Thursday, November 01, 2007

Market Outlook RUT for Nov 1st '07

Dominant TF: 60mins & Daily.
Swings: UP-UP-UP
Market direction: congestion to mildly down.

Again, strong correlation sith SPY. Volatile environment.
Swings are UP again, indicating we are close to a key level.

60mins: Up, but strong resistance level is close.
MTFS and Entropy are undecided with a remaining upward bias. A clearer pattern may emerge once we have tested a resistance level and MTFS lines finally regroup. For the time being, MM resistance level is 828, the next ones being about 15 points apart.

Daily: Congestion with upward bias - 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 Nov 1st '07

Dominant TF: 60mins and low intraday time frames (Daily not far behind still)
Swings: UP-UP-UP
Market direction: Trading range with lower bias, but check levels and new pattern forming.

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

60mins: congestion to up.
The MTFS pattern is unclear, with some indication of congestion with an upward bias. As we we are seemingly close to a key level, we'll have to watch for SPY's behaviour around the next strong resistance level which is now about 156.Entropy could pick up, but it still looks like a slow down could happen once the key target is reached.

Daily: mildly up but check levels carefully.
The Fed announcement did not provide any significant information: the daily chart still points slightly downward but also acknowledges 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.

Weekly: congestion to mildly UP - Very low significance level, due to MTFS divergence.
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 Nov 1st '07

Dominant TF: 60mins & Daily (10 and 15mins too)
Swings: UP-UP-UP
Market direction: up until resistance is tested.

60mins: Up, but strong resistance is near.
Wild swings yesterday after the rate cut, yet their amplitude was not exceptional if we consider the volatility we've had.My comment from yesterday could not be more valid: "No visible retracement but the market has been very volatile, and may be looking for a slight lower support to bounce higher (2203?)."The current close at 2238 is actually a stall level and a strong resistance in lower time frames, but at the same time energy came late in the market, and should take at least a few bars to dissipate. We are therefore likely to see a continuation of momentum until 2250.

Daily: Up, but expecting a slow down approaching strong resistance level.
NDX is overbought, and yet each retracement so far has failed. Entropy and MTFS are holding well, and will most probably reach 2250 now. Watch lower time frames maybe taking the lead though.

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, but we have to watch how this divergence develops.