Market Outlook NDX for Oct 25th '07

Dominant TF: Daily and 60mins (10 and 15mins too)
Swings: UP-UP-UP
Market direction: mildly up.

Volatility is very high, possibly confirming our earlier diagnostic that we may be close to a key level. The market is so overbought that a correction would be healthy.

60mins: congestion to mildly up.
Major swings yesterday to return to more or less the same pivot level (2188). The market is quite resilient, for many reasons (exchange rate, world economic growth, bond market, real estate etc). Yet this does not appear to be stable over the medium term.
It is too early to project Fib expansion patterns, but we would like to make some sense of the current wide range congestion. There is still an upward bias, so there should be again some excursion above 2188, but we'll have to watch lower time frames for guidance, where a resistance level at 2219 is given.

Daily: Up, hopefully at a slower pace.
NDX is overbought, and each retracement so far has failed. Entropy is however declining, so one may just try and reach 2250 (or prior stall level around current highs). MTFS green line holding well, so even if a retracement is expected it is nowehere visible in our indicators right now.

Weekly: congestion to mildly UP - Low significance level.
Entropy is looking good, but MTFS has difficulty adapting to such a strong run (U-shape pattern is not closing). We therefore have 'waves in overbought zone' which may justify looking at a higher time frame.

Market Outlook RUT for Oct 24th '07

Dominant TF: Daily (also weekly to an extent)

Swings: UP-DN-DN

Market direction: congestion to mildly down.

60mins: mildly up.

Lower time frames indicate still some slight upward bias to 820, but RUT could also reach 828(stronger MM + Fib). MTFS is not looking too bad but Entropy has peaked already. Significance level is now much lower.

Daily: Congestion to down.

Despite yesterday's up day, and contrary to lower time frames, the daily chart still points downward, and this is the dominant time frame. One may have some congestion since we have Fib + MM level at 812. Caution must be exercised, at least until a new Fib formation appears clearly. In such case, one may see a target more clearly (781?? or 862??).

Weekly: mildly UP

Entropy is looking good, but MTFS indicates continuation of this situation of congestion with an upward bias.

Market Outlook SPY for Oct 24th '07

Dominant TF: Daily
Swings: UP-DN-DN
Market direction: congestion.

60mins: mildly up.
Lower time frames indicate some slight upward bias, and SPY could well reach Fib PR1 or even 153 (MM+ Fib). MTFS is not looking too bad but Entropy could peak shortly. Significance level is lower.

Daily: Congestion to down.
Despite yesterday's up day, and contrary to lower time frames, the daily chart still points downward, and this is the dominant time frame. One may have some congestion since we have Fib + MM level at 150. Caution must be exercised, at least until a new Fib formation appears clearly.

Weekly: mildly UP - Very low significance level.
Entropy is looking good, but MTFS indicates continuation of this situation of congestion. The Swing indicator is trying to turn down, so one may just be close to a key level.

Market Outlook NDX for Oct 24th '07

Dominant TF: Daily and 60mins

Swings: UP-UP-UP

Market direction: mildly up.

60mins: up.

The method cannot detect sudden shocks to the system, but can adapt to them and evaluate subsequent directions and levels. In this case, after an 'exuberant' open, NDX broke pivot level and went up to 2188, but to our surprise, that level also broke fairly easily. MTFS and Entropy are bullish, so the next resistance level may just be 2250. We'll have to watch for the 'stall' level if prices move to fast (~2134).No visible Fib pattern to provide any other scenario at the moment.

Daily: Up, hopefully at a slower pace.

Amazing bounce on 2125. NDX is overbought, and each retracement so far has failed. Entropy is however declining, so one may just try and reach 2250 (or prior stall level).

Weekly: mildly UP - Low significance level.

Entropy is looking good, but MTFS has difficulty adapting to such a strong run. We therefore have 'waves in overbought zone' which may justify looking at a higher time frame.

Market Outlook RUT for Oct 23rd '07

Dominant TF: 60 mins & Daily (15mins time frames too).

Swings: DN-DN-UP

Market direction: congestion to down initially.

Detailed chart interpretation: Strong correlation with SPY therefore market interpretation is also very similar hence no need to virtually copy/paste whole commentary (see post below: http://marketsnapshot.blogspot.com/2007/10/market-outlook-spy-for-oct-23rd-07.html )

Support level has been found around 794 for now, but 781 is probably stronger.

Market Outlook SPY for Oct 23rd '07

Dominant TF: Daily and 60mins
Swings: DN-DN-UP
Market direction: Congestion to Down. Support should be found soon.

60mins: Congestion to down.
There is no indication that yesterday's recovery will take SPY much higher in the short term. A congestion is likely.MTFS had an early crossover which is generally not indicative of a strong recovery, but the lines gradients are now looking better. We shall however watch how negative entropy is dissipating over the next few bars.

Daily: Profit taking until support is found (150 or lower...)
The 150 support level proved strong enough to stop the fall, but MTFS looks bearish, and bars are also decidedly red. The correction is maybe not over yet, and we have to possibly watch lower Fib retracement levels.

Weekly: Congestion, but caution: significance level is ridiculously low.
For the time being, indicators still point very slightly upward, but the red bar is more reactive and negates any remaining positive momentum in the short term. We can see some divergence in AdStoK and a very low significance level at this time frame (divergence?), so this is at best only a background information at the moment, and one should certainly focus on lower time frames (60mins and daily).

Market Outlook NDX for Oct 23rd '07

Dominant TF: Daily and 60mins

Swings: UP-UP-UP

Market direction: Congestion to mildly up.

60mins: Congestion. Mild updward bias at first.

Good recovery after hitting the 2125 support level very strongly. The level held and prices bounced to pivot level (MM + Fib). MTFS is undecisive, and Entropy is recovery, indicating an upward bias, however possibly bumping on pivot level.It is therefore not easy to see price behaviour going forward, and lower time frames do not provide more information at present. Bar colours have not even turned blue during this recovery.

Daily: Congestion to down.

A red bar, yet a very bullish bar, other indicators still eroding: we are in presence of indetermination, so we hae to be very careful and watch salient levels to gauge for future direction, particularly on the 60 mins chart. If the 2088 level fails to be broken, bulls may just give up...

Weekly: Congestion to mildly UP - Low significance level.

Current congestion in lower time frames can slow down or stall the upward bias we still have.Note that significance level on this time frame is falling, due to indicator divergence.

Market Outlook RUT for Oct 22nd '07

Dominant TF: 60 mins & Daily (15mins time frames too).
Swings: DN-DN-DN
Market direction: congestion to down initially. No panic just yet, as a support will probably be found soon.

It is relatively difficult to comment this market correctly as one could be tempted to join the new bear wave and announce the apocalypse. The truth is that this correction was expected and probably also healthy. There is no indication that it will go much lower as the daily chart may find a support soon, hence bounce and stay relatively bullish overall.

Detailed chart interpretation: Strong correlation with SPY so, interpretation also very similar hence no need to virtually copy/paste whole commentary (see post below: http://marketsnapshot.blogspot.com/2007/10/market-outlook-spy-for-oct-22nd-07.html)

Support level to be found around 794 or 781. Very negative bias at first.

Market Outlook SPY for Oct 22nd '07

Dominant TF: Daily and 60mins

Swings: DN-DN-UP

Market direction: Congestion to Down. Support should be found soon.

It is relatively difficult to comment this market correctly as one could be tempted to join the new bear wave and announce the apocalypse. The truth is that this correction was expected and probably also healthy. There is no indication that it will go much lower as the daily chart may find a support soon, hence bounce and stay relatively bullish overall.

60mins: Congestion to down.

Although we saw it coming, we certainly got a little caught by this draft. Low time frames are still very bearish indicating it will be difficult to gauge whether 150 where SPY closed will hold. MTFS does not give us the indication of a bottom in the short tern, so it is indeed very possible to see a lower open even if 150 holds overall.

Daily: Profit taking until support is found (150 or lower...)

Profit taking accelerated and we admittedly underestimated the impact of the high volatility environment we've had in the last few months.At this point, 150 should hold, but we'll have to watch lower Fib levels too. MTFS has its green line with a steper gradient indicating the correction could indeed gather momentum. One should however not jump into conclusions: this is still nothing more than a normal correction.

Weekly: Congestion to mildly up, but caution: significance level is ridiculously low.

The Swing indicator is up, but the key swing price level is still close at this time frame, so the indicator could turn around again. For the time being, everything still points (at least mildly) upward. We can however see some divergence in AdStoK and a very low significance level at this time frame (divergence?), so this is at best only a background information at the moment, and one should certainly focus on lower time frames (60mins and daily).

Market Outlook NDX for Oct 22nd '07

Dominant TF: Daily and low time frames (15mins)Swings: DN-DN-UPMarket direction: Down but until support is found.
We have warned of a pending correction since last week, even if we could not pinpoint exactly when it would happen. The market entered a clearly defined [2156-2188] trading range, bumped on the high end (so called 'stall' level identified on Oct 11th) then reversed sharply.
60mins: Down.Despite we saw it coming, the strength of the correction still suprised us. Having said that is has been commensurate with the exuberance of the market in the last few months.The bottom has not been found yet. The 2125 MM level will be tested immediately, but support will have to be found lower, possibly 2117 or ... 2090!

Daily: Congestion to down.

Despite Friday's correction, we still have a blue bar, and MTFS and Entropy while weaker do not indicate a market crash going forward. If the 2125 level is broken, we'll watch the next Fib retracement levels with more attention. A market correction is obviously possible, yet one should not jump to conclusions as we do not have signs of a reversal situation. It is only a high-volatility yet normal profit taking pattern, at least for now.

Weekly: Congestion to mildly UP - Low significance level.

Current congestion in lower time frames can slow down or stall the upward bias we still have.Note that significance level on this time frame is falling, due to indicator divergence.

Market Outlook RUT for Oct 19th '07

Dominant TF: 60 mins & Daily (15mins time frames too). Weekly influence declining.
Swings: UP-DN-UP
Market direction: congestion to down initially. Overall trend is still up, but support must be found first.

60mins: Congestion to mildly down, but probably at a slow pace.
We've had a bit of a bounce, which could technically reach PR1 close to 830, but MTFS (AdStoK) is giving a pattern that is more indicative of a trading range so it may not get there any time soon.
On the down side, the same support levels are valid: 820 then 813 later on.

Daily: Down, til support is found.
No new information:
MTFS (formerly AdStoK) is weaker, lines have crossed, bars are red, all indicating a definite slowdown. We could certainly look for support between 808 (Fib) and 812 (MM) in the next few days.
The high volatility environment seems to accelerate movements in either direction, however Entropy is still fairly high so this down move should be fairly controlled. No reason just yet to believe it will go lower than pivot level.

Weekly: mildly up until...
Significance level is lower, but the overall "U shape" MTFS pattern is still there, and strong MM resistance remains 875.
One must check significance level (divergence) which could invalidate the pattern. Lower time frames will soon provide us with clues (support level and return to the dominant trend).

Market Outlook SPY for Oct 19th '07

Dominant TF: Daily and 60mins Swings: UP-DN-UP Market direction: Congestion. Upward bias still valid overall despite some profit taking.

60mins: Congestion to mildly down. Erosion of SPY should continue. The 153.13 pivot level was tested, and will be tested again. Congestion or a shallow bounce on 153 is a likely scenario at first.

Daily: Profit taking until support is found (150??) AdStoK is so overbought with a white line declining, bars turning red and Entropy losing steam: SPY can only go lower. This is however not indicative of any strong retracement in the near term, so profit taking should continue at a slow pace, possibly to the 150 MM + Fib level.

Weekly: mildly UP, but caution: significance level is ridiculously low. The Swing indicator is up, but the key swing price level is still close at this time frame, so the indicator could turn around again. For the time being, everything points upward. We can however see some divergence in AdStoK and a very low significance level at this time frame (divergence?), so this is at best only a background information at the moment, and one should certainly focus on lower time frames (60mins and daily).

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Here also is a commented audio soundtrack (8m25s) to complement this SPY chart. The purpose is to teach traders how simple it can be to read charts using this TradeStation technique. Please note that these indicators can be used unchanged on various symbols and time frames.
The technique was designed to remain as simple as possible so that decision making remains quick and as unambiguous as possible. It must also be noted that all indicators feed an API allowing developers to build their own rule set to contribute to even easier decision making.