Market Outlook RUT for Dec 6th '07

Dominant TF: 60mins & Daily.
Swings: DN-UP-DN (from DN-DN-DN)
Market direction: Congestion to moderately down.

OK, same story... (see SPY and NDX posts) Yesterday's bullish day came a little bit as a surprise, but the market has always surprised with sudden bouts of volatility lately. This does not really change our scenario.

60mins: Congestion.
MTFS still indicates a fairly directionless market, now with an upper bias, but this does not mean it will not now drift a little. One may note that the Swing indicator has not turned up. Like for other symbols, RUT can either remain in the same [750-767] range or jump to the one above [767-781].

Daily: congestion
Exact same situation:
As explained a couple of days ago, we have a typical failed recovery pattern, so we now have to see how it develops (double bottom, cup & handle, or ... downright fall!). For the time being, there is not enough energy for any scenario to develop fast (EntBin = 0).
Note: the cycle detection also gives us a dual frequency possibly causing a momentary congestion due to a phase offset.

Weekly: return to the trading range, but lower bias still.
We're now back in our [750-875] range, with a lower bias. One can only hope that 750 will hold...

Market Outlook SPY for Dec 6th '07

Dominant TF: 60mins & Daily
Swings: UP-UP-UP (from DN-UP-UP)
Market direction: congestion - behaviour on 150 is key.

I warned yesterday of some difficulty in reading the current market, particularly in the short term (60mins chart).

60mins: Up bias (150?) but otherwise a trading range is likely
Pattern not much clearer, indicative of a possible trading range with an upper bias. SPY will either remain in the same [147-148.5] range, or jump to the next one [148.5-150]. We unfortunately have to wait for MTFS lines to group up for the next pattern to emerge.

Daily: congestion to mildly up
Similar situation as yesterday and the day before:
With now both 60mins and daily chart with equivalent significance levels, and a MTFS pattern that is typical of a failed recovery, it is not easy to make head or tail of this market. Entropy on both charts also aim at different directions.
We now have to wait for a pattern to develop, possibly a cup & handle formation. There is however no downward pressure right now, and we have to reach 150 again soon otherwise the 'failed recovery' pattern will become a more likely possibility.

Weekly: congestion to moderately down - very low significance level.
This time frame has such a low significance level it is almost pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a downward bias. Failure to pass the 150 strong resistance level would become alarming if significance level wasn't so low.

Market Outlook NDX for Dec 6th '07

Dominant TF: 60mins
Swings: UP-UP-DN (from DN-UP-UP)
Market direction: recovery potential weakening but the recovery pattern is still there.

I admittedly got it a little wrong on the 60mins i.e. short term yesterday, but the MTFS did not help us with a clear pattern, and we knew we had some opposition with the daily chart. NDX bounced strongly on the 50% retracement level, which I did not quite anticipate. Let's see how this conflictual situation now develops.

60mins: congestion to up.
The Fib pattern could obviously develop further, but there again, MTFS is not offering us a convincing pattern. Despite the burst of energy, Entropy could peak soon. The bias is up, but until 2125 is passed, NDX should stay in the current trading range [2062-2094] or jump to the one above [2094-2125]

Daily: congestion to slightly up
Despite yesterday's up day, the recovery pattern is still weakening indicating difficulty in reaching its Fib target. Entropy may even peak soon at this low level (EntBin = 3). Again it is essential that 2125 is passed so that NDX returns to the overall bullish trend and reaches Fib targets (2140 first), with 2250 being very significant (strong MM resistance as well). Failure to pass 2125 over the next few days, while not really anticipated should be watched carefully.

Weekly: trading range - lower bias
NDX is back into its channel, and bar colour is turning to yellow. However current movements are too fast for this time frame at the moment, explaining the low significance level (53%).

Market Outlook RUT for Dec 5th '07

Dominant TF: 60mins & Daily.
Swings: DN-DN-DN (from UP-UP-DN)
Market direction: Congestion to down.

Similar to SPY, RUT is also drifting down. Yet, a stronger support is near at 750.

60mins: Congestion.
Same as yesterday, except RUT now has to deal with the 750 - 752 support level. MTFS seems to still point a little downward, so behaviour on this key level will be interesting to watch. It is likely that RUT will remain fairly direction less on that level.

Daily: congestion
As explained a couple of days ago, we have had a typical failed recovery pattern, so we now have to see how it develops (double bottom, cup & handle, or ... downright fall!). For the time being, there is not enough energy for any scenario to develop fast.
Note: the cycle detection also gives us a dual frequency possibly causing a momentary congestion due to (near) phase opposition.

Weekly: return to the trading range, but lower bias still.
We're now back in our [750-875] range, with a lower bias. One can only hope that 750 will hold...

Market Outlook SPY for Dec 5th '07

Dominant TF: 60mins & Daily
Swings: DN-UP-UP (from DN-UP-DN)
Market direction: congestion.

Yesterday's anticipation proved right, and today's scenario is about the same. Market readability is however not improving due to opposite information emanating from both dominant time frames.

60mins: congestion to moderately down
Pattern is unclear. Same mild downward bias until some support is found (Fib PR1?).
Note: Rate of decline is close to the natural angle of repose.

Daily: congestion to mildly up
Similar situation as yesterday:
With now both 60mins and daily chart with equivalent significance levels, and a MTFS pattern that is typical of a failed recovery, it is not easy to make head or tail of this market. Entropy on both charts also aim at different directions.
We now have to wait for a pattern to develop, possibly a cup & handle formation. There is however no downward pressure right now, so difficult to estimate where a stronger support level will be found. At the same time, we also have to reach 150 again soon otherwise the 'failed recovery' pattern will become a more likely possibility (new pivot no4 has been detected).

Weekly: congestion to moderately down - very low significance level.
This time frame has such a low significance level it is almost pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a downward bias. Failure to pass the 150 strong resistance level would become alarming if significance level wasn't so low.

Market Outlook NDX for Dec 5th '07

Dominant TF: 60mins
Swings: DN-UP-UP (from DN-UP-UP)
Market direction: recovery potential weakening but the recovery pattern is still there.

NDX came down a bit as expected, and is hovering around 2054 50% Fib level and 2062 MM level.

60mins: congestion to mild retracement.
Very similar to yesterday:
Continuation of price erosion until a support is found possibly around current levels but probably a little lower to next MM/Fib level (2054, then 2040) . There should be no serious downward acceleration though.

Daily: congestion to slightly up
Similar analysis:
The recovery pattern is weakening a bit indicating difficulty in reaching its Fib target. The dominant time frame being 60mins, one must be more cautious, so again the 60mins support level will have to be watched. It is essential that 2125 is passed so that NDX returns to the overall bullish trend and reaches Fib targets (2140 first), with 2250 being very significant (strong MM resistance as well).
Note: a new pivot (no5) is being detected on 2125, so failure to reach 2125 might soon translate into a down swing.

Weekly: trading range - lower bias
NDX is back into its channel. However current movements are too fast for this time frame at the moment, explaining the low significance level (53%).

Market Outlook RUT for Dec 4th '07

Dominant TF: 60mins & Daily.
Swings: DN-DN-DN (from UP-UP-DN)
Market direction: Congestion.

Like other symbols, RUT is also drifting down.

60mins: Congestion.
Again, MTFS points towards a congestion with lower bias, but now that PR1 seems broken, there may be some acceleration to the next support level, close to 757 or even 750.

Daily: congestion
This early MTFS crossover is very seldom conducive to a definite change in direction (typical failed recovery pattern). A congestion is likely, and RUT should try and find a stronger base for support.
RUT indeed seems to show evidence of a cycle turning point, so any retracement should be limited (757, and 750 in the worst scenario).
Note: the cycle detection also gives us a dual frequency with a momentary congestion due to phase opposition.

Weekly: return to the trading range, but lower bias still.
We're now back in our [750-875] range, and still pretty much directionless. It seems that the 'double top' scenario is now a little more remote, but we should wait for the bar to at least change colour first. Until then the bias remains down.

Market Outlook SPY for Dec 4th '07

Dominant TF: 60mins & Daily
Swings: DN-UP-DN (from DN-UP-DN)
Market direction: congestion.

SPY is hovering between levels, and only has lost all positive energy, hence is drifting.

60mins: congestion to mildly down
One can only anticipate the same moderate price erosion until support is found. Despite being the dominant time frame, there isn't much to read in MTFS and Entropy except there isn't much downward pressure either.

Daily: congestion to mildly up
Similar situation as yesterday:
With now both 60mins and daily chart with equivalent significance levels, and a MTFS pattern that is typical of a failed recovery, it is not easy to make head or tail of this market. Entropy on both charts also aim at different directions.
We now have to wait for a pattern to develop, possibly a cup & handle formation. There is however no downward pressure right now, so difficult to estimate where a stronger support level will be found. At the same time, we also have to reach 150 again soon otherwise the 'failed recovery' pattern will become a more likely possibility.

Weekly: congestion - very low significance level.
This time frame has such a low significance level it is almost pointless reading it. We can only rely on the Swing indicator as well as MM and Fib levels. For the time being, it is safe to say that we are in a broad trading range with a downward bias. Failure to pass the 150 strong resistance level would become alarming if significance level wasn't so low.

Market Outlook NDX for Dec 4th '07

Dominant TF: 60mins, but 15 mins charts
Swings: DN-UP-UP (from UP-UP-DN)
Market direction: Good recovery potential but lack of energy in the short term.

Not far off yesterday, and a retracement of 1% can be be seen as moderate when it comes to NDX.

60mins: congestion to mild retracement.
Continuation of price erosion until a support is found. Despite closing at 2067, 2070 may hold, otherwise a little lower to next MM/Fib level. There is however no real downward pressure.

Daily: mildly up
Similar analysis:
The daily chart shows the clearest pattern of all 3, but unfortunately isn't the most significant time frame, so may find it difficult to reach its target in the short term. Again this pattern only has a limited upward potential because of the low green line. It is only if/once 2125 is passed that NDX will likely return to the overall bullish trend and reach Fib targets (2140 first), with 2250 being very significant (strong MM resistance as well).
Note: a pivot 5 is being detected on 2125, so failure to reach 2125 may soon translate into a down swing.

Weekly: trading range
NDX is firmly back in its channel. However current movements are too fast for this time frame at the moment, explaining the low significance level (53%).

Market Outlook NDX for Dec 3rd '07

Dominant TF: 60mins, but 15 mins charts
Swings: UP-UP-UP (from UP-UP-DN)
Market direction: Good recovery potential but lack of energy in the short term.

Spot on: congestion was indeed expected after almost the 2125 MM target.
Again the high level of volatility then allowed a significant retracement.

60mins: congestion to mild retracement.
After reaching for 2125, NDX fell right down to Fib PR1.
There is however no positive energy to have any strong bounce on this Fib level, so NDX should remain in the same [2070-2100] trading range with a mild lower bias.

Daily: mildly up
The daily chart shows the clearest pattern of all 3, but unfortunately isn't the most significant time frame, so may find it difficult to reach its target in the short term. Again this pattern only has a limited upward potential because of the low green line. It is only if/once 2125 is passed that NDX will likely return to the overall bullish trend and reach Fib targets (2140 first), with 2250 being very significant (strong MM resistance as well).

Weekly: trading range
NDX is firmly back in its channel. However current movements are too fast for this time frame at the moment, explaining the low significance level (53%).

Cycle detection - Nov 30th Update

With all the necessary caveats already described extensively on the ts-trading-technique site, here are the calculated cycles at this point in time.

Market Outlook RUT for Dec 3rd '07

Dominant TF: Daily, and 15mins (not shown).
Swings: UP-UP-DN (from UP-UP-DN)
Market direction: Congestion to Up.

Interesting to see that like the other 2 symbols under study, RUT had to reach PR1 and stall level around 780.

60mins: Congestion.
Same as previous post: MTFS Pattern is unclear but parallel and slightly downward MTFS lines tend to indicate congestion, and Entropy has also peaked.
Upward bias might vanish soon. In such case, check Fib support levels.

Daily: congestion to mildly up
This early MTFS crossover is very seldom conducive to a definite change in direction. A congestion is likely, and RUT should try and find a stronger base for support. In some cases, it indicates a failed recovery, but one can assume 750 would offer a strong resistance to bears.
RUT indeed seems to show evidence of a cycle turning point, so any retracement should be limited (757, and 750 in the worst scenario)

Weekly: return to the trading range, but lower bias still.
We're now back in our [750-875] range, and still pretty much directionless. It will be interesting to see whether RUT closes the week over the lower end of the channel (~763). It seems that the 'double top' scenario is now a little more remote, but we should wait for the bar to at least change colour first. Until then the bias remains down.