Tuesday, January 15, 2008

Market Snapshot for RUT - Jan 15th 2008

Market Snapshot for SPY - Jan 15th 2008

Regrettably, from now on, only one chart will be commented each day on this blog. I shall alternate between SPY, RUT and NDX, and the other 2 snapshots will be posted uncommented. Fortunately, those 3 symbols are fairly correlated.
The forthcoming release of the TS toolset, the few additions still in the pipeline the training and support involved etc etc do not allow me to offer more for free every single day of the week. I certainly enjoy helping traders, but some bombard me with beginners' questions, some rip the toolset apart to only keep the free indicators in it... so i end up looking like a fool...

I shall think of another way of providing this service to those who really appreciate it.

Regards to all, and happy trading...

Market Outlook NDX for Jan 15th '08

Dominant TF: Daily
Swings: UP-DN-DN (from DN-DN-DN)
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): volatile with a down bias
Position (60mins):
Short: would have exited already
Flat: wise
Long: short intraday time frames only

As mentioned over the last few days, NDX found a support on MM stall level (~1904), and is fairly contained in a trading range. Significance level is dropping fast on the 60mins chart, so movements in the trading range must be analysed in lower time frames (15mins chart looks great)

60mins: movement in trading range - upper bias in the short term
the upper bias in MTFS and absence of energy in Entropy do not make this short term recovery convincing at all. Short intraday time frames look a little better, but recovery could very well fade fast.

Daily: congestion to erosion
MTFS is in congestion with lower bias mode, so the pattern must complete in oversold territory now without necessarily going much lower. Entropy is close to a bottom though, and since the Fib pattern seems to have found its target earlier on, one may have a good recovery once negative pressure is fully exhausted. Volatility has always been a wild card with NDX so it may take anything up to a week to materialise.

Weekly: definite down bias, check Fib and MM levels
As mentioned recently, bull mode is over and we are now in correction mode (not bear mode yet though), and one can notice that the Swing indicator has been relatively hesitant at this level. I recommend taking cues from MM and Fib levels at this stage. The Swing indicator is way too steep to be stable (~ 3 times the natural angle of repose), so we know we have to wait for volatility to calm down a bit.

Note: this proprietary Swing algorithm differs from conventional algorithms which always toggle in lower time frames first. We are in this instance probably close to a key level at this time frame.