Wednesday, October 31, 2007

Market Outlook RUT for Oct 31st '07

Dominant TF: Daily (and low intraday time frames)
Swings: DN-DN-UP
Market direction: congestion to mildly down.
Again, strong correlation sith SPY. Volatile environment.

60mins: congestion to mildly down.
After reaching a Fib PR2 on the up side, we are likely to go back to 812 which is also a Fib + MM level on the down side now. RUT is a little directionless ahead of the Fed announcement, but we have a negative bias so long.

Daily: Congestion - trading range.
the daily chart still points downward despite support found recently on 789. Watch for a Fib pattern forming either way, but there is a little bit more of a down bias right now. Until then, we can assume a trading range [797-828] within a larger one [781-855].

Weekly: congestion to mildly UP
Entropy is looking good, but MTFS indicates continuation of this situation of congestion with a very slight upward bias. We can note that we are again very close to a key level at this time frame with the Swing indicator oscillating frequently.

Market Outlook SPY for Oct 31st '07

Dominant TF: Daily and low intraday time frames (60mins catching up)
Swings: DN-DN-UP
Market direction: Trading range with lower bias, but check levels and new pattern forming.

Note: Swings have turned down on both 60mins and daily charts, indicating a possible key level around current prices.

60mins: congestion to down.
We could not quite gauge what would happen when SPY would hit 154.15, but in hindsight this slowdown looked normal (Fib PR2).MTFS looks congested but Entropy certainly points down, so we again have to wait a little until a clearer pattern forms. It can still be a return to highs around 157 or a test of recent lows at 149.

Daily: Congestion to mildly up but check levels carefully.
As said yesterday the daily chart still points a little downward but also seems to have acknowledged the 150 support level. The MTFS pattern is however not bullish, nor is Entropy. It is safe to say that it should remain in the 150 to 156 trading range, but we'll have to follow Fib and MM levels very carefully as a new pattern should emerge shortly (Fed announcement...)

Weekly: congestion to mildly UP - Very low significance level.
Entropy is looking OK, but for the time being MTFS indicates continuation of this situation of congestion with an upward bias.

Market Outlook NDX for Oct 31st '07

Dominant TF: Daily and 60mins (10 and 15mins too)
Swings: UP-UP-UP
Market direction: congestion.
Note: Virually no change from yesterday.NDX is still hovering around stall level, ahead of Fed rate announcement.

60mins: congestion to upward bias.No significant change.
There has been some profit taking on 2218 which is a strong resistance level in lower time frames, indicating the stall level is definitely in place. 2250 is still the target but certainly harder to reach.The market remains bullish and even if Entropy has slowed down, the target remains in sight.No visible retracement but the market has been very volatile, and may be looking for a slight lower support to bounce higher (2203?).

Daily: Congestion to Up. Slow down in overbought territory.
Same situation:NDX is overbought, and each retracement so far has failed. Entropy and MTFS are holding well, so one may just try and reach 2250 (or stay at prior stall level around current highs).

Weekly: congestion to mildly UP - Low significance level.
Entropy is looking very good, but MTFS has difficulty adapting to such a strong run (U-shape pattern is not closing). We therefore have 'waves in overbought zone' which may justify looking at a higher time frame. It seems we're entering a period of congestion, at least compared to the seemingly unstoppable bull run we've had. Looking at MTFS, no retracement in sight just yet.