Thursday, February 28, 2008

Market Snapshot for RUT - Feb 28th 2008

cf. NDX post below

Market Snapshot for SPY - Feb 28th 2008

cf. NDX post below

Market Outlook NDX for Feb 28th '08

Dominant TF: 60mins, then Daily
Swings: UP-UP-DN
Market Direction (Daily): directionless
Position (60mins): same March condor until expiration. April position should be entered next week.

On last report 3 trading days ago, I mentioned that the rise would have little momemtum, and we are again hovering around the top of the trading range (~1800s). What to expect now?

60mins: losing steam but upward bias is still there
MTFS shows lines with positive gradients, but one can see that the white line is losing momemtum before reaching overbought level. The green line will probably catch up but in the meantime, this is generally indicative of congestion, mild retracement even if the background trend remains somewhat up. Entropy confirms that scenario.
NDX will probably try and reach pivot level again, and who knows... a breakout situation may finally bring new players and take NDX to higher levels, at least at this time frame, i.e. in the short term.

Daily: nothing new really...
No change from last post: MTFS and Entropy do still point towards a congestion at this low level. Obviously, a market pattern may be forming (we've had higher lows and lower highs) so one will watch for a possible breakout over the next few days. One cannot discard an upward breakout, since 1750 is so strong.

Weekly: again decidedly bearish for now, but 1750 support still looks like it could hold
No change from last post:
Indeed no reason to be very optimistic right now, but one shall always check MM and Fib levels carefully, and 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.