Market Outlook RUT for Dec 7th '07

Dominant TF: Daily, 60mins
Swings: UP-UP-DN
Cycle (DomTF): 128: Avg to Good
Market Direction: Upper bias.

(Read previous general comments on SPY and NDX)

60 mins: upper bias
781 seems broken even though this happened late in the day, and could be reversed within an hour or two. Assuming it is confirmed, the next target is in the low 790s now. Again, the MTFS pattern is not the clearest we've had, so we just have to wait lines finally join. We may have the same kind of wavy climb until the major resistance is reached.

daily: up & bumpy
We have seen the recovery pattern actually materialising after RUT tested 750 again to bounce quickly to current levels. It didn't fail but the possibility was definitely there. Amazing volatility...
It is now proabably too late to see a significant retracement, but one should see continuation of the high volatility environment with possible pauses on the way to 812.

weekly: Directionless
Same situation: range [750-875]

Market Outlook SPY for Dec 7th '07

Dominant TF: 60 mins and Daily
Swing: UP-UP-DN
Cycle: Daily 128: Avg
Market Direction: Upper bias but possible congestion

Same comment as for NDX.
SPY surprisingly passed the 150 level late in the day to almost hit PR2 (151.06).

60mins: Upper bias.
We now have to wait until the MTFS pattern completes in overbought territory. We are in between decision points and the pattern certainly isn't the easiest to read right now. while an upper bias is obvious, congestion on Fib or MM level is more than possible.

Daily: up, but behaviour on 151 must be watched carefully.
As said above, SPY almost reached PR2 (61.8% Fib retracement). MTFS is fairly bullish now, and one can only be a little frustrated it never completed the previous down pattern (crossover in oversold territory). It seems a little too late now to see a substantial retracement, but a pause is quite possible.

Weekly: Upper bias
MTFS is unreadable because of the low significance level, hence one should not pay too much attention to the lines down gradients.
For the time being, higher highs and higher lows are bullish signs, with due caution that moves in the last 6 months have been way too fast for this time frame.

Market Outlook NDX for Dec 7th '07

Dominant TF: 60mins (and lower)
Swings: UP-UP-UP
Cycles: 128:Weak, 64:Average
Market Direction: Moderately up - behaviour on 2125 is key

Uninspired commentators will say that some economic news fueled a 2-day rally, and allowed NDX to prematurely reach a major resistance level in the short term (60mins). The truth is that there are indeed occasions of spurrious volatility which turn targets into attractors. While difficult to detect, such self-induced momenta generally do happen when there is virtually no upward or downward pressure to control them. Intraday traders will have switched to a 15mins chart, while our interpretation remains within the scope we had in mind. More important is what's coming next now that NDX has reached that key level.

60mins: Upper bias, but behaviour on key resistance level may cause some congestion.
The MTFS pattern has not been the easiest to read, with that second bout of rallying starting from median territory. Such moves generally carry little energy, hence it is surprising NDX reached its resistance level so quickly. Now the pattern has to complete somwehow with lines joining either in overbought territory... or oversold territory.
At this point in time, volatility is high in a market that is looking for a pause.
Current target [2125-2133]. Possible longer term target [2185-2190].

Daily: Up, but recovery pattern is weakening a bit in the short tem
Despite this 2-day rally, the MTFS pattern is showing moderate signs of weakness,and while Entropy has been increasing, LEntBin = 4, so is quite high. That would tend to predict if not a retracement, at least a pause in the coming days. Longet term, the 2250 targetis back on track.
In the short term, targets would be easier to predict if MM and Fib levels somehow coincided, but no luck this time... It is not clear whether the upper bias we still have will bring NDX a little higher (2140?) or whether a period of congestion is imminent. No retracement in sight just yet, but we'll have to watch Entropy over the next few days.

Weekly: up...
NDX is half-way in its channel again. We don't have a blue bar yet though.
Surprisingly enough, 2000 is still a major resistance level at this time frame.

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%).