Here is a snapshot on EURUSD, which may breakout on the downside. Maybe a little too early to say, but always interesting to watch in realtime...
Thursday, April 24, 2008
Market Snapshot for EURUSD - Apr 24th 2008
Market Outlook NDX for Apr 24th '08
Dominant TF: 60mins.
Swings: UP-UP-DN
Market Direction (Daily): up overall, but volatile still.
Cycles: good fit, but not reliable (high noise level)
Position (60mins): flat or long with tighter stops
NDX reached its Fib target (OP), and as expected on last NDX post, found some support on MM pivot to stall at Fib level again. What next?
60mins: overbought, trying to go higher
NDX is hesitating at this level. This is also visible with a MTFS pointing higher while overbought and Entropy being quite weak.
New energy (economic news, breakout) will be needed to make NDX aim at 2000.
Daily: upper bias, but resistance level.
The daily chart also shows a Fib target level around 1910. The MTFS pattern looks fairly positive but since we have a high Entropy level (EntBin = 4), we shall remain careful. Entropy is showing a lower high, and if the MTFS white line also peaks while other lines lag far behind, a retracement would be certain. We will therefore watch our indicators as well as NDX behaviour on resistance level carefully. Until then the bias is still positive.
As a note, any retracement would just be a slow down on the way to 2000.
Weekly: patience...
Like on lower time frames, it is now visible that NDX will try and aim at 2000 (MM + Fib). However, unless the MTFS pattern evolves dramatically, there is very little chance that we switch back to bull mode, i.e. a pullback is almost certain either before or after hitting 2000 (the swing indicator has not toggled up yet either)
This is an important clue that call spreads above 2000 is quite safe.
As said earlier, the 2000 level will be key to market direction for the rest of the year.
Wednesday, April 23, 2008
Market Outlook SPY for Apr 23rd '08
Dominant TF: 60mins followed by the weekly chart.
Swings: DN-UP-DN
Cycles: good fit, but unreliable still
Market Direction (daily): congestion to upper bias
Position (60mins): flat
It was indeed probably a safe thing to take profits (on the 60mins chart), as SPY retraced a bit on MM level, exactly like NDX (cf. post 2 days ago). All in all charts are not too difficult to read at the moment.
60mins: hesitation at resistance level
SPY penetrated the MM resistance level then took a breather to now test it as support. Although MTFS looks slightly negative, we shall favour a positive bias at least in the very short term. The 30mins chart (not shown here) is also pointing higher.
We however have no indication of a range breakout yet.
Daily: congestion to upper bias
Mild upper bias, but certainly not the best looking MTFS pattern ("low-rev 2nd gear"). Like on the 60mins chart, we have no indication of a range breakout yet, so despite the current upper bias, we'll keep an eye on SPY's behaviour on range highs.
Weekly: recovery still stopped on Fib PR1
Entropy is improving indicating more and more clearly that the worst is probably behind us. Yet we have to see how SPY behaves on PR1 Fib level (38.2%). Significance level is high on the MTFS, indicating we're still in 'soft landing' mode rather than in recovery mode, hence SPY should stay in the 130s for some time still. Should PR1 break, SPY will stop one Fib level up, but since the MTFS pattern has not completed in oversold mode, we may see some volatility ahead.
Tuesday, April 22, 2008
Market Outlook ER2 (RUT) for Apr 22nd '08
Dominant TF: 60mins and weekly chart
Swings: DN-UP-UP (weekly swing was previously down)
Cycles: good fit, and possibly reliable
Market Direction: up
Position (60mins): overbought, undecisive.
Options (RUT):
Short May780 Calls, Long May790 Calls,
Long May550 Puts, Short May560 Puts
April positions expired positive. Little has changed since last post (which proved correct), ER2 (RUT) is still hovering around range highs.
60mins:
ER2 (RUT) is still at range highs, also at strong MM resistance level. This level may be hard to break but MTFS indicates ER2 not giving up just yet, even if Entropy is now very weak. Should the cycle indicator prove right, we would also be close to a peak. The MM range has narrowed to [688:719] about a week ago (upper half of previous range). This congestion may lead to a sudden breakout later on.
Daily: same upper bias, but not too convincing
The same last post can apply again today.
ER2 (RUT) is indeed hesitant around range highs. MTFS shows some upper bias, but Entropy is so weak there is at this point in time no indication of a range breakout. The most likely scenario is more congestion (i.e. same higher part of current range) for the time being.
Weekly: congestion to down bias
Yet the worst certainly seems over with Entropy bottoming out and the MTFS pattern about complete. The last few blue bars complete the picture.
To be on the safe side though, we will recognize that the MTFS while having an upper bias could well indicate some congestion at this low level still. We will wait for the MTFS pattern to complete now until then the downward pressure is dissipated, hence a mild negative bias still prevails. In case of a coming breakout on the upside, the 50% retracement level around 750 would be also quite strong.
Sunday, April 20, 2008
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