
Weekly: definite down bias, check Fib and MM levels
It seems the bull run is now over so we may need to enter a correction mode (not bear mode yet though). One can notice that the Swing indicator is hesitant at this level.
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.
