Friday, November 30, 2007

Market Outlook RUT for Nov 30th '07

Dominant TF: Daily, and 15mins (not shown).
Swings: UP-UP-DN (from DN-DN-DN)
Market direction: Congestion to Up.

60mins: Congestion.

Pattern is unclear but parallel and slightly downward MTFS lines tend to indicate congestion, and Entropy has also peaked.

Daily: congestion to mildly up
This early MTFS crossover is very seldom conducive to a definite change in direction. A congestion is likely, and RUT should try and find a stronger base for support.
As for other symbols, RUT seem to show evidence of a cycle turning point, so any retracement should be limited (757, and 750 in the worst scenario)

Weekly: return to the trading range

We're now back in our [750-875] range, and still pretty much directionless. It will be interesting to see whether RUT closes the week over the lower end of the channel (~763). It seems that the 'double top' scenario is now a little more remote, but we should wait for the bar to change colour first.

Market Outlook SPY for Nov 30th '07

Dominant TF: Daily
Swings: UP-UP-DN (from DN-DN-DN)
Market direction: up, but a pause is likely.

Note: swing gradient are opposite on daily and weekly charts, and both have too steep a gradient to be stable.
Daily chart has a much higher significance though so overall upward bias is likely.

60mins: congestion to up

Recovery stalled on PR1 (38.2% Fib upward retracement), and there will be hesitation between running for 150 and pausing a bit. MTFS and Entropy show signs of weakening albeit without serious downward pressure. A [147-150] trading range is likely.

Daily: congestion to up
Again, PR1 at 147.10 marked a pause in current recovery. MTFS is not showing the easiest pattern as an early crossover (above oversold territory) generally occurs on negative gradient indicating a forthcoming double bottom or cup and handle. The positive gradient this time may mean little or no retracement down to a stronger base for rebound.
SPY will try and reach Fib expansion levels starting with 148.4, but MTFS indecision may mean some congestion ahead.

Weekly: congestion - 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 slightly upward biased (higher highs and higher lows).

Market Outlook NDX for Nov 30th '07

Dominant TF: 60mins, but 15 mins charts
Swings: UP-UP-DN (from UP-DN-DN)
Market direction: Recovery is yet to be confirmed.

2nd day recovery was mild but at least held up. Again a stronger base is needed to go higher but should it fail to retrace (2062?) a congestion at first may be good enough.
Lower time frames provide a better picture at the moment.

60mins: congestion to up, but some retracement is also possible.
MTFS and Entropy show a likely slow down, but in this high volatility environment NDX may have enough momentum to reach the 2125 pivot level first.

Daily: mildly up
Swing now also turned up, and MTFS is in better looking U-shape pattern. Such pattern's validity depends on the depth of the green line which is only mildly positive. This means the upward potential is relatively limited in the short term (2125?). It is only if/once 2125 is passed that NDX will likely return to the overall bullish trend and reach Fib targets, with 2250 being very significant (strong MM resistance as well).

Weekly: trading range
NDX is firmly back in its channel. However current movements are too fast for this time frame.