Market Outlook RUT for Jan 10th '08

Dominant TF: 60mins & Daily
Swings: UP-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: recovery needs confirmation
Position:
Short: would have taken profit, but exit point around 700 is still possible
Long: way too early

60mins: fall may be over, but no strong recovery just yet
RUT about hit its target on MM level and recovered a bit. EntBin is very low, which certainly indicates a possible bounce, so reaching 732 again cannot be discarded. MTFS is not quite the best looking pattern for recovery though, so no real recovery in the short term.
NB: the Swing indicator is a very early indicator, but ALWAYS needs confirmation. It may turn back down, hence indicate more an end to the current fall than a real recovery.

Daily: congestion to down
The Fib target (~688) has been hit quicker than i thought. Entropy indicates a possible bounce, but like for the equally significant 60mins chart, MTFS lines are too steep to indicate a strong recovery. Bears may want to try and test lows again, or at least the low 700s.

Weekly: congestion to down
RUT has always bounced on PR2 (61.8% Fib retracement) but this time didn't. This confirms RUT is definitely in correction mode at least to previous lows around 670 - 680. We may also find guidance on Fib levels from 2005 or before.

Market Outlook SPY for Jan 10th '08

Dominant TF: Daily & 60 mins
Swings: UP-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: probably lower still
Position:
Short: would have exited conservatively, but a good exit point around 138 is still possible
Long: too early...

60mins: fall may be over, but no strong recovery just yet
Exact same configuration as for RUT today

Daily: congestion to down
Like with NDX and RUT, SPY had to hit its target, and remains a little bearish. Negative pressure will take some time to exhaust, so MM support or the Fib target should be tested again.
One should wait for MTFS to show a clearer pattern with crossover and Entropy to bottom out first to consider the fall to be finally over.

Weekly: congestion to down
MTFS is a bit out of sync, but we can obviously notice lows being tested. SPY could remain in the low 140s for a short while.

Market Outlook NDX for Jan 10th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-UP (from DN-DN-DN)
Cycles (DomTF): have been turned off as too unreliable in this market
Market Direction (Daily): congestion
Position (60mins):
Short: would be looking for an exit point in the low 1900s
Long: not quite yet

NDX is now looking for support.

60mins: possible congestion
Is the fall over? Well, one must always take MM stall levels seriously (half way between MM white dots and strong MM support at 1875). That level is around 1906.
MTFS is not indicating a real recovery at this stage, but the fall may be over. In such circumstances, NDX could retrace up to PR1 (~1989) but this is unlikely. Bears won't give up without a good fight, so NDX should be contained within a trading range around the low to mid 1900s

Daily: support level must be tested
NDX hit its Fib target, then recovered a bit, yet MTFS and Entropy still point downward. If 1886 proved to be a support level it will have to be tested again. Bears may go softer now though.

Weekly: definite down bias, check Fib and MM levels
It seems the bull run is now over so we may need to enter a correction mode (not bear mode yet though). One can notice that the Swing indicator is hesitant at this level (down yesterday, up today).
Note: this proprietary Swing algorithm differs from conventional algorithms which always toggle in lower time frames first. We are in this instance probably close to a key level at this time frame.

Market Outlook RUT for Jan 9th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: probably lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad

60mins: likely congestion or slightly down.
Similar as yesterday and similar to SPY: RUT could hold around MM stall level at 704 or drift to 688.

Daily: congestion to down
While not overly bearish, the current situation with Entropy picking up momentum and steep MTFS lines indicates RUT going lower. It seems that 688 will be hit at some point.

Weekly: congestion to down
RUT has always bounced on PR2 (61.8% Fib retracement) but this time didn't. This confirms RUT is definitely in correction mode at least to previous lows around 670 - 680. We may also find guidance on Fib levels from 2005 or before.

Market Outlook SPY for Jan 9th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: probably lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad

60mins: likely congestion on stall level or slightly down to support level.
Similar as yesterday: SPY fall stopped on MM stall level around 139. The overall environment remains fairly bearish but Entropy is not so strong anymore. The strong MM level remains 137.50.

Daily: congestion to down
Similar to yesterday:
Like with NDX, we are surprisingly not in a very bearish environment just yet. SPY should drift further down to 137.5. There is no clear indication of a bottom in the near term. The 139 stall level shouldn't hold, so we'll have to watch for 137.5 or possibly the 136 Fib target.
SPY has the potential to go lower, but negative pressure could exhaust within a week or so.

Weekly: congestion to down
This time frame has been out of sync for a while, but we shall notice the previous lows, which bears should try and test.

Market Outlook NDX for Jan 9th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): have been turned off as too unreliable in this market
Market Direction (Daily): drifting down
Position (60mins):
Short: nothing wrong with taking profits, but maybe more to come
Flat: be patient
Long: you must be mad!

NDX is now looking for support.

60mins: possible congestion or slower price erosion.
As mentioned yesterday, support held for a while, then bears decided to have a go at it again.
Pattern-wise, MTFS needs better foundation to find support (crossover with a decent gradient in oversold territory), but Entropy is calming down a bit. MM support level is 1875, and we have a Fib pattern on the daily chart (equally significant at 0.88)

Daily: down looking for support.
Same as yesterday: MTFS is driven by its lines gradient right now. Amazingly, MTFS line levels are not quite indicative of a market fall just yet even if it is becoming a little alarming for some.
Again, the overall MTFS pattern is definitily not a conventional one (or close to a 'failed recovery' pattern), so we'll probably stay in a broader trading range until lines finally converge in oversold territory.
Volatility has however already pushed levels pretty wide apart so the next

support level may well be 1886 (Fib target) or around 1875 (MM support level on 60mins chart). MM Stall level is 1904.

Weekly: Channel broke out... what next???
It seems the bull run is now over so we may need to enter a correction mode (check FIb + MM levels)
We should however only note the clear down bias for now, and focus on shorter time frames. Please also note that Swing is still hesitant at this level and could therefore turn up again. In other words, correction mode is not bear mode just yet at this time frame.

Market Outlook RUT for Jan 8th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: possible upturn, but very low significance level...
Market Direction: down, but possible support level at 719
Position (60mins):
Short: some may want to hang on, but nothing wrong with taking profits.
Flat: it would be cautious to stay a little longer on the sideline
Long: are we looking at the same chart !!!?!?

Note: this chart reads like SPY

60mins: congestion or down drift
The MTFS crossover does not indicate any recovery potential, and while Entropy seems to have bottomed it remains very low. EntBin is quite low at -4 though, but it has been low for a few days. In such situation a congestion at this low level is possible, but this support level is not very strong, so RUT could drift more altough there is no clear Fib level to aim to. The next strong MM support level is 688, which surprisingly is lower than on the daily chart.

Daily: down but 719 may hold for now.
The down drift may continue until lines eventually bounce in oversold territory. The previous recovery pattern (started end Nov) failed, so we have to wait for the next one... or adjust to a new bear trend.
For the time being, Entropy indicates little energy either way, so RUT may stay congested (with a lower bias) for a while.

Weekly: lower bias
MTFS is not looking too good, while its significance level is picking up. A support must be found soon otherwise RUT will definitely turn to correction mode down to 680.

Market Outlook SPY for Jan 8th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: indicates a possible upturn but totally unreliable significance level
Market Direction: probably lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad

60mins: likely congestion or down drift.
The MTFS crossover came too early to indicate a recovery and Entropy hasn't bottomed yet, so we may have a congestion at best, otherwise SPY could well also drift to the stall level around 139, just above the strong support level at 137.50.
NB: EntBin is very low at -4 (Min is -5) though so a bottom may occur soon.

Daily: congestion to down
Similar to yesterday:
Like with NDX, we are surprisingly not in a very bearish environment just yet. SPY could drift further (137.75?) or just remain congested at this low level for a while (~140.60).

Weekly: congestion to down
Again, this time frame has difficulty adapting to the current market moves at the moment.
We would like to see Entropy stabilising for a possible recovery. We have to watch current levels or possibly 137.75 for a stronger support level now.

Market Outlook NDX for Jan 8th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): possible upturn but unreliable significance level
Market Direction (Daily): drifting down
Position (60mins):
Short: nothing wrong with taking profits, but maybe more to come
Flat: be patient
Long: you must be mad!

NDX could pause at this level, or even hold the position until negative pressure is exhausted. We are however more likely to see NDX coming down still. The market is not the easiest to read on account of various expectations on forthcoming rate cuts.

60mins: possible congestion or slower price erosion.
As mentioned yesterday, NDX found support on 1938 and even picked up a bit on the last hour of trading to close at stall level above 1950. NDX may hold at this level but this is unlikely to last long.
We know that such MTFS line crossover pattern is not conducive to recovery and Entropy has not bottomwed yet.

Daily: drifting down looking for support.
MTFS is driven by its lines gradient right now. Amazingly, MTFS line levels are not indicative of a market fall (Entropy either actually), so the 1938 support level may hold.
The overall MFS pattern is not a conventional one (or close to a 'failed recovery' pattern), so we'll probably stay in a broader trading range until lines finally converge in oversold territory.
Volatility has however already pushed levels pretty wide apart so the next support level may well be below 1900 at around 1875.

Weekly: Check channel's lower boundary
We should only note the clear down bias for now, and focus on shorter time frames. Please also note that Swing is still hesitant at this level and could therefore turn up again.

Market Outlook RUT for Jan 7th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: possible upturn, but fairly low significance level...
Market Direction: down, but possible support level at 719
Position (60mins):
Short: some may want to hang on, but nothing wrong with taking profits.
Flat: it would be cautious to stay a little longer on the sideline
Long: are we looking at the same chart !!!?!?

60mins: the fall may at last find some support
734 did not hold in such a bearish environment. Next support level is 719, almost hit Friday afternoon. The MTFS white line is stabilising indicating the fall may be soon over, but the other lines still look quite bearish. 719 looks like it could hold though.

Daily: down but 719 may hold.
MTFS lines have a negative gradient that is too steep for RUT to recover right now. The pattern we saw since lines crossed over has failed and now needs a new start. Entropy is low, so the 719 level could hold but one should remain cautious as it also go lower.
Upturn in current cycle is unlikely right now (significance level way too low).

Weekly: lower bias
MTFS is not looking too good, while its significance level is picking up. A support must be found soon otherwise RUT will definitely turn to correction mode down to 680.

Market Outlook SPY for Jan 7th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: possible upturn but unreliable significance level
Market Direction: probably lower lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad

We admittedly did not fully anticipate the market to fall so quickly. We thought the 143.75 level would be at least somewhat defended.

60mins: down still
The pattern is not quite complete yet, although the MTFS white line may imply some cooling down. The sentiment is still quite negative though.

Daily: congestion to down
I warned to be careful about the triangle breakout... could not be more right, could i ...? Surprisingly, MTFS and Entropy are not overly bearish yet, so we can see it either as room to fall further (137.75?) or maybe a sign it will be soon over (140.6?).

Weekly: congestion to down
Quite a volatile environment... This time frame has difficulty adapting to the current market moves at the moment.
We would like to see Entropy stabilising for a possible recovery. We have to watch current levels or possibly 137.75 for support now.

Market Outlook NDX for Jan 7th '08

Dominant TF: 60mins & also Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): possible upturn but unreliable significance level
Market Direction (Daily): down
Position (60mins):
Short: hang on
Flat: be patient
Long: you must be mad!

We certainly saw it coming, but still got surprised by the strength of the sell-off, which accelerated after 2000 gave up to sellers.

60mins: down
NDX could pause a bit after this bloodshed as the MTFS white line crossed over, but the fall is not over yet. MTFS and Entropy still look bearish and the next support strong support level is 1938. (Look also at stall level just above 1950).

Daily: down but support is possibly not too far now.
The 60mins chart took over, and we did not quite expect 2000 to break so quickly. Being on the selling side, such surprise had no impact though.
Significance level is suprisingly still high, and despite the fact MTFS is not showing any classical pattern (after the 'failed recovery pattern' mentioned in December), its lines are only showing a down gradient in median territory, and Entropy itself is not the most bearish.
We also notice that the Swing indicator has some difficulty with fitting with the current volatility.
One cannot discard continuation of the sell-off on this breakout, but indicators are not pointing towards that scenario yet.

Weekly: Check channel's lower boundary
I had warned about the channel boundary. Prices may find a support level around Fib PR1 at 1938 which constitutes a strong MM level on the 60 mins chart.