cf. ER2 post below for guidance.
Thursday, June 05, 2008
Market Snapshot for SPY - Jun 5th 2008
cf. ER2 post below for guidance.
However, trading range here is [137.50:140.35] and bias is a little more bearish.
Market Outlook ER2 (RUT) for Jun 5th '08
Dominant TF: all 3, daily TF leading
Swings: UP-UP-UP
Market Direction: upper bias, possible congestion on resistance level
Position (60mins): staying flat, or moving to shorter TFs
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 and stalled on 750 again as anticipated. Theta is on our side and this expected congestion should lead to another straightforward profitable trade.
60mins: congestion on resistance level
No change in the short to medium term. In absence of economic news or external shock (oil, $/€) the same trading range [725:750] should continue.
No clear pattern to read on this time frame. Directional traders are therefore recommended to switch to a lower TF and trade in the direction of the dominant TF (daily).
Daily: congestion, but upper trend still valid.
No major change either at this time frame.
MTFS remains relatively undecisive with an upward bias. Entropy is also very weak.
On last post, i anticipated further testing of the crucial 750 level, and this may occur again so we will watch it very carefully.
At the moment a moderate retracement is the favoured scenario but new energy would certainly pour into ER2 in case of a breakout.
on EURUSD, we'll check 1.5381 then 1.5364 target levels.
Weekly: still up, but crucial test level right here.
No change from last post:
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.
Wednesday, June 04, 2008
Market Outlook NDX for Jun 4th '08
Dominant TF: 60mins (and lower TFs!)
Swings: DN-DN-UP (from UP-UP-UP)
Position (60mins): short to flat (profit taking)
Market Direction (Daily): congestion - trading range
Readers will notice i gave the right direction and support level on SPY yesterday. On EURUSD, shorter time frames are recommended and are very easy to read.
About NDX, i warned of a stall situation 3 days ago. I admittedly didn't venture into a specific scenario, which proved to be a little erratic yet tradable on a 30mins TF.
A lower time frame is again recommended for directional traders.
60mins: lower bias
MTFS is now turning into a down drifting situation. It seems the 2000 level while being a pivot has lost some of its significance and we may now see a trading range. NDX may develop a Fib pattern, however easier to read on a 30mins chart. To mitigate that scenario however, we will notice that Entropy is relatively weak, indicating possible congestion or a slow down drift.
Daily: congestion
No change from last NDX post: NDX is in a congestion phase with a remaining slight upward bias. We will also be cautious about this indecision by checking the channel lows.
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 5 (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.
Tuesday, June 03, 2008
Market Outlook SPY for Jun 3rd '08
Dominant TF: Daily, Weekly, but 60mins falling behind.
Swings: DN-DN-UP
Market Direction (daily): Congestion
Position (60mins): short but target is close.
My last SPY post three trading days ago was spot on, and the indications given on EURUSD proved correct. Same for yesterday's comments yesterday. These snapshots are for the time being provided free of charge, but it is clear that such valuable information should remain relatively confidential. The blog will therefore be locked from September 1st. Contact me for details.
EURUSD: indecision on longer time frames. Opportunities must be found on time frames below 30mins, which cannot be described on a daily snapshot.
60mins: lower bias, possible congestion
MTFS is closing a bell shape pattern, so we may have a soft landing near yesterday's lows or possibly close to 137.5 (strong MM resistance). Entropy may however bottom out within a bar or two, so a congestion scenario is quite possible. We also note that significance level at this time frame is now down to 43%.
Daily: congestion to minor retracement
The situation is similar 3 days ago, and we should still see some range trading or congestion above pivot level at 137.50. MTFS and Entropy indeed both show a slight downward bias to a support at lower boundary (137.50). We shall remain cautious since the Swing indicator toggled down so we'll keep a close look at this key level. We do favour a return to the overall upward trend over the medium term.
Weekly: recovery is losing steam, entering congestion period.
No real change from last post. We anticipated this current slowdown which brought SPY back to Fib PR1 (38.2%) around 137.35. This level should hold for now.
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.
Monday, June 02, 2008
Market Snapshot for SPY - Jun 2nd 2008
cf. ER2 post below for guidance.
Please note that from Sept 1st, there will be only 1 free market snapshot each week.
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.
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