Friday, March 21, 2008

Market Snapshot for EURUSD - Mar 24th 2008

A EURUSD chart is now posted once or twice a week first to observe that the same TS environment can also be applied to forex, but also to see possible change in dynamics in quasi realtime for this forex pair.

Market Snapshot for SPY - Mar 24th 2008

cf. RUT post below for guidance

Market Snapshot for NDX - Mar 24th 2008

cf. RUT post below for guidance

Market Outlook RUT for Mar 24th '08

Dominant TF: weekly and 60mins charts
Swings: UP-DN-DN
Cycles: looks good but still unreliable (low signal/noise ratio)
Market Direction: same trading range. 688 is key level.
Position (60mins): long but target in sight, congestion otherwise.
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts

The outlook given 3 trading days ago was correct. Support was indeed found near range lows. The Fed cut then pushed RUT higher but only back to range highs. What can we now expect?

60mins: upper bias
RUT is trying to engage in higher gear now but doesn't show much energy just yet. MTFS and Entropy are pointing slightly higher but it will take more to pass the 688 resistance level, either exogenous (economic news) or endogenous (breakout).

Daily: bounce on MM stall level
The MM stall level is indeed half-way between the white dots and the strong MM support level (cyan dots), and seems to have halted the fall. The MTFS white line divergence and Entropy bottoming out a couple of days ago confirm the situation. However, the other 2 MTFS lines are still very low indicating a possible bell shape pattern going forward, i.e. a failed recovery pattern again. Swing is also down still, so going long is reserved to lower time frames.

Weekly: congestion to down bias
A bounce around 655 was very much in the cards, yet there is still no change in underlying dynamics. We obviously have a white line above the brown line and a very Entropy (EntBin = -4) to mitigate a bearish scenario, so a bounce is quite possible if not likely, indicating that the completion of the MTFS pattern may happen through time rather than with a further fall. Again as a reminder, negative pressure can dissipate slowly through the passage of time particularly on strong support levels, here Fib + MM stall level. We just have to be patient, and if bears come back to the charge, be prepared to see 625 being tested.