cf NDX post below
Monday, February 04, 2008
Market Outlook NDX for Feb 4th '08
Dominant TF: 60mins
Swings: UP-DN-DN
Cycles (DomTF): pointing down, but somewhat unreliable in this market
Market Direction (Daily): congestion with upper bias
Position (60mins): flat, however selling 2150 call spreads is still a very conservative bet, Feb 2000 is pretty safe too
Fed rate cut brought a bit of volatility to leave finally the market more or less in it (short term) recovery course. Having said that, little visibility... and little chance to see NDX pass the 1875 level.
60mins: congestion with a remaining slight upward bias.
MTFS lines are about flat in median territory, so is Entropy, and not help from levels right now (possible target at 1875). Swing quality is lower that higher time frames which are pointing down.
Daily: support confirmed but...
Such MTFS crossover is hordly ever indicative of a good recovery. However lines are pointing up and Entropy is also doing better confirming the upward bias for now. One can notice that the Fed cut had very little effect, so the momentary boost we've had may lapse soon...
Weekly: definite down bias still
No reason to be optimistic here, so while some may want to go contrarian in shorter time frames, one should remain VERY cautious long term.
Friday, February 01, 2008
Market Outlook SPY for Feb 1st '08
Dominant TF: 60mins
Swings: UP-UP-DN
Market Direction: congestion with upper bias in the short term
Position (daily): flat for most, long entry (a week ago) in shorter time frames. Long term: non-directional with lower bias
Got it a little wrong yesterday on RUT at 60mins level, as i didnt anticipate an up day. Volatility is indeed sometimes difficult to capture. The general outlook is however unchanged: caution is to be exercised. The market is not the easiest to read at present, and some may want to stay on the side line or play non directional as congestion is likely.
60mins: the market is trying to break out but...
SPY is testing MM pivot level and could well break out on the up side, but that it is still unlikely looking at current chart. It twice stopped on Fib target and is not showing energy to reach higher levels for now.
Daily: no strong recovery just yet
As said again and again, the MTFS line crossover cam too early, indicating in most cases either a failed recovery or at least a double bottom or cup&handle formation. Can yesterday's lows be the new support level? Possible even if not convincing. The 60mins chart is now dominant, so we'll have to take cues from behaviour at lower time frames for now. With the benefit of the doubt, MTFS line gradients, increasing entropy etc. a positive bias is there for the time being.
Weekly: bottom?
MTFS and Entropy do still point downward, but EntBin is only -1 and MTFS significance level is quite low. No rejoicing however as we have to wait for 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.
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.
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