Wednesday, April 30, 2008

Market Snapshot for SPY - Apr 30th 2008

cf. ER2 post below for guidance

Market Snapshot for NDX - Apr 30th 2008

cf. ER2 post below for guidance

Market Outlook ER2 (RUT) for Apr 30th '08

Dominant TF: weekly chart, 60mins had to be retuned
Swings: DN-UP-UP (weekly swing hesitant)
Cycles: good fit but high noise level
Market Direction: upper bias
Position (60mins): undecisive.
Options (RUT):
Short May780 Calls, Long May790 Calls,
Long May550 Puts, Short May560 Puts

RUT (ER2) has tried to breakout on the up side as expected, but has shown little energy and is now trying to find some support to possibly go higher later on. A pause or retracement seems inevitable even if we cannot pinpoint the exact timing right now. Shorter time frames may help.

We will also follow EURUSD and QM closely. We spotted the breakout as it happened, and still believe 1.5625 to be a key level going forward.

60mins: will MM pivot level hold?
MTFS is not giving us a clear pattern, and Entropy is weak and relatively directionless. In absence of any significant economic news (GDP?), no major move to expect over the next few bars.

Daily: same upper bias, but a retracement will be necessary.
We are again at range highs, and while MTFS looks positive, the white line is close to overbought level with other lines lagging behind. If we add a high entropy level (EntBin = 4), a retracement should occur shortly. This means that we should not pass range highs in the short term.

Weekly: congestion
The worst certainly seems over, and the upper bias is still there, so ER2 is trying to pass Fib PR1 yet with some difficulty. To be on the safe side though, we will wait for the MTFS pattern to complete now (line crossover). Until then we have to consider the remaining downward pressure which will slowly dissipate.
ER2 can also possibly reach the very strong 750 resistance level before retracing/congesting but the most likely scenario for the time being is the same [690-730] trading range. Levels above 750 are quite unlikely in the next couple of months.