Saturday, November 17, 2007

Market Outlook SPY for Nov 19th '07

Dominant TF: Daily
Swings: DN-DN-DN
Market direction: down, til next support level.

Again it is recommended to study all three daily snapshots not only to get an overall picture but to better understand the technique itself.
60mins: Congestion to down - Fairly low 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. Lower time frames which have proved more significant lately give a 144.53 support level.One shall note that the 143.8 support level has turned to pivot indicating some bearish potential. We have to see how the MTFS pattern develops until lines meet.
Daily: Mildly 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 RUT for Nov 19th '07

Dominant TF: Daily, and 10mins (not shown).
Swings: DN-DN-DN
Market direction: DOWN, but support may be found soon.

The strong support level on 765.63 shown on short time frames yesterday has been confirmed now on the 60mins chart. We have a recovery potential until 774 in the short term after the afternoon run on Friday.

60mins: down til support is tested
Significance level is still low, but MTFS and Entropy do indicate RUT going somewhat lower. The 766 level should not hold, but in the meantime we should have some fighting on current level. Please note that failing to pass 781 would immediately mean bears testing the 750 level (Fib target and strong MM level).

Daily: mildly down.
Again we have to wait until the bearish MTFS finally meet. Entropy shows signs of bottoming out, and the MTFS white line has recovered a bit, yet the lines gradients indicate RUT going lower or at least remaining in a congestion area around current levels. No chance of a recovery for the time being.

AutoFib seems to indicate a possible Fib down pattern, yet 750 would have to be passed first. If so, a Fib target at 731 close to August lows could be reached.

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 NDX for Nov 19th '07

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

I repeat the same caveat: Dominant time frames are now shorter intraday time frames , so obviously only users of the TS technique can fully appreciate current dynamics. The 2015.63 support level held, and the 2031 pivot level also held when tested early afternoon, giving bulls some hope the worst is over. The day ended on a high note at 2048.

60mins: [2031-2063] trading range at first
Significance level is declining at this time frame. The MTFS pattern only indicates a trading range with a slight up bias. A graphical pattern should prevail (pennant or MM level breakout)

Daily: Down, then possible trading range.
MTFS and Entropy both look quite bearish and as expected 2000 had to be tested (low 2006). We however here have conflicting information arising from the MM level which shows a reinforced support level. The MTFS white line has started showing some inflexion, so there will be some fighting going in and a a trading range with a lower bias is likely at first.Please note that the MTFS pattern has to complete with lines joining almost always in oversold territory. This indicates a potential to go lower. If 2000 breaks, we have a possible 1935 target later on. On the other hand, should the latest pivot point hold we have our AutoFib showing a potential recovery to levels we have seen recently (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.