cf. SPY post below
Thursday, March 06, 2008
Market Outlook SPY for Mar 6th '08
Dominant TF: 60mins
Swings: DN-DN-DN
Market Direction: breakout attempt on the down side.
Swing trading on the 60mins chart has certainly been the favorite way to trade for most, particularly those getting bored by the trading range on the daily chart. Being non-directional with a lower bias is still the way to go on higher time frames. We now have to watch whether the trading range will be broken.
60mins: looking for support
As mentioned last time, SPY was a litte exhausted at resistance level. Having said that, we expected a bit of a retracement more than a prompt return to previous lows.
The good thing is that the pattern looks much clearer now. MTFS and Entropy indeed point towards current lows, just below 133, and most problably to MM stall level around 132.
We can note that MM levels have changed though and 131.25 is now a very strong support level, which bears will also try and test.
Daily: back to lower end of trading range.
The big question is: is MTFS current behaviour indicative of a divergence, or will SPY finally recover. The 60mins scenario (dominant time frame) seems to indicate going lower first, and obviously a breakout on the down side is possible.
The current pattern somehow does not quite seem to confirm such bearish scenario, so we'll be cautious and look for a support level soon (cf. 60mins chart). However acceleration on the downside if the current trading range is broken would mean MTFS divergence, and a support level becoming a target around 125. Answer coming soon...
Weekly: bottom?
For the last few weeks, SPY has been hovering around the low to mid 130s, but we could clearly see that it had no energy to pass the first significant Fib level on the up side and both MTFS and Entropy have always remained quite bearish.
As we have said for RUT and NDX, the patterns must now complete and only a drop or a congestion at these low levels can bring MTFS to oversold levels. The key words for the time being are therefore patience and caution...
Wednesday, March 05, 2008
Market Outlook RUT for Mar 5th '08
Dominant TF: 60mins and weekly charts
Swings: UP-DN-DN (UP is unstable)
Cycles: not quite reliable (good turning points but low signal-to-noise ratio)
Market Direction: down, but at a slower pace now. Congestion possible
Position (60mins): would maybe look at exiting short soon at this time frame, to possibly re-enter later since the trend is still down
Options: March iron condor (2wks left). April in place:
Short Mar790 Calls, Long Mar800 Calls, Long Mar600 Puts, Short Mar610 Puts
Short Apr760 Calls, Long Apr770 Calls,
Long Apr570 Puts, Short Apr580 Puts
(again one could also be negative delta)
Advice on the 60mins chart should have made readers a little wealthier as RUT indeed went south. One shall also notice NDX testing pivot level (see last NDX post).
60mins: possible support in the short term
Strange enough, the 688 support level is not quite broken yet, even though lower time frames are already looking at 672, then 656, the latter being quite strong.
MTFS indicate a possible retracement upward, or at the very least some congestion, but no recovery in sight.
The bounce late in the day actually happened on SPY strong MM support level so one shall watch the much correlated SPY for guidance.
Daily: same trading range
Significance level remains fairly low at this time frame. MTFS and Entropy are both slightly down, so on can only hope a support will be found to stop further price erosion. Major MM levels are roughly 32 points apart (same interval for a very long time now), and one can only anticipate a return to previous lows.
Weekly: congestion to down
It seems the pause is over and the trend is resuming down. Support level can be found in the mid 650s (Fib + MM stall level), and both MTFS and Entropy point towards that level.
We can only hope that level will hold then.
Tuesday, March 04, 2008
Market Outlook NDX for Mar 4th '08
Dominant TF: 60mins, then Daily
Swings: DN-DN-DN
Market Direction (Daily): down, unless support is found soon...
Position (60mins): same March condor until expiration. April position should be entered next week.
From top to bottom of the trading range and even lower in a matter of a few days... We knew a breakout would equate to some acceleration which indeed occured on support level at 1750 being penetrated. The bias is assuredly quite bearish, and we're now looking for a bottom...
60mins: bearish but possible pause
MTFS is indeed looking negative, however the white line is flatter and so a congestion or even profit taking from short-sellers may stop the fall for a while. It is a common scenario to see a previous support level tested as a resistance before going lower again. In such case, on could even see 1750 being hit again. The mood is however quite bearish overall.
Daily: will a support be found?
There was a breakout point at 1750, and NDX is now trying to test previous lows. There is a support level at 1688 on the 60mins chart, very very close to Jan 23rd lows, which seems to be the last possible support for the current trading range.
MTFS is not showing any recovery right now, but Entropy does not show much energy on the down side either so one could still hope for mere congestion at this low level, at least for now.
Weekly: again decidedly bearish for now, but 1750 support while penetrated cannot be regarded as broken just yet.
Indeed no reason to be very optimistic right now, but one shall always check MM and Fib levels carefully, and there is always a chance that 1750 will hold if things slow down a little *, particularly if the white line reaches oversold level, where NDX could bounce at least momentarily.
1750 is the last defense line before we enter a bear market. Next support level would then be 1640.
* MTFS has some built-in momentum and can reach oversold level as time simply goes by, instead of only following price action. This means that a congestion at this low level may complete the pattern more or less the same way as a market fall would.
Monday, March 03, 2008
Market Outlook SPY for Mar 3rd '08
Dominant TF: 60mins
Swings: DN-DN-DN
Market Direction: breakout attempt on the down side.
Swing trading on the 60mins chart has certainly been the favorite way to trade for most, particularly those getting bored by the trading range on the daily chart. Being non-directional with a lower bias is still the way to go on higher time frames. We now have to watch whether the trading range will be broken.
60mins: looking for support
As mentioned last time, SPY was a litte exhausted at resistance level. Having said that, we expected a bit of a retracement more than a prompt return to previous lows.
The good thing is that the pattern looks much clearer now. MTFS and Entropy indeed point towards current lows, just below 133, and most problably to MM stall level around 132.
We can note that MM levels have changed though and 131.25 is now a very strong support level, which bears will also try and test.
Daily: back to lower end of trading range.
The big question is: is MTFS current behaviour indicative of a divergence, or will SPY finally recover. The 60mins scenario (dominant time frame) seems to indicate going lower first, and obviously a breakout on the down side is possible.
The current pattern somehow does not quite seem to confirm such bearish scenario, so we'll be cautious and look for a support level soon (cf. 60mins chart). However acceleration on the downside if the current trading range is broken would mean MTFS divergence, and a support level becoming a target around 125. Answer coming soon...
Weekly: bottom?
For the last few weeks, SPY has been hovering around the low to mid 130s, but we could clearly see that it had no energy to pass the first significant Fib level on the up side and both MTFS and Entropy have always remained quite bearish.
As we have said for RUT and NDX, the patterns must now complete and only a drop or a congestion at these low levels can bring MTFS to oversold levels. The key words for the time being are therefore patience and caution...
Subscribe to:
Posts (Atom)
