cf SPY post below
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.
Tuesday, February 05, 2008
Market Outlook RUT for Feb 5th '08
Dominant TF: 60mins taking over, Daily declining
Swings: UP-DN-DN
Cycles: unreliable (too trendy)
Market Direction: upward retracement on downward dominant trend
Position (60mins): looking for long exit point
60mins: peak?
RUT hasn't done too badly this last few days, with the 688 pivot level tested twice giving the rebound more vigor. RUT is however now lacking steam to go much higher. Having said that this MTFS+Entropy configuration is not the easiest to read, so we'll give the up Swing the benefit of the doubt and opt for a very mild upward bias. From a level point of view, the resistance could be around current mid 720s at least for now.
Daily: upward retracement
Despite the Swing remaining decidedly down, retracement has proven stronger than anticipated. While not overly convincing, MTFS and Entropy are positive, so RUT may even reach the low to mid 740s. This is in no way a return to a bull trend though, and RUT may slow down and congest a little.
Weekly: back to lows...?
The Fed cut shifted the scenario upward by 50 to 70 points but no real change in current outlook. Certainly a bit of a reprieve at the moment but it is only if 750 is broken with assurance that we could envisage the end of the current correction. For the time being, while Entropy is looking slightly better, MTFS is still quite bearish.
Monday, February 04, 2008
Market Outlook NDX for Feb 4th '08
Dominant TF: 60mins
Swings: UP-DN-DN
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): congestion with upper bias
Position (60mins): flat, however selling 2150 call spreads is still a very conservative bet, Feb 2000 is pretty safe too
Fed rate cut brought a bit of volatility to leave finally the market more or less in it (short term) recovery course. Having said that, little visibility... and little chance to see NDX pass the 1875 level.
60mins: congestion with a remaining slight upward bias.
MTFS lines are about flat in median territory, so is Entropy, and not help from levels right now (possible target at 1875). Swing quality is lower that higher time frames which are pointing down.
Daily: support confirmed but...
Such MTFS crossover is hordly ever indicative of a good recovery. However lines are pointing up and Entropy is also doing better confirming the upward bias for now. One can notice that the Fed cut had very little effect, so the momentary boost we've had may lapse soon...
Weekly: definite down bias still
No reason to be optimistic here, so while some may want to go contrarian in shorter time frames, one should remain VERY cautious long term.
Friday, February 01, 2008
Market Outlook SPY for Feb 1st '08
Dominant TF: 60mins
Swings: UP-UP-DN
Market Direction: congestion with upper bias in the short term
Position (daily): flat for most, long entry (a week ago) in shorter time frames. Long term: non-directional with lower bias
Got it a little wrong yesterday on RUT at 60mins level, as i didnt anticipate an up day. Volatility is indeed sometimes difficult to capture. The general outlook is however unchanged: caution is to be exercised. The market is not the easiest to read at present, and some may want to stay on the side line or play non directional as congestion is likely.
60mins: the market is trying to break out but...
SPY is testing MM pivot level and could well break out on the up side, but that it is still unlikely looking at current chart. It twice stopped on Fib target and is not showing energy to reach higher levels for now.
Daily: no strong recovery just yet
As said again and again, the MTFS line crossover cam too early, indicating in most cases either a failed recovery or at least a double bottom or cup&handle formation. Can yesterday's lows be the new support level? Possible even if not convincing. The 60mins chart is now dominant, so we'll have to take cues from behaviour at lower time frames for now. With the benefit of the doubt, MTFS line gradients, increasing entropy etc. a positive bias is there for the time being.
Weekly: bottom?
MTFS and Entropy do still point downward, but EntBin is only -1 and MTFS significance level is quite low. No rejoicing however as we have to wait for Entropy to bottom out, MTFS to look better and the end of the series of red bars.
Not sure when this will happen, but a recovery is possible (MTFS white line turning up in oversold territory, and Entropy bottoming). Again MTFS lines gradients do not indicate a return to the bull market though.
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