Thursday, May 15, 2008

Market Snapshot for ER2 (RUT) - May 15th 2008

cf. SPY/NDX post below for guidance.

Market Snapshot for NDX - May 15th 2008

We'll keep a close look at the 2000 resistance level on NDX as it could impact the overall market. Otherwice cf. SPY post below for details.

Market Outlook SPY for May 15th '08

Dominant TF: 60mins, but also weekly and daily charts.
Swings: UP-DN-UP
Cycles: still unreliable
Market Direction (daily): congestion/retracement but upper bias still overall
Position (60mins): flat (too quite volatile at this time frame)

On last post, i again warned about volatility and poor visibility. The road to 150 is certainly going to be bumpy, so we'll stick to longer time frames or cautiously stay flat for now.

60mins: volatile
MTFS has turned around but SPY is very hesitant around current highs. On account of options and futures expiry, we'll remain cautious about short term positions. We should not have any major retracement though.

Daily: volatile, with minor upward bias.
MTFS is almost out of steam, so volatility could kick in. There is a remaining upward bias, but at the same time a minor retracement cannot be discarded. We shall remain cautious even if fluctuations should remain constrained to a fairly narrow trading range. Over the medium term, we're still looking at the 150 target. It is quite possible that intermarket resistances are playing a role at the moment (besides witching day). For instance, we'll keep an eye on NDX's behaviour around 2000.

Weekly: recovery pausing 'naturally'
No change from last post:
Despite the Swing indicator now being Up, we still have a MTFS pattern waiting to complete, and the Swing gradient a little too steep anyway. If we now also add to the picture that entropy is just about balanced, it is clear that SPY will be now looking to consolidate. That's why we'll keep a close eye at possible support levels on the daily chart.
To avoid reading too much in the chart right now, we'll also take into account that consolidations sometimes fail... In such case the Fib (expansion) pattern would start south from last pivot point just above 142. We should obviously know more about it over the next few weeks.