cf. NDX post below for guidance.
Tuesday, April 08, 2008
Market Outlook NDX for Apr 8th '08
Dominant TF: 60mins with weekly chart coming back too.
Swings: DN-UP-DN
Market Direction (Daily): hesitation on resistance level
Cycles: unreliable
Position (60mins): flat, or long with tighter stops
NDX has been understandably hesitant on MM resistance level. Current levels (~1880) are key test levels for this symbol.
We'll note the same key level on EURUSD : 1.5625
60mins: undecisive
NDX has reached its target level and is more or less hovering there still. It is therefore a little difficult to project accurately what is coming next. NDX could go either way on this test level but a retracement back to ~1840 looks quite plausible in the short term.
Daily: bullish but low significance level
NDX is certainly aiming higher, even possibly back to 2000 within a few weeks. However a retracement is quite possible along the way (EntBin = 5). MTFS is now fairly positive so a pull back wouldn't attenuate the current upper bias.
Weekly: patience...
The Swing indicator is hesitating, but is still DOWN. MTFS is still moderately bearish despite the bounce in the last 2 to 3 weeks. Again, we have to see completion of the MTFS pattern and dissipation of negative pressure in the market.
NDX has now reached PR1 (~1880) exactly as anticipated, but the MTFS pattern should certainly prevent NDX from going higher for now. It seems a pause or a retracement is inevitable. The 2000 level will later on be a lot more determinant for future direction.
Sunday, April 06, 2008
Market Snapshot for RUT - Apr 7th 2008
cf. SPY post below for guidance. Levels are specific, but dynamics are similar for correlated symbols.
Market Snapshot for NDX - Apr 7th 2008
cf. SPY post below for guidance. Levels are specific, but dynamics are similar for correlated markets.
Market Outlook SPY for Apr 7th '08
Dominant TF: Weekly followed by 60mins.
Swings: DN-UP-DN
Cycles: good fit but not quite reliable
Market Direction: upper bias
Position: flat, some would still be long with a tighter stop
Last few days have been pretty easy. Good bounce on pivot level due to some portfolio adjustment on new quarter, and momentum taking prices to Fib + MM target.
60mins: hesitation on target level
Now that profits have been taken, we can see thatMomentum has dissipated fast on target level (MM + Fib). Only remains a slight upper bias on the MTFS indicator.
Entropy is confirming current indecision. This market may be sensitive to news, otherwise should retrace a bit in the short term (quite a strong resistance).
Daily: back to upper range boundary
SPY will test range highs in the next few days. MTFS is looking positive but significance level is very low, hence caution is required. Again, we shall keep the current upper bias into account and check SPY's behaviour on range highs for future direction. A breakout is in the cards, but it still looks too early to happen in the next few days.
Weekly: no significant change yet.
As expected, the bounce took SPY up to PR1 (38.2% retracement). This is good news and negative pressure may dissipate quicker. Yet, the MTFS pattern does not show any long term recovery potential, so we'll look at each Fib and MM resistance levels carefully. For the time being, SPY should remain within the same range (mid to upper 130s).
Friday, April 04, 2008
Market Outlook RUT for Apr 4th '08
Dominant TF: weekly and 60mins charts
Swings: DN-UP-DN
Cycles: very unreliable (low signal/noise ratio)
Market Direction: same trading range. 688 is key level.
Position (60mins): long, looking at possible profit target.
Options:
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts
The 688 pivot level indeed proved to be a key level, and with the help of portfolio adjustments on new quarter, RUT went higher, hovering on stall level.
We'll also keep an eye on EURUSD key level : 1.5625
60mins: Resistance level around the corner
This time frame is only second to the weekly one, so we won't try to read too much into the MTFS here, which is not giving us a clear pattern. Lines are high and pointing slightly up and Entropy is about flat, so we can only anticipate an upper bias to the resistance level around 719 (MM + Fib target).
Daily: looking better
As we said in previous posts, RUT has climbed back to the upper half of its trading range, same since early january.
Now despite a low significance level, MTFS looks positive at least to the upper range boundary.
Line separation would indicate profit taking or retracement going forward, so we'll watch how the MTFS pattern develops over the next few days. In the best scenario, a breakout would occur to take RUT back to 750.
Weekly: congestion to down bias
No change from last post.
The weekly chart is certainly slower and market outlook at this level only needs to be touched up a bit from the previous post.
Again we have to wait for completion of the MTFS pattern, and this could take up to 4 to 6 weeks. Entropy could still bode for a bounce, but certainly no significant recovery in sight any time soon.
In the best case scenario, RUT would climb up to Fib PR1 i.e. 724 (we do notice the low 720s being key level going forward) . The most likely scenario is that negative pressure will dissipate through the passage of time, and RUT would remain within the current range, eventually hitting the strong MM support should the financial sector unravel more bad news.
Thursday, April 03, 2008
Market Snapshot for EURUSD - Apr 3rd 2008
For a couple fo weeks, a EURUSD snapshot is also published to keep a record of a possible change in dynamics in this forex pair, as it has consequences on other indices and symbols such as @QM (oil).
We'll watch the 1.5625 key level very carefully for forthcoming direction.
Market Outlook NDX for Apr 3rd '08
Dominant TF: 60mins then Daily. Weekly chart coming back too.
Swings: UP-UP-DN
Market Direction (Daily): up, but test level in sight
Cycles: unreliable
Position (60mins): long, but possible profit taking to re-enter later on
I was maybe a little conservative on last post on Mar 31st, as NDX has since managed to complete the Fib pattern to strong MM resistance level. While it was a possibility (bounce on Fib level), it wasn't quite yet visible last week.
Again, we shall watch for clues in correlated markets and keep an eye on EURUSD.
60mins: hesitation on target level.
NDX has reached its target level is now visibly abating (MTFS + weaker Entropy). Target level could be tested again.
Daily: upper bias for now
It was interesting to see that the MTFS recovery pattern finally made it despite some uncertainty last week. Difficult to know whether squaring out positions on quarter end, and adjustments on new quarter had an impact, but outlook looks much better.
However, we'll have to keep in mind that the daily time frame is not our dominant time frame at the moment.
Profit taking could occur within a couple of days (EntBin is high and MTFS white line separating)
Weekly: caution...
The Swing indicator is hesitating, but is still DOWN. MTFS is still moderately bearish despite the bounce in the last 2 to 3 weeks. Again, we have to see completion of the MTFS pattern and dissipation of negative pressure in the market.
NDX should reach PR1 (~1880) but it is too early to go higher. NDX could then pull back a little again, but as mentioned previously, put spreads should be quite safe now, i.e. the worst seems to be over.
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