Market Outlook SPY for Nov 16th '07

Dominant TF: Daily, but mostly shorter intraday time frames
Swings: DN-DN-DN
Market direction: down, til next support level.

Same Nota Bene as for NDX (cf previous post).Lower intraday time frames seem to show the 145.31 level could hold but overall direction is still down.

60mins: Congestion to down - Lower significance level
Entropy and MTFS point toward a minor fall or just a congestion within the current trading range. However 150 is now the upper resistance level, so one cannot discard testing lows again.
One shall note that the 143.8 support level has turned to pivot indicating some bearish potential.

Daily: Down.
MTFS and Entropy do not look good and at this stage it is likely that the fall will continue until MTFS lines meet. We have to see whether the last bounce on PR2 around 145 will hold again.

MTFS may indicate a congestion around current lows.

Weekly: congestion to mildly down - very low significance level.
This time frame has such a low significance level it is pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a down bias. If 145 fails to hold, SPY could well also test the 137.50 level for a 3rd time...

Market Outlook NDX for Nov 16th '07

Dominant TF: Daily, but mostly 10 and 15 mins charts
Swings: DN-DN-UP
Market direction: congestion to down.

Dominant time frames are now shorter intraday time frames , so obviously only users of the TS technique can fully appreciate current dynamics. In particular, a support level at 2015.63 is in place, probably as the last defense line before 2000.

60mins: down
Significance level is declining at this time frame. The MTFS pattern only indicates a trading range with a down bias, so one can only anticipate some attempt to test 2000. Most traders feel the same, so some contrarian behaviour is possible.

Daily: Down, until support is tested again, then possible trading range.
MTFS and Entropy do look bearish and it seems clear the 2000 level will be hit. In such circumstances, the MTFS pattern has to complete, almost always in oversold territory. This indicates a potential to go lower (I mentioned a possible 1935 target yesterday), yet the 2000 level has turned from pivot to strong support, so there will certainly be some fighting on this level.

We can also note that the AutoFib indicator shows a possible recovery (target levels displayed on picture).

Weekly: congestion to mildly down - very low significance level.
We knew we had to watch for that growing divergence, and Entropy peaking. Now, there is still no overall change in direction and this profit taking is only healthy after such a bull run. We have recurrence of the 1935 level, so it could certainly retrace a little more. Speed is however difficult to anticipate in this high vol environment.Again significance level is so low one should not jump to conclusions too quickly.

Market Outlook RUT for Nov 15th '07

Dominant TF: Daily, and short intraday time frames.
Swings: UP-DN-DN
Market direction: DOWN

Back from a nice break in the African bushveld...

60mins: congestion
MTFS and Entropy both indicate a congestion with a slight upward bias, but the significance level is very low, so onw should rather look at shorter intraday time frames for trading points or follow the daily chart for direction.

Daily: DOWN.
MTFS is bearish until lines meet, and Entropy is very bearish although at -5.5 it is likely to bottom out soon. A Fib pattern may have completed at 767, and may be tested again (or close) to complete the pattern fully. There is no indication yet that it will go much lower for now. No chance of a recovery though.

Weekly: congestion to mildly down
At first sight it looks like we had the anticipated double top. However, one should not jump to conclusions just yet, as we may have a broad [750-875] trading range. The 750 level has indeed turned from pivot to strong support level. In addition, we have a PR2 Fib level around 740 and RUT has in the last 2 years always bounced back on PR2, so there is no reason it will behave differently this time.

Market Outlook SPY for Nov 15th '07

Dominant TF: Daily, but mostly shorter intraday time frames

Swings: UP-DN-DN

Market direction: congestion to down.

Back to my daily snapshots after a great time in the African bushveld...

60mins: Congestion to down - Lower significance level

Entropy and MTFS point toward a minor fall or just a congestion within the current trading range. However 150 is now the upper resistance level, so one cannot discard testing lows again.

Daily: Down.

MTFS and Entropy do not look good and at this stage it is likely that the fall will continue until MTFS lines meet. We have to see whether the last bounce on PR2 around 145 will hold again.

Weekly: congestion to mildly down - very low significance level.

This time frame has such a low significance level it is pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a down bias. If 145 fails to hold, SPY could well test the 137.50 level for a 3rd time...

Market Outlook NDX for Nov 15th '07

Dominant TF: 60mins, Daily, but mostly 15 and 30 mins charts
Swings: UP-DN-UP
Market direction: congestion to down.

Back to my daily snapshots after a great time in the African bushveld...

60mins: down
The down draft is not over yet, but Entropy and MTFS do not point toward a fall but rather to a test of 2000 again. Significance level at 0.69 is alright, but one should certainly take cues from shorter time frames for trading points.

Daily: Down.
MTFS and Entropy do not look good... One should pay attention to Fib and MM levels. MM target is 2000, then 1935 is a combined MM + Fib. Let's first see whether 2000 holds again...

Weekly: congestion to mildly down - very low significance level.
We knew we had to watch for that growing divergence, and Entropy peaking. Now, there is still no overall change in direction and this profit taking is only healthy after such a bull run. We have recurrence of the 1935 level, so it could certainly retrace a little more. Speed is however difficult to anticipate in this high vol environment.

Back to Nature

Taking a break until Nov 15th...

Delta negative options traders as well as short sellers should be happy. Just check MM and Fib levels for the time being for a possible recovery point. Users of this technique will also follow evolution of MTFS until lines meets as well as peak/troughs in Entropy. This market configuration should not be too difficult to analyse.

See you next week :)

Market Outlook RUT for Nov 9th '07

Market Outlook SPY for Nov 9th '07

Market Outlook NDX for Nov 9th '07

Market Outlook RUT for Nov 8th '07

Dominant TF: 60mins & Daily.

Swings: DN-DN-UP

Market direction: DOWN

60mins: DOWN.

What an interesting day... RUT was not indied anticipated to go higher, but i thought the trading range would hold. 781 was a possible target if 791 had to break, but 775 seems to now indicate a lower support still. MTFS is bearish, but Entropy is only just picking up steam...

Daily: DOWN.

Yesterday's close below 781 may indicate RUT going lower, to much lower. A return to 750 is possible, with a first target around 767. One could possibly have a reprieve if RUT closes above 781 today, but MTFS and Entropy are quite bearish so it is unlikely.

Weekly: congestion to mildly down

Entropy and MTFS indicate continuation of this situation of congestion with a downward bias. We can note that we are again very close to a key level at this time frame with the Swing indicator oscillating frequently.Same as SPY, divergence and a double top are to watched carefully now. The MTFS shape is not of a double top, so a broad trading range (roughly [750-875] is a more likely scenario for the time being.

Market Outlook SPY for Nov 8th '07

Dominant TF: 60mins, Daily and low intraday time frames

Swings: DN-DN-UP

Market direction: looking for support...

60mins: Down, support to be found toward next MM+ Fib level.

Always difficult to assess movements in both a very high volatility environment and so close to key levels. Lower time frames certainly helped a lot here.150 despite being strong broke, was tested again as a resistance, which is always an open door for bear who sold heavily in the last part of the day.We have 2 bearish Fib patterns both pointing for a first support level around 146. MTFS and Entropy certainly confirm this.

Daily: down.

Yesterday's scenario did not quite anticipate 150 to be broken even if we had negative entropy and a MTFS that didn't look too good. MTFS is certainly a lot more bearish now, so support can be found somewhat lower. Fib levels to be checked carefully (both retracement and expansion levels). Entropy is not dramatically low, so we're not in any sort of crash or meltdown... i.e. no panic just yet.

Weekly: probable congestion - Very low significance level, due to MTFS divergence.

We've been warning about MTFS divergence and a possible double-top. The MTFS pattern is however not that of a double top as such, so one should not jump to conclusions just yet, but certainly remain cautious.

Market Outlook NDX for Nov 8th '07

Dominant TF: Daily

Swings: DN-UP-UP

Market direction: congestion - larger trading range on account of volatility

60mins: Congestion to down - Movements exaggerated by market volatility

I admittedly got it wrong here. I expected a congestion or a trading range [2188 - 2220] but certainly not the lower boundary to be broken so decisively. The Significance levels had dropped over the last few days, and lower time frames provided a clearer picture, which cannot be expressed on a daily snapshot.The bias is now down, but despite the high volatility, one should not expect any sort of fall or meltdown.NDX should find some support around 2165... or 2125!

Daily: Congestion.

This down day is no more than normal congestion ahead of the strong 2250 resistance. The expected slowdown is now there, but we still do not have conditions for a major retracement right now. Having said that a support must be found lower.

Weekly: congestion to mildly UP - Low significance level.

Entropy is still looking very good, but MTFS has difficulty adapting to such a strong run (U-shape pattern is not closing). It seems we're entering a period of congestion, at least compared to the seemingly unstoppable bull run we've had. Looking at MTFS, no retracement in sight just yet, but we have to watch how this divergence develops. A peak in Entropy will also be an alert of a change in dynamics.