cf. RUT post below
Thursday, January 31, 2008
Market Outlook RUT for Jan 31st '08
Dominant TF: 60mins taking over, Daily declining
Swings: DN-DN-DN
Cycles: unreliable (too trendy)
Market Direction: volatile, lower
Position (60mins): short
A lot of volatility and disappointment on that rate cut, now what next?
60mins: pessimistic
RUT reached Fib target on Fed announcement then reversed quickly. The negative sentiment has been prevailing so no surprise at all in fact. RUT can now try and find support around 693, however the MM pivot level at 687.5 is stronger. MTFS and Entropy are also pointing downward. The MTFS green line is still high enough to cushion the downward movement, so no free fall in sight.
The Swing indicator is Down, but is too steep to be regarded as stable right now.
Daily: upward retracement lacking steam
We saw quite some time ago a MTFS crossover that wasn't lookig too good, so we shouldn't be surprised if the recovery is now stalling. Despite yesterday's reversal, there is no downward pressure just yet, so we have to wait for the pattern to develop fully over the next few days. For the time being, we should see some congestion with a lower bias.
Weekly: back to lows...?
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 somewhat bearish. Having said that, there may be an upward retracement (if/when MTFS white line turns around) and a probable congestion in the [625 - 687] trading range indicated by Entropy bottoming out.
Wednesday, January 30, 2008
Market Outlook NDX for Jan 30th '08
Dominant TF: Daily
Swings: UP-DN-DN
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): congestion
Position (60mins): flat, however selling 2150 call spreads is still a very conservative bet, Feb 2000 is pretty safe too
Market is relatively quiet now ahead of Fed meeting, so we're just going to read what the charts have to tell us at this time, knowing martlet is full of surprises. Having said that, if i were to bet on a reaction to the announcement at the end of the week, i would certainly have a short bias.
60mins: congestion with a remaining slight upward bias.
MTFS lines are about flat in median territory, so is Entropy, and not help from levels.
Technically the Swing is UP, but can NDX really creep up to 1880? New energy is needed and it can only come from an exogenous source like a reaction to a rate cut or absence of it. Answer in a few days...
Daily: support confirmed but...
Hardly any change since last report:
While we certainly have Entropy coming up, MTFS has not shown the best looking line crossover, and Entropy is only picking up slightly from its recent lows. Again, this is not the easiest scenario, but i would anticipate continuation of the congestion... with a possibility to go much lower if some new recession news spook the market, or if the Fed doesn't act soon.
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 technically never broke as a strong resistance level even if it appeared broken during 4th quarter 2007, and on the contrary, support level dropped!
So are we bearish? hmmm VERY cautious at least, i would say.
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
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