cf. SPY post below
Tuesday, January 29, 2008
Market Outlook SPY for Jan 29th '08
Dominant TF: Daily
Swings: UP-DN-DN
Cycles: unreliable (too trendy)
Market Direction: congestion with upper bias in the short term
Position (daily): flat for most, long entry (since last post) in shorter time frames.
Last time, i mentioned that contrarian traders would have been long. The 60mins scenario happened exactly as anticipated. It pays off to be early, it depends however on the investment horizon and the long term outlook is not great.
60mins: bottom has been found... for now
The sudden rate cut, a bit of short-squeeze maybe, managed to calm bears down for now. For the time being, Entropy and MTFS are not indicating much of a direction. SPY could well reach MM pivot level, up to maybe a Fib target. We have the FOMC meeting coming, so it is understandable that visibility or market readability becomes a little more fuzzy.
Daily: no strong recovery just yet
Entropy is slowly picking up, but after a (too) early MTFS lines crossover, it is unlikely any strong recovery can happen in the coming day. Of course, we have no crystal ball and another significant rate cut could certainly change the market dynamics, We'll watch carefully the Fib retracement levels on the way up.
NB: the Swing indicator is now up but is not in stable condition just yet.
Weekly: bottom?
MTFS and Entropy do still point downward, but EntBin is only -1 and MTFS significance level is quite low. No rejoicing however, we have to wait Entropy to bottom out, MTFS to look better and the end of the series of red bars.
Not sure when this will happen, but a recovery is possible (MTFS white line turning up in oversold territory, and Entropy bottoming). Again MTFS lines gradients do not indicate a return to the bull market though.
Saturday, January 26, 2008
Market Snapshot for NDX - Jan 28th 2008
Could i have been more right on Friday... :)
For details: cf RUT posted below
Market Outlook RUT for Jan 28th '08
Dominant TF: Daily declining, Weekly picking up
Swings: DN-DN-DN
Cycles: unreliable (too trendy)
Market Direction: congestion at best, possibly lower still
Position (60mins): flat for most, short otherwise.
I love it when i'm spot like yesterday on NDX... anyway, let's move on to this one. Typical reprieve offered by bears having some indigestion, yet their appetite could well come back soon enough.
60mins: bottom has been found... for now
RUT struggled to retrace up almost to Fib PR1. Entropy is fading and it is now sitting on pivot level. 750 is now the strong MM resistance level with 625 as strong support. RUT may be a little directionless, but the overall down bias should take over soon.
Daily: possible congestion - lower vol.
MTFS has been trying to point for recovery but not too convincing i must say. One wouldn't go long on a down Swing anyway, and even if the fall stopped on MM stall level, there is some potential to test support level if not going lower.
Weekly: bottom?
The week ended on a red bar, bearish looking MTFS and Entropy. What more can i say. If MTFS had shown a green line holding up high while the white line drops sharply, one would have likely had a recovery potential, but this figure is bearish. Having said that, ther may be retracements and a possible congestion in the [625 - 687] trading range.
We now have to wait Entropy to bottom out, MTFS to look better and the end of the series of red bars to anticipate a confirmed bottom.
Friday, January 25, 2008
Market Outlook NDX for Jan 25th '08
Dominant TF: Daily
Swings: UP-DN-DN
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): congestion to low
Position (60mins): flat to long (shorter intraday time frames), selling 2150 call spreads would be a very conservative bet, otherwise 2000 is pretty safe too
We were short last time on NDX (Jan 18th). Target was obviously 1750, but behaviour on support level was not easily predictable. 1750 has been penetrated deep but hasn't broken, making current bounce even stronger.
60mins: check resistance levels
Nice bounce from recent lows, NDX is not out of the woods, but could well reach PR1 (1865) to intermediate MM level (~1880). There is no indication from MTFS or Entropy that it would go much higher right now, but momentum can always pick up as we go along.
Daily: support confirmed but...
Some may say the worst is over, let's just go long. Hmmm, there are trading opportunities at shorter time frames indeed, but on the daily chart, while we certainly have Entropy coming up, MTFS is not showing the best looking line crossover. This is not the easiest scenario, but i would anticipate congestion once the current up move (60mins chart) is over. Bar is still only yellow, and new MM support level is now much lower (cyan dots turned white)
Weekly: definite down bias still
No panic, but 1750 could be tested again, or at least congestion in the lower part of the trading range may happen. One can notice that 2000 never broke as a strong resistance level even if it appeared broken during 4th quarter 2007, and on the contrary, support level dropped!
The current snapshot has been changed to show more MM levels (ugly, but explicit)
Thursday, January 24, 2008
Market Snapshot for NDX - Jan 24th '08
More or less same scenario as for SPY, only slightly more bearish maybe.
NDX always over-reacts (higher volatility).
Market Outlook SPY for Jan 24th '08
Dominant TF: Daily
Swings: UP-DN-DN (from DN-DN-DN)
Cycles: unreliable (too trendy)
Market Direction: congestion at best, possibly lower still
Position: flat for most.
125 seems to hold, and contrarian traders are in already.
60mins: bottom has been found... for now
SPY made a good recovery in the afternoon, and indicators do look much better. Significance level is not too high, so one would have looked at lower time frames for a possible long entry.
What next? Again, some profit taking is possible early in the day (resistance level), even if bears now get slowly exhausted.
Daily: no strong recovery just yet
MTFS is only looking slightly better bow with lines attempting an upturn, yet the early crossover must leave us cautious, and the bar is still red after all. Entropy may be bottoming out (with a EntBin = -4).
Since the rebound happened on Fib target and MM pivot level, moderate optimism is possible.
Weekly: bottom?
MTFS and Entropy do still point downward, but EntBin is only -1 and MTFS significance level is quite low. No rejoicing however, we have to wait Entropy to bottom out, MTFS to look better and the end of the series of red bars.
Subscribe to:
Posts (Atom)
