Monday, February 11, 2008

Market Snapshot for NDX - Feb 11th '08

cf RUT post below

Market Snapshot for SPY - Feb 11th 2008

Similar situation as RUT (posted below)

Market Outlook RUT for Feb 11th '08

Dominant TF: weekly chart taking over, otherwise 30mins.
Swings: DN-DN-DN
Cycles: dominant cycle 126bars pointing down, possible turnaround in about 10 to 15 bars (60mins chart), but confirmation will be needed as it is always the least reliable indicator
Market Direction: none, lower bias still
Position (60mins): flat - delta neutral
Options (since Jan 9th) : Short Feb790 Call, Long Feb800 Call,Long Feb650 Put, Short Feb660 Put. Put spread is relatively safe.

60mins: lower bias
RUT does not show any recovery potential right now. MTFS is still weak and Entropy shows no 'steam' at the moment. Significance level is pretty low, so one should take cues at lower time frames if one is looking for an entry or exit point. Otherwise the most likelt scenario remains continuation of price erosion.

Daily: congestion with lower bias
No change in scenario. There is a feeling that the worst is over for now, but certainly no optimism in the market just yet. Significance level is also dropping, so one should remain cautious.

Weekly: possible pause in down move
It's been a long time since the weekly chart was last the dominant time frame. While the trend remains down here, the MTFS line crossover may indicate a pause. We also see Entropy tempting a recovery. One should therefore not anticipate any substantial fall in the short term. However, no recovery either until the pattern is complete.