Thursday, December 06, 2007

Market Outlook RUT for Dec 6th '07

Dominant TF: 60mins & Daily.
Swings: DN-UP-DN (from DN-DN-DN)
Market direction: Congestion to moderately down.

OK, same story... (see SPY and NDX posts) Yesterday's bullish day came a little bit as a surprise, but the market has always surprised with sudden bouts of volatility lately. This does not really change our scenario.

60mins: Congestion.

MTFS still indicates a fairly directionless market, now with an upper bias, but this does not mean it will not now drift a little. One may note that the Swing indicator has not turned up. Like for other symbols, RUT can either remain in the same [750-767] range or jump to the one above [767-781].

Daily: congestion

Exact same situation:
As explained a couple of days ago, we have a typical failed recovery pattern, so we now have to see how it develops (double bottom, cup & handle, or ... downright fall!). For the time being, there is not enough energy for any scenario to develop fast (EntBin = 0).
Note: the cycle detection also gives us a dual frequency possibly causing a momentary congestion due to a phase offset.

Weekly: return to the trading range, but lower bias still.
We're now back in our [750-875] range, with a lower bias. One can only hope that 750 will hold...

Market Outlook SPY for Dec 6th '07

Dominant TF: 60mins & Daily
Swings: UP-UP-UP (from DN-UP-UP)
Market direction: congestion - behaviour on 150 is key.

I warned yesterday of some difficulty in reading the current market, particularly in the short term (60mins chart).

60mins: Up bias (150?) but otherwise a trading range is likely

Pattern not much clearer, indicative of a possible trading range with an upper bias. SPY will either remain in the same [147-148.5] range, or jump to the next one [148.5-150]. We unfortunately have to wait for MTFS lines to group up for the next pattern to emerge.

Daily: congestion to mildly up
Similar situation as yesterday and the day before:
With now both 60mins and daily chart with equivalent significance levels, and a MTFS pattern that is typical of a failed recovery, it is not easy to make head or tail of this market. Entropy on both charts also aim at different directions.
We now have to wait for a pattern to develop, possibly a cup & handle formation. There is however no downward pressure right now, and we have to reach 150 again soon otherwise the 'failed recovery' pattern will become a more likely possibility.

Weekly: congestion to moderately 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 downward bias. Failure to pass the 150 strong resistance level would become alarming if significance level wasn't so low.

Market Outlook NDX for Dec 6th '07

Dominant TF: 60mins
Swings: UP-UP-DN (from DN-UP-UP)
Market direction: recovery potential weakening but the recovery pattern is still there.

I admittedly got it a little wrong on the 60mins i.e. short term yesterday, but the MTFS did not help us with a clear pattern, and we knew we had some opposition with the daily chart. NDX bounced strongly on the 50% retracement level, which I did not quite anticipate. Let's see how this conflictual situation now develops.

60mins: congestion to up.

The Fib pattern could obviously develop further, but there again, MTFS is not offering us a convincing pattern. Despite the burst of energy, Entropy could peak soon. The bias is up, but until 2125 is passed, NDX should stay in the current trading range [2062-2094] or jump to the one above [2094-2125]

Daily: congestion to slightly up

Despite yesterday's up day, the recovery pattern is still weakening indicating difficulty in reaching its Fib target. Entropy may even peak soon at this low level (EntBin = 3). Again it is essential that 2125 is passed so that NDX returns to the overall bullish trend and reaches Fib targets (2140 first), with 2250 being very significant (strong MM resistance as well). Failure to pass 2125 over the next few days, while not really anticipated should be watched carefully.

Weekly: trading range - lower bias
NDX is back into its channel, and bar colour is turning to yellow. However current movements are too fast for this time frame at the moment, explaining the low significance level (53%).