Wednesday, February 13, 2008

Market Snapshot for RUT - Feb 13th 2008

cf NDX post below

Market Snapshot for SPY - Feb 13th 2008

cf. NDX post below

Market Outlook NDX for Feb 13th '08

Dominant TF: 60mins
Swings: UP-DN-DN
Market Direction (Daily): congestion with upper bias
Position (60mins): if long for a few days, profits would have been taken yesterday. Most would now stay flat, but also a few points to grab on the way down.
Keeping a few call spreads is always a good idea. The more adventurous will place March put spreads in the mid 1600s.

60mins: end of up retracement
Patterns are pretty clear at this level. NDX retraced up to Fib PR2 (61.8%) and also hit a MM level. The dominant trend being down in higher time frames, this was a quite logical profit target. Now, quite a few would be short again, however the MTFS green line is a little higher, thus dampening the tension on the white line. Entropy and MTFS lines show a modest downward bias, hence one can see a possible test of the 1750 level again (which would be a PR2 retracement again!).

Daily: support confirmed and probably tested again shortly
MTFS and Entropy do point towards a congestion at this low level. There is no indication of much negative pressure left, so buyers may come back around 1750 over the next few days. For the time being, let see how things develop when this happens.

Weekly: decidedly bearish for now, but support could hold
Indeed no reason to be optimistic right now, but one shall always check MM and Fib levels carefully, and one should not discard that there is always a chance that 1750 will hold if things slow down a little *, particularly if the white line reaches oversold level, where NDX could bounce at least momentarily.
1750 is the last defense line before we enter a bear market. Next support level would then be 1640.

* MTFS has some built-in momentum and can reach oversold level as time simply goes by, instead of only following price action. This means that a congestion at this low level may complete the pattern more or less the same way as a market fall would.