Friday, May 09, 2008

Market Snapshot for SPY - May 9th 2008

cf. ER2 post below for guidance

Market Snapshot NDX for May 9th '08

cf. ER2 post below for guidance.

Market Outlook ER2 (RUT) for May 9th '08

Dominant TF: weekly chart, then daily. 60mins coming back
Swings: DN-UP-UP (weekly swing still hesitant)
Cycles: poor fit, but long cycle detected.
Market Direction: moderate congestion.
Position (60mins): flat to short.
Options (RUT):
Short May780 Calls, Long May790 Calls,
Long May550 Puts, Short May560 Puts

Despite the relatively high volatility on the 60mins chart, the retracement on range highs certainly didn't come as a surprise. Shorter intraday time frames give a good picture, but one should favour the dominant time frames providing they conform our trading style.

We will also follow EURUSD and QM closely.

60mins: congestion or possible continuation of erosion.
Last post was correct, and now that the MM pivot level seems penetrated, ER2 (RUT) could go slightly lower. MTFS however does not point for any serious retracement, and congestion is more likely (711 should hold). This is not the dominant time frame so we'll take cues from higher time frames unless needed.

Daily: expected retracement is here at last.
MTFS indicates a moderate retracement so we'll check for channel lows and Fib levels. For the time being, we'll aim at a support level above 700 (high 680s also possible).

Weekly: congestion, possible retracement
No major change since last post:
Fib PR1 seems to be a resistance strong enough to force ER2 to consolidate a little lower. MTFS is now close to completing its pattern. For the time being, we anticipate the some congestion range [690-730] to hold. Should support be found around 690, ER2 would spring back to 750 which would be the test level going forward.