Tuesday, April 22, 2008

Market Snapshot for SPY - Apr 2nd 2008

cf. ER2 (RUT) post below for guidance.

Market Snapshot for NDX - Apr 22nd 2008

cf. ER2 (RUT) post below for guidance.

Market Outlook ER2 (RUT) for Apr 22nd '08

Dominant TF: 60mins and weekly chart
Swings: DN-UP-UP (weekly swing was previously down)
Cycles: good fit, and possibly reliable
Market Direction: up
Position (60mins): overbought, undecisive.
Options (RUT):
Short May780 Calls, Long May790 Calls,
Long May550 Puts, Short May560 Puts

April positions expired positive. Little has changed since last post (which proved correct), ER2 (RUT) is still hovering around range highs.

ER2 (RUT) is still at range highs, also at strong MM resistance level. This level may be hard to break but MTFS indicates ER2 not giving up just yet, even if Entropy is now very weak. Should the cycle indicator prove right, we would also be close to a peak. The MM range has narrowed to [688:719] about a week ago (upper half of previous range). This congestion may lead to a sudden breakout later on.

Daily: same upper bias, but not too convincing
The same last post can apply again today.
ER2 (RUT) is indeed hesitant around range highs. MTFS shows some upper bias, but Entropy is so weak there is at this point in time no indication of a range breakout. The most likely scenario is more congestion (i.e. same higher part of current range) for the time being.

Weekly: congestion to down bias
Yet the worst certainly seems over with Entropy bottoming out and the MTFS pattern about complete. The last few blue bars complete the picture.
To be on the safe side though, we will recognize that the MTFS while having an upper bias could well indicate some congestion at this low level still. We will wait for the MTFS pattern to complete now until then the downward pressure is dissipated, hence a mild negative bias still prevails. In case of a coming breakout on the upside, the 50% retracement level around 750 would be also quite strong.