Wednesday, April 02, 2008

Market Snapshot for RUT - Apr 2nd 2008

cf. SPY post below for guidance

Market Snapshot for NDX - Apr 2nd 2008

cf. SPY post below for guidance

Market Outlook SPY for Apr 2nd '08

Dominant TF: Weekly followed by 60mins.
Swings: UP-UP-DN
Cycles: not quite reliable
Market Direction: price erosion
Position: cautiously long until target

Last SPY post 3 trading ago was correct. SPY came back down to MM pivot level. Portfolio managers and financial institutions surprised us with some window-dressing yesterday (new quarter), which we will watch carefully

60mins: target in sight
We have a Fib target at 137 and a strong MM resistance at 137.50, which could be tested today. MTFS is certainly also bullish, but Entropy could peak already.
We should therefore wait to check SPY's behaviour on those target levels. Since yesterday's buying spree was only justified by technical adjustments, we need to wait for some settling down, with possible profit taking. Lower time frames may be recommended for entry/exit points.

Daily: back to upper range boundary, but caution still...
As mentioned previously, the Fed rate cut pushed RUT and SPY back to the upper half of the range. We now have a moderate bullish bias, however MTFS isn't convincing, and Entropymay be peaking already. One should therefore not jump too quickly into conclusions that we are back to a bullish trend even if the worst may be over and Swing finally turned up again. Swing is still very much hesitant.

Weekly: no significant change
Bounce on the very low EntBin (-4) could eventually push SPY up to PR1 (137 - 138). This time frame is however our dominant time frame still and the MTFS pattern is still fairly bearish. The MTFS pattern should complete through passage of time, hence congestion in the low to mid 130s is a likely scenario until the negative pressure has fully dissipated.