Tuesday, November 06, 2007

Market Outlook RUT for Nov 6th '07

Dominant TF: 60mins & Daily.
Swings: DN-DN-UP
Market direction: mildly down, looking for support.

60mins: congestion to down.
MTFS and Entropy indicate a possible bottom, but there is still some negative entropy to dissipate in a narrow trading range. RUT may also try to look lower for a stronger support.

Daily: down but support level on 791 is so far holding.
We seem to have a Fib pattern forming, but 791 may not hold very long as MTFS and Entropy look more and more bearish now. One could therefore see RUT going lower to 781 (Fib + MM level).

Weekly: congestion to mildly down
Entropy and MTFS indicate continuation of this situation of congestion with a slight downward 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 6th '07

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

Like NDX, SPY has closed on a nice round number. Difficulty is that at this point in time, we have no clear indication of direction going forward.

60mins: undetermined.
MTFS is still stitting beareish on a very strong Fib + MM support. With a high significance level, the recovery potential is minimum at best yet Entropy seems to have bottomed. Forthcoming direction is impossible to determined as it can go either way from this key 150 level.

Daily: down, but possible congestion.
Significance level is slowly coming down, indicating we'll have to pay more attention to lower time frames.150 is obviously a difficult level to pass, but we certainly have a negative bias, so SPY may look for a stronger support (Fib?). For the time being, MTFS is not very bearish, hence the lower part of the [150-156] range is still valid.

Weekly: probable congestion - Very low significance level, due to MTFS divergence.
Entropy is looking OK, but MTFS indicates continuation of this situation of congestion with a slight upward bias. Watch for divergence and possible double-top.With such a low significance level, one should rather take cues from lower time frames.

Market Outlook NDX for Nov 6th '07

Dominant TF: 60mins & Daily
Swings: DN-UP-UP
Market direction: still mildly up.

Yesterday's Close is a nice round number, yet there is a lot of indecision in the air.

60mins: Mildly down, congestion.
We've been used to wild swings, so yesterday was calm in comparison. MTFS and Entropy are both indicative of congestion and the 2188 MM level seems to hold. It may provide some strength later on to reach 2250 (potential Fib pattern). It is however far too early now for such scenario.

Daily: Congestion to Up, slow down approaching strong resistance level.
Apart the presence of a yellow bar, nothing much has changed, so NDX should creep up to previous highs, albeit considerably slower in comparison to what we've seen in the last couple of months. The rise may stall, but certainly no strong retracement in sight.

Weekly: congestion to mildly UP - Low significance level.
Entropy is still looking very good, but MTFS has difficulty adapting to such a strong run (U-shape pattern is not closing). 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. A peak in Entropy will also be an alert of a change in dynamics.