Tuesday, February 26, 2008

Market Snapshot for NDX - Feb 26th 2008

cf. RUT post below

Market Snapshot for SPY - Feb 26th 2008

cf. RUT post below.

Market Outlook RUT for Feb 26th '08

Dominant TF: 60mins and weekly charts
Swings: UP-UP-DN
Cycles: not quite reliable (good turning points but low signal-to-noise ratio)
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

RUT report 3 trading days ago was right. RUT is indeed aiming at pivot level while remaining in the same trading range overall. Absolute bliss for non directional traders...
This report is updated on the 60mins time frame, but remains more or less the same on longer horizons.

60mins: pivot level now in sight
RUT will most probably test pivot level just short of 720, yet there is nothing really new in this market so i would venture into a longer term outlook for now.
Entropy is still pretty weak, and there's even a chance of stalling around 715 in the short term.

Daily: same trading range
Significance level remains fairly low at this time frame. MTFS remains flat and Entropy is not helping us either. There is no reason to be particularly bullish right now, as RUT could still go either way. For the time being, with swings being UP-UP-DN, the bias is obviously UP.
In absence of a market shock (exogenous factor impacting the market) it could take at least another few days for a new pattern to materialise. Until then RUT should fluctuate within a possible broader range: [680-730]

Weekly: congestion - possible pause in current 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.
625 was a strong support (688 in lower dominant time frame), 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, either after a further drop or just through the passage of time.