Thursday, February 14, 2008

Market Snapshot for SPY - Feb 14th 2008

cf. RUT post below

Market Snapshot for NDX - Feb 14th '08

cf RUT post below

Market Outlook RUT for Feb 14th '08

Dominant TF: 60mins, but weekly chart also.
Swings: UP-DN-DN
Cycles: unreliable yet again
Market Direction: none, lower bias still
Position (60mins): flat - delta neutral
Options: March iron condor in place
Short Mar790 Calls, Long Mar800 Calls, Long Mar600 Puts, Short Mar610 Puts

We had the turnaround given by cycle indicator on the 60mins chart. It is supposed to be a risky indicator, but can be quite useful too.

Yesterday, we have been surprised by the strength of the upward move. The Swing indicator was certainly already up, but in this overall bearish environment, i thought the resistance would hold. The long term scenario remains the same though.

60mins: good upward momentum now
Gap at open was not anticipated. Some exogenous shock (economic news) changed the dynamics slightly.
MTFS is now looking good, so recovery could technically take RUT to previous highs, and eventually all the way to 750. Entropy is not looking bad either and can sustain momentum a little further.
However the MM and Fib targets (~719) have not been passed clearly yet, so one should be careful not to be over-bullish too quickly.

Daily: same trading range
No big change at this level. We are in the same trading range, with no clear MTFS pattern and a weak Entropy. Despite this momentary reprieve, one shall watch mid to high 730s (i.e. recent highs, if hit again that it) carefully for clues on market direction.

Weekly: congestion - possible pause in down move
As mentioned last time, we are now having a pause in this bear market, with the MTFS white line hooking up. It should not be strong enough to justify a strong recovery but the white/brown lines crossover may indicate an interruption of the fall.
650 was a strong support, as 1750 was on NDX, so the market is probably showing willingness to stay above those levels. Having said that, we have to see the end of the pattern now with the green line joining the party close to oversold levels.