Market Outlook SPY for Dec 4th '07

Dominant TF: 60mins & Daily
Swings: DN-UP-DN (from DN-UP-DN)
Market direction: congestion.

SPY is hovering between levels, and only has lost all positive energy, hence is drifting.

60mins: congestion to mildly down
One can only anticipate the same moderate price erosion until support is found. Despite being the dominant time frame, there isn't much to read in MTFS and Entropy except there isn't much downward pressure either.

Daily: congestion to mildly up
Similar situation as yesterday:
With now both 60mins and daily chart with equivalent significance levels, and a MTFS pattern that is typical of a failed recovery, it is not easy to make head or tail of this market. Entropy on both charts also aim at different directions.
We now have to wait for a pattern to develop, possibly a cup & handle formation. There is however no downward pressure right now, so difficult to estimate where a stronger support level will be found. At the same time, we also have to reach 150 again soon otherwise the 'failed recovery' pattern will become a more likely possibility.

Weekly: congestion - very low significance level.
This time frame has such a low significance level it is almost 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 downward bias. Failure to pass the 150 strong resistance level would become alarming if significance level wasn't so low.

Market Outlook NDX for Dec 4th '07

Dominant TF: 60mins, but 15 mins charts
Swings: DN-UP-UP (from UP-UP-DN)
Market direction: Good recovery potential but lack of energy in the short term.

Not far off yesterday, and a retracement of 1% can be be seen as moderate when it comes to NDX.

60mins: congestion to mild retracement.
Continuation of price erosion until a support is found. Despite closing at 2067, 2070 may hold, otherwise a little lower to next MM/Fib level. There is however no real downward pressure.

Daily: mildly up
Similar analysis:
The daily chart shows the clearest pattern of all 3, but unfortunately isn't the most significant time frame, so may find it difficult to reach its target in the short term. Again this pattern only has a limited upward potential because of the low green line. It is only if/once 2125 is passed that NDX will likely return to the overall bullish trend and reach Fib targets (2140 first), with 2250 being very significant (strong MM resistance as well).
Note: a pivot 5 is being detected on 2125, so failure to reach 2125 may soon translate into a down swing.

Weekly: trading range
NDX is firmly back in its channel. However current movements are too fast for this time frame at the moment, explaining the low significance level (53%).

Market Outlook NDX for Dec 3rd '07

Dominant TF: 60mins, but 15 mins charts
Swings: UP-UP-UP (from UP-UP-DN)
Market direction: Good recovery potential but lack of energy in the short term.

Spot on: congestion was indeed expected after almost the 2125 MM target.
Again the high level of volatility then allowed a significant retracement.

60mins: congestion to mild retracement.
After reaching for 2125, NDX fell right down to Fib PR1.
There is however no positive energy to have any strong bounce on this Fib level, so NDX should remain in the same [2070-2100] trading range with a mild lower bias.

Daily: mildly up
The daily chart shows the clearest pattern of all 3, but unfortunately isn't the most significant time frame, so may find it difficult to reach its target in the short term. Again this pattern only has a limited upward potential because of the low green line. It is only if/once 2125 is passed that NDX will likely return to the overall bullish trend and reach Fib targets (2140 first), with 2250 being very significant (strong MM resistance as well).

Weekly: trading range
NDX is firmly back in its channel. However current movements are too fast for this time frame at the moment, explaining the low significance level (53%).

Cycle detection - Nov 30th Update

With all the necessary caveats already described extensively on the ts-trading-technique site, here are the calculated cycles at this point in time.

Market Outlook RUT for Dec 3rd '07

Dominant TF: Daily, and 15mins (not shown).
Swings: UP-UP-DN (from UP-UP-DN)
Market direction: Congestion to Up.

Interesting to see that like the other 2 symbols under study, RUT had to reach PR1 and stall level around 780.

60mins: Congestion.
Same as previous post: MTFS Pattern is unclear but parallel and slightly downward MTFS lines tend to indicate congestion, and Entropy has also peaked.
Upward bias might vanish soon. In such case, check Fib support levels.

Daily: congestion to mildly up
This early MTFS crossover is very seldom conducive to a definite change in direction. A congestion is likely, and RUT should try and find a stronger base for support. In some cases, it indicates a failed recovery, but one can assume 750 would offer a strong resistance to bears.
RUT indeed seems to show evidence of a cycle turning point, so any retracement should be limited (757, and 750 in the worst scenario)

Weekly: return to the trading range, but lower bias still.
We're now back in our [750-875] range, and still pretty much directionless. It will be interesting to see whether RUT closes the week over the lower end of the channel (~763). It seems that the 'double top' scenario is now a little more remote, but we should wait for the bar to at least change colour first. Until then the bias remains down.

Market Outlook SPY for Dec 3rd '07

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

Like NDX, the market aimed at reaching 150, but unlike NDX, SPY held up nicely, and closed where expected i.e. ~ 148.40

60mins: congestion to mildly down
The recovery that was earlier stopped on PR1 (from previous down leg), this time extended to stall level i.e. short of strong MM resistance, half way between intermediate resistance (white dots) and upper resistance level. Such 150 level remains a target, but energy is now exhausting, and MTFS is also weakening. So, despite the upper bias, there is virtually no chance SPY passes 150 in the short term.

Daily: congestion to mildly up
With now both 60mins and daily chart with equivalent significance levels, and a MTFS pattern that is typical of a failed recovery, it is not easy to make head or tail of this market. Entropy on both charts also aim at different directions.
As mentioned on previous post, we'll have to wait for a pattern to develop, possibly a cup & handle formation. There is however no downward pressure right now, so difficult to estimate where a stronger support level will be found.

Weekly: congestion - very low significance level.
This time frame has such a low significance level it is almost 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 slightly downward biased. Failure to pass the 150 strong resistance level would become alarming if significance level wasn't so low.

Market Outlook RUT for Nov 30th '07

Dominant TF: Daily, and 15mins (not shown).
Swings: UP-UP-DN (from DN-DN-DN)
Market direction: Congestion to Up.

60mins: Congestion.
Pattern is unclear but parallel and slightly downward MTFS lines tend to indicate congestion, and Entropy has also peaked.

Daily: congestion to mildly up
This early MTFS crossover is very seldom conducive to a definite change in direction. A congestion is likely, and RUT should try and find a stronger base for support.
As for other symbols, RUT seem to show evidence of a cycle turning point, so any retracement should be limited (757, and 750 in the worst scenario)

Weekly: return to the trading range
We're now back in our [750-875] range, and still pretty much directionless. It will be interesting to see whether RUT closes the week over the lower end of the channel (~763). It seems that the 'double top' scenario is now a little more remote, but we should wait for the bar to change colour first.

Market Outlook SPY for Nov 30th '07

Dominant TF: Daily
Swings: UP-UP-DN (from DN-DN-DN)
Market direction: up, but a pause is likely.

Note: swing gradient are opposite on daily and weekly charts, and both have too steep a gradient to be stable.
Daily chart has a much higher significance though so overall upward bias is likely.

60mins: congestion to up
Recovery stalled on PR1 (38.2% Fib upward retracement), and there will be hesitation between running for 150 and pausing a bit. MTFS and Entropy show signs of weakening albeit without serious downward pressure. A [147-150] trading range is likely.

Daily: congestion to up
Again, PR1 at 147.10 marked a pause in current recovery. MTFS is not showing the easiest pattern as an early crossover (above oversold territory) generally occurs on negative gradient indicating a forthcoming double bottom or cup and handle. The positive gradient this time may mean little or no retracement down to a stronger base for rebound.
SPY will try and reach Fib expansion levels starting with 148.4, but MTFS indecision may mean some congestion ahead.

Weekly: congestion - very low significance level.
This time frame has such a low significance level it is almost 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 slightly upward biased (higher highs and higher lows).

Market Outlook NDX for Nov 30th '07

Dominant TF: 60mins, but 15 mins charts
Swings: UP-UP-DN (from UP-DN-DN)
Market direction: Recovery is yet to be confirmed.

2nd day recovery was mild but at least held up. Again a stronger base is needed to go higher but should it fail to retrace (2062?) a congestion at first may be good enough.
Lower time frames provide a better picture at the moment.

60mins: congestion to up, but some retracement is also possible.
MTFS and Entropy show a likely slow down, but in this high volatility environment NDX may have enough momentum to reach the 2125 pivot level first.

Daily: mildly up
Swing now also turned up, and MTFS is in better looking U-shape pattern. Such pattern's validity depends on the depth of the green line which is only mildly positive. This means the upward potential is relatively limited in the short term (2125?). It is only if/once 2125 is passed that NDX will likely return to the overall bullish trend and reach Fib targets, with 2250 being very significant (strong MM resistance as well).

Weekly: trading range
NDX is firmly back in its channel. However current movements are too fast for this time frame.

Market Outlook RUT for Nov 29th '07

Dominant TF: Daily, and 15mins (not shown).
Swings: UP-UP-DN (from DN-DN-DN)
Market direction: UP, but recovery must be confirmed.

See yesterday's post ("Check Cycles") as well as NDX and SPY commentaries today.

60mins: Up, but recovery must be confirmed.
Admittedly surprised by yesterday's move.
MTFS and Entropy look better but the MTFS green line is lagging behind while the white line reaches overbought territory very quickly. This indicates a likely pause (we even have a possible AutoFib pattern pointing south).
The 150 level could even be tested again for support.

Daily: congestion to mildly up
We expected a congestion and we got that sudden burst upward. The MTFS crossover on a negative gradient does not point for RUT going much higher for now, and while the fall looks stopped, a stronger base will need to be found to go higher (150?).
As for other instruments, cycles seem to show a turning point, however slightly delayed compared to NDX. Looking at MTFS, it is quite possible that such turnaround will occur after a stronger support is found within a few bars.

Weekly: return to the trading range
It is interesting to see RUT possibly closing the week over the lower end of the channel. For the time being, let's push the 'double top' scenario a little further (we might dump it in a few weeks). We're therefore now back in our [750-875] range, and pretty much directionless there.
Again, RUT has always bounced on PR2 in the last 2 years, and it may just behave the same this time again.

Market Outlook SPY for Nov 29th '07

Dominant TF: Daily
Swings: UP-DN-DN (from DN-DN-DN)
Market direction: up, but a pause is likely.

See notes on NDX post, in particular about cycles. SPY cycle seems a little lagged compared to NDX's

60mins: up, but recovery must be confirmed
Admittedly surprised by the strength of this recovery, even if we knew a breakout was possible. MTFS and Entropy do point higher but caution must be exercised. A pause is quite possible on the way to 150.

Daily: up, but recovery must be confirmed
Despite yesterday's "burst" MTFS and Entropy still do not look great. At this stage we can assume the price erosion has stopped but it is likely that the recovery will need a stronger base. Let's wait until MTFS lines meet. When confirmed, we'll watch for the AutoFib targets and obviously the 50% retracement and MM level at 150.

Weekly: congestion - very low significance level.
This time frame has such a low significance level it is almost 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. The lower end of the range could be tested again.

Market Outlook NDX for Nov 29th '07

Dominant TF: Daily, but mostly 10 and 15 mins charts
Swings: UP-DN-DN (from UP-DN-DN)
Market direction: Recovery is yet to be confirmed.

You may have noticed over the last few days that i advised
about checking lower times frames, as something was boiling under the hood. Secondly, I mentioned yesterday that it would be worth taking a look at cycles. Of course, I have warned again that cycles must be analysed with a lot of caution, yet it seems to have proved right this time.

60mins: up, but check resistance level around 2095 then 2125
The 2030 pivot level disappeared at the open, and the 2060 didnt show much resistance either. Fractal levels are still about 31 points apart, and NDX gathered enough momentum to get the next resistance level (more significant on lower time frames). Current level can hower pause the recovery.
Indeed MTFS and Entropy are strong but 'half-way' through only. Recovery must therefore be confirmed. Again, it is recommended to follow the 15mins chart (Sig Level = 92%).

Daily: mildly up
I would suggest reading yesterday's commentary again.
A bounce was announced, but due caution was also expressed as such recovery could have started from a lower base. Having said that, cycles, AutoFib, and engaging looking at lower time frames should have made possible to be there on time.
Where do we go from here? The MTFS pattern is not bullish yet so it is essential to wait to see the recovery confirmed over the next few days. Such recovery after such an incredible day (+3%) will obviously slow down. It is likely that if/once 2125 is passed, NDX will likely return to the overall bullish trend and reach Fib targets.

Weekly: congestion to mildly up - low significance level.
Bounce on the lower end of the channel and 2000 support level should help NDX go a little higher.
This is however not a very significant time frame.


Reminder on cycles:
1) check error level is close to Lag128's optimal error level
(a visual check can do no harm either)
2) check shape of blue curve (quarter cycle phase advance) for a top/bottom
3) count bars (quarter cycle) to gauge potential forthcoming turnaround on cycle (magenta curve)
4) ALWAYS CHECK FOR SUPPORTING INFORMATION (MAINLY MM AND FIB)

NOTE: This genetic algorithm is VERY processing intensive so should only be applied to EOD charts