cf. ER2 post below for guidance.
Please note that from Sept 1st, there will be only 1 free market snapshot each week.
Monday, June 02, 2008
Market Snapshot for SPY - Jun 2nd 2008
Market Snapshot for NDX - Jun 2nd 2008
cf. ER2 post below for guidance.
Please note that there will only be one free snapshot per week from September 1st.
Market Outlook ER2 (RUT) for Jun 2nd '08
Dominant TF: all 3, with a slight advantage to shorter TFs.
Swings: UP-UP-UP
Cycles: none
Market Direction: upper bias, possible congestion on resistance level
Position (60mins): long looking to take profits
Options (RUT): no change, but one could consider moving calls up a bit for safety.
Short Jun790 Calls, Long Jun800 Calls, Long Jun610 Puts, Short Jun620 Puts.
ER2 reached 750 a little quicker I thought on May 29th, but as mentioned in previous posts the rising $ and cooling oil price calmed inflation worries, at least for now.
60mins: upper bias, but serious resistance ahead.
ER2 hit 750 on May 29th and will hit it again as MTFS is still somewhat bullish despite being overbought. Entropy is quite weak though, so the resistance level is likely to hold in the short term, even if it can certainly be momentarily penetrated. A high in the mid 750s is possible before ER2 slows down.
Daily: congestion, but upper trend still valid.
MTFS has been undecisive with an upper bias for a while, which explained the waves we've had (short cycles of 2 to 3 weeks). Entropy is relatively weak also, but remains quite resilient. The MTFS pattern should normally nw show the white line giving up leading to a moderate retracement on this strong resistance level. However the white and brown lines point for some more fighting on the 750 level. We'll therefore have to be a little patient and carefully check ER2's behaviour on this resistance level.
Obviously, EURUSD will keep on influencing markets. The US$ faces some resistance on 1.5333 at the moment, and the major test level now will be 1.5503.
Weekly: still up, but crucial test level right here.
Week after week, blue bar after blue bar, the recovery has been steady to current resistance level (Fib + MM) in the 750s. MTFS has so far failed to complete its pattern and lines still haven't crossed.
While the bias is still up, the most logical scenario at this point is a slow down and possible moderate retracement. A consolidation phase would allow completion of the MTFS pattern, and let ER2 go higher later on.
We'll keep into consideration that this is a crucial phase as the pattern can reverse and on the contrary turn back to bearishness, test of last lows etc. We'll obviously have to first wait for the next pivot point and then the subsequent support level, and this can take up to a couple of months.
Friday, May 30, 2008
Market Outlook NDX for May 30th '08
Dominant TF: 60mins (and lower TFs!)
Swings: UP-UP-UP
Cycles: unreliable
Position (60mins): long to flat (profit taking)
Market Direction (Daily): congestion to upper bias
I hope some of you scored again on indications given yesterday (EURUSD target, SPY target) which could hardly be more accurate.
60mins: upper bias looking for resistance level.
MTFS has about finished its pattern, but there is some remaining upward momentum. Resistance level should now come either on current levels or eventually close to highs hit on May 19th. MM levels have changed, offering more room for NDX to rise. Having said that this move is happening too fast, and stall level is now, strange coincidence, exactly on May 19th highs.
Daily: upper bias but possible congestion
MTFS is showing congestion potential near highs, i.e. near completion of the pattern. Entropy is also weakening fast. May highs will probably be hit again soon, but it is not clear whether they can be passed in the short term.
EURUSD aiming at lower 1.54 first and possible 1.536.
Weekly: Congestion at key level, upper bias remaining.
No major change at this level:
The Fib/MM levels have been slowing down the seemingly irresistible ascension back to former highs. MTFS is still somewhat bullish and Entropy has not peaked yet. NDX may eventually keep hovering around the 2000 / 2010 level for a while, but until MTFS and Entropy actually confirm the slowdown, we will assume a "cautious" positive bias going forward.
Again, i wish to emphacise this is a key level as Fib patterns can develop both ways here, even if a downturn definitely looks unlikely.
Pivot number 4 (2050) could indeed turn into a full downward Fib pattern (target 1700), or could still be erased to take NDX back to last year's highs (>2200). Again the cautiously bullish scenario is still favoured for now and confirmation should come within weeks. Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators.
Thursday, May 29, 2008
Market Snapshot for NDX - May 29th 2008
cf. SPY post below for guidance. We however certainly take note of specific 2000 level. NDX may reach 2010 in the short term.
Market Outlook SPY for May 29th '08
Dominant TF: Daily, closely followed by the ther 2 TFs.
Swings: UP-DN-UP
Cycles: still unreliable
Market Direction (daily): Congestion
Position (60mins): flat to long.
On SPY post, I gave support level almost to the tick (137.53). Sometimes markets are easy... We now see some recovery, also visible on other markets. Again, €/$ and oil prices will have to be watched closely.
We have a target of 1.556 then ~1.551 for EURUSD
60mins: recovery to Fib PR1
MTFS is showing moderate recovery potential most likely to PR1 (140.09). However this kind of recovery pattern generally retraces and Entropy is quite weak, so no rush to go long at this time frame (switch to 30mins or lower to grab up to 1/2 point).
Daily: congestion to minor retracement
Again, one should not more than range trading to possible congestion. MTFS and Entropy both show a slight downward bias so we should stay around the bottom of the current range for now. Support at lower boundary (137.50) should hold, and the overall upward trend is still valid over the medium term.
Weekly: recovery is losing steam
No real change from last post. We anticipated this current slowdown which brought SPY back to PR1 around 137.35. This level should hold.
Congestion is therefore likely in the short term. However since we never got full MTFS pattern completion in oversold territory, we will keep a close look at possible formation of new pivot point and next Fib pattern going forward. Although unlikely at the moment, this kind of configuration can also turn around to a down Fib pattern.
Wednesday, May 28, 2008
Market Outlook ER2 (RUT) for May 28th '08
Dominant TF: all 3
Swings: UP-UP-UP
Cycles: frequency detected, but poor fit
Market Direction: congestion to upper bias.
Position (60mins): long to flat
Options (RUT): no change
Short Jun790 Calls, Long Jun800 Calls, Long Jun610 Puts, Short Jun620 Puts.
The upward retracement mentioned yesterday was actually a little stronger than anticipated, possibly on account of the long weekend.
About ER2, we also gave the 719 support level on last post. We're now back to pivot level... what next?
60mins: upper bias
MTFS gives some minor upper bias, however we have no clear recovery pattern. Entropy is also quite weak. Some upward momentum is defintely there after a strong day like yesterday, so ER2 may try and crawl back to latest highs. One doesn't however see how ER2 will get there without new energy (exogenous factor like a positive economic news or rising US$)
Daily: congestion, up trend still valid.
Weakening Entropy and undecisive MTFS point towards some congestion. ER2 will probably have a go at 750 again soon, but like on the 60mins chart ER2 is unlikely to pass that test level without some positive exogenous force driving it.
The picture may get clearer later this week. In the meantime, theta is on the side of condor traders.
Weekly: congestion, possible retracement
Again, no change from last post:
While the upper bias is now obivous, the market is looking at pausing soon not only to better complete the MTFS pattern but to consolidate to eventually go higher later on. We will therefore keep a close eye on MM/Fib levels particularly the combination of the two in the lower 750s. Like in lower time frames, the MTFS pattern and the Entropy do not point for a return to the bullish trend yet, so again, it is likely that a retracement or consolidation will be necessary.
We'll keep into consideration that this is a crucial phase as the pattern can reverse and on the contrary turn back to bearishness, test of last lows etc. We'll obviously have to first wait for the next pivot point and then the subsequent support level, and this can take up to a couple of months. We'll have plenty of time to come back to this in future posts.
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