Friday, April 04, 2008

Market Snapshot for NDX - Apr 4th 2008

cf. RUT post below for guidance

Market Snapshot for SPY - Apr 4th 2008

cf. RUT post below for guidance

Market Outlook RUT for Apr 4th '08

Dominant TF: weekly and 60mins charts
Swings: DN-UP-DN
Cycles: very unreliable (low signal/noise ratio)
Market Direction: same trading range. 688 is key level.
Position (60mins): long, looking at possible profit target.
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts

The 688 pivot level indeed proved to be a key level, and with the help of portfolio adjustments on new quarter, RUT went higher, hovering on stall level.

We'll also keep an eye on EURUSD key level : 1.5625

60mins: Resistance level around the corner
This time frame is only second to the weekly one, so we won't try to read too much into the MTFS here, which is not giving us a clear pattern. Lines are high and pointing slightly up and Entropy is about flat, so we can only anticipate an upper bias to the resistance level around 719 (MM + Fib target).

Daily: looking better
As we said in previous posts, RUT has climbed back to the upper half of its trading range, same since early january.
Now despite a low significance level, MTFS looks positive at least to the upper range boundary.
Line separation would indicate profit taking or retracement going forward, so we'll watch how the MTFS pattern develops over the next few days. In the best scenario, a breakout would occur to take RUT back to 750.

Weekly: congestion to down bias
No change from last post.
The weekly chart is certainly slower and market outlook at this level only needs to be touched up a bit from the previous post.
Again we have to wait for completion of the MTFS pattern, and this could take up to 4 to 6 weeks. Entropy could still bode for a bounce, but certainly no significant recovery in sight any time soon.
In the best case scenario, RUT would climb up to Fib PR1 i.e. 724 (we do notice the low 720s being key level going forward) . The most likely scenario is that negative pressure will dissipate through the passage of time, and RUT would remain within the current range, eventually hitting the strong MM support should the financial sector unravel more bad news.