cf. NDX post below for guidance
Tuesday, April 29, 2008
Market Outlook NDX for Apr 29th '08
Dominant TF: Daily.
Swings: DN-UP-DN
Market Direction (Daily): up overall, but volatile still.
Cycles: good fit, and long cycle peak detected
Position (60mins): flat
NDX is crawling up... aiming unconvincingly at 2000. A pause looks more and more likely.
60mins: overbought, trying to go higher
NDX has passed 1900 and is trying to go higher. MTFS is however overbought and if we look at a lower time frame (15mins has a higher significance level), we have a strong resistance in the higher 1930s. A retracement is possible in the short term (cycle peak).
Daily: wavy up...
No major change since last post: NDX is on its way to 2000. The MTFS pattern is now confirmed and should continue until lines meet again somewhere near overbought level. We however notice tht the white line is peaking and EntBin is very high, hence NDX could possibly take a pause in the short term. In the worst case, NDX would test channel lows or back to the 1875 pivot level.
Weekly: a pause on the way up is likely
Like on lower time frames, it is now visible that NDX is aiming at 2000 (MM + Fib). We can however notice that this could leave the bearish MTFS incomplete. While possible, this scenario remains unlikely and a consolidation seems necessary at some point. We'll therefore check for a Fib/MM level (1950?) for a retracement which will help complete the MTFS pattern.
As said earlier, the 2000 level will be key to market direction for the rest of the year.
(May call spreads above 2000 are quite safe)
Sunday, April 27, 2008
Market Outlook SPY for Apr 28th '08
Dominant TF: 60mins followed by the weekly chart.
Swings: UP-UP-UP
Cycles: not a good fit, but low frequency detected
Market Direction (daily): congestion to upper bias
Position (60mins): flat looking for long entry point
SPY bounced on resistance level (tested for support) to now reach range highs again, exactly as anticipated on last SPY post. What next now?
As a note, the last EURUSD post really came spot on as the breakout occurred that same day. We will keep an eye on it as EURUSD is back on the key level and could actually go lower, impacting all other markets starting with crude oil.
60mins: upper bias but hesitation at range highs
SPY is trying to go higher, only stopped by a 1st Fib target and range highs. MTFS looks overbought yet positive, but Entropy is lacking energy to breakout right now. Despite this hesitation, going higher remains the most likely scenario though.
Daily: congestion to upper bias
SPY is now back to year-to-date highs, but could well go higher. MTFS is pointing higher yet SPY could also first find support on MM pivot level (137.50). In such case SPY would aim at the 50% retracement level at 141.70. The MTFS pattern does not however indicate a straight path to 150 but the bias is UP overall.
Weekly: aiming higher
MTFS lines are certainly pointing higher but the pattern itself is not a recovery pattern. In most cases, this kind of pattern announces a retracement at some point. Now that the PR1 Fib level is passed, this may happen on the 50% Fib level or higher, and looking at previous support levels, testing 137.50 could set a strong base going forward.
Friday, April 25, 2008
Market Outlook ER2 (RUT) for Apr 25th '08
Dominant TF: weekly chart, 60mins declining
Swings: UP-UP-DN (weekly swing was previously down)
Cycles: unreliable
Market Direction: upper bias
Position (60mins): undecisive.
Options (RUT):
Short May780 Calls, Long May790 Calls,
Long May550 Puts, Short May560 Puts
We have seen RUT constrained in a tighter range. If we look back a little the trading range since Jan was roughly [650:720], then cut in half [690:720], then now in half again [705:720]. Such situation should end up in a breakout, probably on the up side. We have to try and find out the exact timing for it. We got it right yesterday on EURUSD, didnt we ? About EURUSD, again and again, i repeat that 1.5625 will be a key level for a possible change in trend.
60mins:
ER2 (RUT) is again at range highs, also a strong MM resistance level. The level looks hard to break, yet it should only be a matter of time. MTFS and Entropy are somewhat positive, and we are now closer to a breakout on the upside, but we are likely to first see another round in this narrower trading range.
Daily: same upper bias, but not too convincing
The same last post can apply again today (hasn't changed much in the last week)
ER2 (RUT) is indeed hesitant around range highs. MTFS shows some mild upper bias, but Entropy is so weak there is at this point in time very little indication of a range breakout. The most likely scenario is more congestion (i.e. same higher part of current range) for the time being. Only some new energy (endogenous, i.e. breakout, or exogenous like some economic news) could change this scenario.
Weekly: congestion to down bias
Yet the worst certainly seems over with Entropy bottoming out and the MTFS pattern is 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 fully dissipated, hence a mild negative bias still prevails. The most likely scenario is the same [690-730] trading range. However, in case of a coming breakout on the upside, the 50% retracement level around 750 would be also quite strong. Levels above 750 are quite unlikely in the next couple of months.
Thursday, April 24, 2008
Market Snapshot for EURUSD - Apr 24th 2008
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...
Subscribe to:
Posts (Atom)
