Friday, November 16, 2007

Market Outlook RUT for Nov 16th '07

Dominant TF: Daily, and short intraday time frames.
Swings: DN-DN-DN
Market direction: DOWN, but support may be found soon.

Same Nota Bene.... check shorter time frames which seem to indicate strong support on 765.63

60mins: down til support is tested

Significance level is still low, but MTFS and Entropy do indicate RUT going somewhat lower. For the time being, it seems the 766 support level will hold.

Daily: mildly down.
Almost the same as yesterday:MTFS is bearish until lines meet, and Entropy is very bearish although at -5.5 it is likely to bottom out soon. A Fib pattern may have completed at 767, and may be tested again (or close) to complete the pattern fully. There is no indication yet that it will go much lower for now. No chance of a recovery though.

Weekly: congestion to mildly down
At first sight it looks like we had the anticipated double top. However, one should not jump to conclusions just yet, as we may have a broad [750-875] trading range. The 750 level has indeed turned from pivot to strong support level. In addition, we have a PR2 Fib level around 740 and RUT has in the last 2 years always bounced back on PR2, so there is no reason it will behave differently this time.

Market Outlook SPY for Nov 16th '07

Dominant TF: Daily, but mostly shorter intraday time frames
Swings: DN-DN-DN
Market direction: down, til next support level.

Same Nota Bene as for NDX (cf previous post).Lower intraday time frames seem to show the 145.31 level could hold but overall direction is still down.

60mins: Congestion to down - Lower significance level
Entropy and MTFS point toward a minor fall or just a congestion within the current trading range. However 150 is now the upper resistance level, so one cannot discard testing lows again.
One shall note that the 143.8 support level has turned to pivot indicating some bearish potential.

Daily: Down.
MTFS and Entropy do not look good and at this stage it is likely that the fall will continue until MTFS lines meet. We have to see whether the last bounce on PR2 around 145 will hold again.

MTFS may indicate a congestion around current lows.

Weekly: congestion to mildly down - very low significance level.
This time frame has such a low significance level it is pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a down bias. If 145 fails to hold, SPY could well also test the 137.50 level for a 3rd time...

Market Outlook NDX for Nov 16th '07

Dominant TF: Daily, but mostly 10 and 15 mins charts
Swings: DN-DN-UP
Market direction: congestion to down.

Dominant time frames are now shorter intraday time frames , so obviously only users of the TS technique can fully appreciate current dynamics. In particular, a support level at 2015.63 is in place, probably as the last defense line before 2000.

60mins: down
Significance level is declining at this time frame. The MTFS pattern only indicates a trading range with a down bias, so one can only anticipate some attempt to test 2000. Most traders feel the same, so some contrarian behaviour is possible.

Daily: Down, until support is tested again, then possible trading range.
MTFS and Entropy do look bearish and it seems clear the 2000 level will be hit. In such circumstances, the MTFS pattern has to complete, almost always in oversold territory. This indicates a potential to go lower (I mentioned a possible 1935 target yesterday), yet the 2000 level has turned from pivot to strong support, so there will certainly be some fighting on this level.

We can also note that the AutoFib indicator shows a possible recovery (target levels displayed on picture).

Weekly: congestion to mildly down - very low significance level.
We knew we had to watch for that growing divergence, and Entropy peaking. Now, there is still no overall change in direction and this profit taking is only healthy after such a bull run. We have recurrence of the 1935 level, so it could certainly retrace a little more. Speed is however difficult to anticipate in this high vol environment.Again significance level is so low one should not jump to conclusions too quickly.