Thursday, December 13, 2007

Market Outlook RUT for Dec 13th '07

Dominant TF: Daily, 60mins as well as lower time frames
Swings: DN-UP-DN (from UP-UP-DN)
Market Direction: possible congestion and higher volatility ahead.

Read previous general comments on SPY and NDX.
Patterns are different, but dynamics are correlated.

60 mins: Support level may have to be found lower
The 765 support level seems to hold, but MTS definitely has a lower bias, so it may be tested again. Entropy is quite low and could well bottom out once support is confirmed.

daily: congestion to moderately up in a high volatility environment.
MTFS and Entropy are weakening a bit, so we may have some congestion ahead. Again, the MTFS recovery pattern we've seen is certainly not our favourite, so we need a stronger base to go higher.

weekly: Directionless for the time being
Same situation: range [750-875]
Swing turned back down indicating RUT is not out of the woods just yet. Current congestion still hides a down bias. A weekly up bar, and if not blue, at least yellow, would confirm a safe return to the trading range.

Market Outlook SPY for Dec 13th '07

Dominant TF: Daily and low intraday time frames
Swing: DN-UP-UP (from DN-UP-UP)
Market Direction: No change in overall direction just yet, but lower bias in the short term

Similar comments as NDX.

60mins: Support must first be found (~147?)
Like the day before, and despite the recovery late in the day a support must be clearly found first.
MTFS lines confirm some moderate bearish outlook, but this may change upon even a mild recovery after support is confirmed.
Significance level is dropping fast indicating one should follow short time frames for entries and exits, and look for direction or absence thereof on this daily chart.

Daily: up technically but congestion to mild retracement at first.
MTFS white line is showing signs of weakness and Entropy is very high (Bin=5) and close to peaking.
We're therefore probably ahead of a congestion period.

Weekly: Congestion to moderate upper bias
MTFS is unreadable because of the low significance level, hence one should not pay too much attention to the lines down gradients.
For the time being, higher highs and higher lows are bullish signs, with due caution that moves in the last 6 months have been way too fast for this time frame.

Market Outlook NDX for Dec 13th '07

Dominant TF: 60mins (and lower)
Swings: DN-UP-UP (from DN-DN-UP)
Market Direction:
Congestion with a lower bias at first.
Has support been found (2062?) ??

Again, this is a perfect environment for intraday traders, All lower time frames have a significance level higher than these ones.

60mins: high volatility - support may be found lower.
Yesterday's commentary was again quite valid.
Now it isn't clear whether support has been clearly found yet. Bars are red, lows are lower... MTFS and Entropy also point down: the bounce we had may have been short-lived at least for now.
MTFS does not look very bearish either so we may have a lower support around 2062, and then more congestion...

Daily: congestion to mildly up
MTFS and Entropy suggest a slowdown, and indeed a stronger bounce on 2062 may be needed to go higher.
One has to be careful though. It would be good to see a Up day, and at least a yellow bar to make sure NDX does not congest a little lower.

Weekly: congested to moderately up
Significance level is low, but NDX is still in its channel, Swing is UP and the weekly bar is not red.