cf. ER2 post below for guidance
Monday, April 14, 2008
Market Outlook ER2 (RUT) for Apr 14th '08
Dominant TF: 60mins and weekly charts
Swings: DN-DN-DN
Cycles: very good fit but very unreliable (low signal/noise ratio)
Market Direction: down
Position (60mins): short
Options (RUT):
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts
Short May780 Calls, Long May790 Calls,
Long May550 Puts, Short May560 Puts
We have no RUT data, so we swapped for ER2.
We have pointed out how strong the resistance level at the upper boundary of the trading range. We're now halfway down and we'll watch for a possible further deterioration to levels prior to the Fed's bold move. As we said over and over, it will take more time to dissipate the negative prssure.
Options positions are however still looking fine.
On the forex front, despite the current volatility, we'll still keep an eye on EURUSD key level : 1.5625
60mins:
Interpretation has now to be adjusted a little with ER2 which is a little more volatile. Our last report on RUT was correct in direction, but admittedly did not fully anticipate the snowballing effect we've seen.
We here see levels moved downward with a strong support level back to 688, and at a same time the overall range being reduced. At first sight, 688 looks pretty strong, but MTFS is still quite bearish, so we'll also consider the next support level at 670. Entropy is still average, which surprisingly is more indicative of erosion than an actual downward pressure. This would confirm a continuation of current situation.
Daily: looking for support
Not surprisingly, Fib levels are about the same as on the 60mins chart, and 670 looks a plausible target. The weakening of the MTFS is not incompatible with this scenario.
At this point in time, there is no indication that March lows would be hit again.
Weekly: congestion to down bias
I repeatedly said that we have to wait for the MTFS pattern to complete, and until then the downward pressure is dissipated, the current negative bias will prevail. ER2 (RUT) should consolidate at this low level and a line crossover may occur soon. We'll see how a new pattern then develops. In the very worst case scenario, the 625 support level would be hit, but would certainly hold.
Friday, April 11, 2008
Market Snapshot for ER2 - Apr 11th 2008
For some odd reason, I have no access to RUT (it seems I'm not the only one), so I swapped for the continuous futures contract ER2 today as the technique can be used on any symbol.
Again, cf. today's posts below for guidance.
Market Outlook NDX for Apr 11th '08
Dominant TF: 60mins with weekly chart coming back too. We will notice sub-optimal significance level, so shorter time frames may be considered too (30mins).
Swings: UP-UP-DN
Market Direction (Daily): hesitation on resistance level
Cycles: unreliable
Position (60mins): flat
NDX has been evolving between MM levels, after reaching strong MM + Fib target levels (retracement was anticipated on previous post). I here added a shorter intraday snapshot to better visualise dynamics on a 30mins chart.
60mins: still undecisive
We have classic Fib formations here and we would certainly generally favour the bigger one pointing higher. MTFS while showing some hesitation is also pointing up. Yet, for a change, we'll look at the 30mins chart too. MTFS is not very different there, but we will keep an eye on that Fib formation there pointing down.
Such hesitation may take NDX either to 1836 or even 1819 (less likely). It may take up to a day to determine direction.
Daily: fairly bullish still but retracement is likely at first
NDX may have started the retracement we anticipated (MTFS pattern and Entropy peaking). Now since the MTFS green line is higher, there should not be any major change in trend once the retracement is over. We will therefore consider Fib levels as possible supports.
Weekly: patience...
no change since last post:
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 moderate retracement is inevitable. The 2000 level will later on be a lot more determinant for future direction.
Thursday, April 10, 2008
Market Snapshot for EURUSD - Apr 10th 2008
We publish a EURUSD snapshot now and then, as we believe the 1.5625 remains a key level worth watching carefully. That level is currently penetrated but isn't breaking. The bias is still up, but one could consider going flat shortly.
Traders who wish regular updates on forex or any other symbol must contact me for a quotation. I however wish to add that I will consider selling this whole web service later this year.
Market Snapshot for RUT - Apr 10th 2008
cf. SPY post below for guidance. Markets are correlated, so only minor adjustements for specific MM and Fib levels are required.
Market Snapshot for NDX - Apr 10th 2008
cf. SPY post below for guidance. Markets are correlated, so only minor adjustements for specific MM and Fib levels are required.
Market Outlook SPY for Apr 10th '08
Dominant TF: 60mins followed by the weekly chart.
Swings: DN-UP-DN
Cycles: unreliable
Market Direction: upper bias
Position (60mins): short
Yesterday's post on RUT was correct, except maybe that retracement passed PR2 and even almost hit PR2. Just more profits overall...
Back to SPY. Last post was also correct. Same behaviour on range high, so the same pull-back was anticipated.
60mins: will MM support hold?
SPY is now down to the 50% retracement, and seems to have bounced there late in the day. MTFS is now engaged downward, so support should be found lower. SPY could therefore test 135, or even 134.
Daily: moderate retracement
With a high EntBin (=4), profit taking was expectable, but retracement should remain moderate. Since significance level is low on this time frame, we shall rather consider MM and FIb level on the 60mins chart. The bias remains upward overall.
Weekly: again, no significant change yet.
As expected, the bounce took SPY up to PR1 (38.2% retracement) and is now taking a breather. At this time frame, we only have to check how negative pressure dissipates over time. The MTFS pattern does not show any long term recovery potential just yet, but any possible down move going forward should now be cushioned. We therefore just have to be patient.
Wednesday, April 09, 2008
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