Friday, January 25, 2008

Market Snapshot for RUT - Jan 25th 2008

cf NDX post below.

Market Snapshot for SPY - Jan 25th 2008

cf. NDX post below.

Market Outlook NDX for Jan 25th '08

Dominant TF: Daily
Swings: UP-DN-DN
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): congestion to low
Position (60mins): flat to long (shorter intraday time frames), selling 2150 call spreads would be a very conservative bet, otherwise 2000 is pretty safe too

We were short last time on NDX (Jan 18th). Target was obviously 1750, but behaviour on support level was not easily predictable. 1750 has been penetrated deep but hasn't broken, making current bounce even stronger.

60mins: check resistance levels
Nice bounce from recent lows, NDX is not out of the woods, but could well reach PR1 (1865) to intermediate MM level (~1880). There is no indication from MTFS or Entropy that it would go much higher right now, but momentum can always pick up as we go along.

Daily: support confirmed but...
Some may say the worst is over, let's just go long. Hmmm, there are trading opportunities at shorter time frames indeed, but on the daily chart, while we certainly have Entropy coming up, MTFS is not showing the best looking line crossover. This is not the easiest scenario, but i would anticipate congestion once the current up move (60mins chart) is over. Bar is still only yellow, and new MM support level is now much lower (cyan dots turned white)

Weekly: definite down bias still
No panic, but 1750 could be tested again, or at least congestion in the lower part of the trading range may happen. One can notice that 2000 never broke as a strong resistance level even if it appeared broken during 4th quarter 2007, and on the contrary, support level dropped!
The current snapshot has been changed to show more MM levels (ugly, but explicit)