Sunday, April 20, 2008

Market Snapshot ER2 (RUT) for Apr 21st '08

cf. NDX post below for guidance.

Market Snapshot for SPY - Apr 21st 2008

cf. NDX post below for guidance.

Market Outlook NDX for Apr 21st '08

Dominant TF: 60mins. Some may want to shift the set of time frames down to (30mn, 60mn, 240mn).
Swings: UP-UP-DN
Market Direction (Daily): up overall, but volatile still.
Cycles: very good fit, but high noise level
Position (60mins): up

I anticipated a bounce but to be honest it was not possible to forecast it would carry over to a good looking recovery. Those who switched to a faster set of time frames certainly didn't get caught here.

60mins: overbought, but where is the resistance level?
MM levels have now moved twice upward since last post. MTFS and Entropy are also looking much better. We will look for a possible resistance level on currentl levels, so NDX could well try and consolidate a further rise on MM pivot level.

Daily: upper bias remaining after strong rise.
We seem to have a Fib pattern which could take NDX higher. We have to recognise that the MTFS pattern may fail, but at the same time significance level was lower and is now picking up strongly.
No rejoicing though as this is not th emost bullish situation so we'll watch Fib targets carefully, the first one being 1910, i.e. close to current levels.
In the medium term, NDX may well reach the next level around the psychological level of 2000.
We're not there yet.

Weekly: patience...
In addition to lower time frames, it is now visible that NDX will try and aim at 2000 (MM + Fib). However, unless the MTFS pattern evolves dramatically, there is very little chance that we switch back to bull mode, i.e. a pullback is almost certain either before or after hitting 2000.
This is an important clue that call spreads above 2000 is quite safe.
As said earlier, the 2000 level will be key to market direction for the rest of the year.