Tuesday, March 04, 2008

Market Snapshot for RUT - Mar 4th 2008

cf. NDX post below

Market Snapshot for SPY - Mar 4th 2008

cf. NDX post below

Market Outlook NDX for Mar 4th '08

Dominant TF: 60mins, then Daily
Swings: DN-DN-DN
Market Direction (Daily): down, unless support is found soon...
Position (60mins): same March condor until expiration. April position should be entered next week.

From top to bottom of the trading range and even lower in a matter of a few days... We knew a breakout would equate to some acceleration which indeed occured on support level at 1750 being penetrated. The bias is assuredly quite bearish, and we're now looking for a bottom...

60mins: bearish but possible pause
MTFS is indeed looking negative, however the white line is flatter and so a congestion or even profit taking from short-sellers may stop the fall for a while. It is a common scenario to see a previous support level tested as a resistance before going lower again. In such case, on could even see 1750 being hit again. The mood is however quite bearish overall.

Daily: will a support be found?
There was a breakout point at 1750, and NDX is now trying to test previous lows. There is a support level at 1688 on the 60mins chart, very very close to Jan 23rd lows, which seems to be the last possible support for the current trading range.
MTFS is not showing any recovery right now, but Entropy does not show much energy on the down side either so one could still hope for mere congestion at this low level, at least for now.

Weekly: again decidedly bearish for now, but 1750 support while penetrated cannot be regarded as broken just yet.
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.