Wednesday, March 05, 2008

Market Snapshot for NDX - Mar 5th 2008

cf. RUT post below

Market Snapshot for SPY - Mar 5th 2008

cf. RUT post below

Market Outlook RUT for Mar 5th '08

Dominant TF: 60mins and weekly charts
Swings: UP-DN-DN (UP is unstable)
Cycles: not quite reliable (good turning points but low signal-to-noise ratio)
Market Direction: down, but at a slower pace now. Congestion possible
Position (60mins): would maybe look at exiting short soon at this time frame, to possibly re-enter later since the trend is still down
Options: March iron condor (2wks left). April in place:
Short Mar790 Calls, Long Mar800 Calls, Long Mar600 Puts, Short Mar610 Puts
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts
(again one could also be negative delta)

Advice on the 60mins chart should have made readers a little wealthier as RUT indeed went south. One shall also notice NDX testing pivot level (see last NDX post).

60mins: possible support in the short term
Strange enough, the 688 support level is not quite broken yet, even though lower time frames are already looking at 672, then 656, the latter being quite strong.
MTFS indicate a possible retracement upward, or at the very least some congestion, but no recovery in sight.
The bounce late in the day actually happened on SPY strong MM support level so one shall watch the much correlated SPY for guidance.

Daily: same trading range
Significance level remains fairly low at this time frame. MTFS and Entropy are both slightly down, so on can only hope a support will be found to stop further price erosion. Major MM levels are roughly 32 points apart (same interval for a very long time now), and one can only anticipate a return to previous lows.

Weekly: congestion to down
It seems the pause is over and the trend is resuming down. Support level can be found in the mid 650s (Fib + MM stall level), and both MTFS and Entropy point towards that level.
We can only hope that level will hold then.