Monday, January 14, 2008

Market Outlook RUT for Jan 14th '08


Dominant TF: Daily
Swings: DN-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction: recovery needs confirmation
Position:
Short: exited
Flat: wise
Long: follow lower time frames

One can note significance level is declining on the 60mins chart, indicating lower time frames are slowly taking over.

60mins: congestion to lower until support level is confirmed
It seems RUT (like SPY) will remain congested with a lower bias within the [688-719] range, and probably in the lower part of that range. MTFS line gradients and a positive Entropy indicate no substantial fall.

Daily: congestion
As mentioned last time, one must wait for Entropy to bottom and this should happen soon. In the meantime, RUT should remain congested in the high 600s, low 700s. The MTFS white line indicates there should be an attempt to find a support, not necessarily back to 688, but maybe around 704.

Weekly: congestion to down
RUT is definitely losing ground and a stronger base would be needed to reassure investors. Testing 680s or lower is quite possible.