Wednesday, November 28, 2007

Market Outlook RUT for Nov 28th '07

Dominant TF: Daily, and 15mins (not shown).
Swings: DN-DN-DN (from DN-DN-DN)
Market direction: DOWN, but support may be found in the low 730s

Same situation, so market commentary is quite similar today.
The mild bounce on 734.50 occured as expected.
Note: Check Cycles.

60mins: Down, but probable congestion on strong support level

MTFS and Entropy look a little bearish, and indicator continuation of this [730-750] trading range. Note that there is no recovery potential in the short term.

Daily: down...

MTFS looks bearish but the white line is stabilising indicating there could be a congestion at this low level. Same for Entropy. Increased volatility is possible but no chance of a recovery in the short term. Since MTFS has to complete its pattern, even a recovery would take a few days to exhaust the negative pressure, and could start from this 141 level, or lower around 734 or 730.

Weekly: caution but no panic
At first sight it looks like we had the anticipated double top. However, one should not jump to conclusions just yet, as we may also remain in a broad [750-875] trading range with a lower bias (MTFS lines). 750 is not broken yet on this time frame. 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 28th '07

Dominant TF: 60 mins & Daily
Swings: UP-DN-DN (from DN-DN-DN)
Market direction: mildly down - possible congestion on current levels

Unlike NDX, the daily time frame gives us a very good picture.

60mins: congestion on current levels

Entropy and MTFS both still point toward continuation of price erosion with a possible congestion (140.6 is a support level on lower time frames). No real recovery potential in the short term until we get a clearer picture from MTFS and Entropy.

Daily: Congestion to mildly down.
MTFS and Entropy do not look too good and at this stage it is likely that the fall or at least price erosion will continue until MTFS lines meet. The White Line is stabilising so congestion is a likely scenario, indicating that support levels at 141 could hold (otherwise 137.50). Again let's first wait for a MTFS crossover.
While it is certainly too early, AutoFib has detected a recovery pattern. The last pivot (no4) should however first stabilise to consider it seriously.

Weekly: congestion to down - very low significance level.
This time frame has such a low significance level it is almost 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. The lower end of the range could be tested again.

Market Outlook NDX for Nov 28th '07

Dominant TF: Daily, but mostly 10 and 15 mins charts
Swings: UP-DN-DN (from DN-DN-UP)
Market direction: Congestion. Behaviour around 2000 remains key.

Again, dominant time frames are now shorter intraday time frames, so obviously only users of the TS technique can fully appreciate current dynamics. Reading the 15 mins chart is very simple with a significance level of 91% and looks congested.

60mins: congestion - low significance level due to congestion

We're back on a 2000 support level, and congestion continues. 2030 is now a pivot level on lower time frames and serves as a resistance for the time being. No direction can be drawn from this time frame, but this is a great environment for scalping.

Daily: congestion to down
MTFS and Entropy still look a little bearish but the 2000 cannot be regarded as broken just yet. 2000 is still key level, and a bounce is possible within the next few days. Since the overall mood is bearish such rebound can very much take place a little lower for instance at PR2 (1970). We shall obviously remain careful until the MTFS pattern is completed. One cannot discard a recovery at as Entropy show signs of bottoming out (Bin=-3). The AutoFib gives a potential recovery to levels we have seen recently (COP ~ 2250).
Note: the lower significance level indicates that MTFS will adapt a little late, so recovery (if any) should detected on a 15mins chart.

Weekly: congestion to mildly down - low significance level.

The profit taking we've seen can stop here on the lower channel boundary reinforced by a strong support level. We cannot however ignore a potential breakout to 1935 PR1 retracement level.
Note: Swing uses a search depth parameter of 1 (refined search). Standard search returns UP. This indicates possible indecision on future direction.