Friday, December 14, 2007

Market Outlook RUT for Dec 14th '07

Dominant TF: Daily, 60mins as well as lower time frames
Swings: DN-UP-DN (from DN-UP-DN)
Market Direction: congestion with a lower bias

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
RUT seems to have found support around the high 750s, which corresponds to a weak Fib level and a MM stall level (not quite justified). RUT could therefore drift lower to 750.
At the same time since MTFS is only moderately bearish, RUT may just remain congested in more or less the same trading range.

daily: congestion.
MTFS and Entropy are again weakening a bit, so we may have some congestion ahead. Again, the MTFS recovery pattern looks more and more like the 'failed recovery' pattern mentioned about a week ago. Support will be found around 757 (Fib) or right down to 750. Since there is no clear direction in the short term, one may take yesterday's low (759.20) as the stronger base we need to go higher.

weekly: Directionless with a lower bias 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 14th '07

Dominant TF: Daily and low intraday time frames
Swing: DN-UP-DN (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: Congestion within the same trading range.
We've had about the same situation with a recovery in the last couple of hours. 147 was not clearly hit though.
MTFS lines still have a slight bearish outlook, but it seems like SPY could be directionless.
The trading range should remain [147-150].

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 within a [147-153] trading range..

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 14th '07

Dominant TF: 60mins (and lower)
Swings: DN-UP-UP (from DN-UP-UP)
Cycles: long cycle pointing down - low significance level
Market Direction:
Congestion with a lower bias at first.
Has support been found (2062?) ??

Again, and sorry to repeat myself: this is a perfect environment for intraday traders. All lower time frames have a significance level higher than these ones. In addition, the environment is about the same as the day before.

60mins: congestion to lower bias.
Yesterday's commentary was again quite valid.
A support may have been found, yet there is still a bit of negative bias in MTFS and Entropy. The half-way MM level which looks like a support level right now is the well known 'stall' level. The fall was however not quite fast enough to justify it, so it is likely that a stronger base will be found lower (2062?). The uncertainty comes more from this 'drift' situation showing a lack of internal dynamics.

Daily: congestion at first
MTFS and Entropy suggest a slowdown, so some congestion ahead is likely. A second red bar may suggest we need a stronger support level to go higher.

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