Friday, February 22, 2008

Market Snapshot for RUT - Feb 22nd 2008

cf SPY post below.

Market Snapshot for NDX - Feb 22nd 2008

cf SPY post below.

Market Outlook SPY for Feb 22nd '08

Dominant TF: 60mins
Swings: DN-UP-DN
Market Direction: possible pause or price erosion in the short to medium term. Testing 125 or stall level at high 120s is more than likely.

Was right yesterday on RUT, yet volatility remains suprising sometimes. Levels do work as (strange) attractors, then price behaviour changes when hit. Obviously, it is interesting to switch to lower time frames, for those of you running the toolset.

Back to SPY: same trading range, i.e. true happiness for non directional options traders... The following commentary is here quite similar to the previous one 3 trading days ago.

60mins: no change but...
One cannot discard a breakout situation, particularly on the downside. MTFS does not exhibit any clear pattern, no (new) fib pattern, and weak Entropy... so since the overall bias is down, one will favour a return to previous lows around 132.20 (previous Fib target).

Daily: trading range but...
beware of a volatility slowdown as a breakout can happen either way in the coming days. The bias is still down so one should favour a new test of recent lows.
MTFS is not helping at the moment, nor Entropy which is remarkably weak. Significance level is low, so one may have to pay more attention the 30 and 60 mins charts to get a better perception of market dynamics.

Weekly: bottom?
Again, despite the MTFS white line hooking up slightly, and Entropy appearing to have found a bottom, both show a relatively bearish background picture. So we may have a bit of a reprieve, but the negative tone is certainly still there, at least until the pattern is complete (line crossover and/or green line in oversold territory). This could help the formation of a a cup&handle or W pattern... or go lower although still unlikely at this stage.