cf. NDX post below for guidance.
Note: a similar symbol analysis does not eliminate the need for specific level calculations.
Thursday, June 12, 2008
Market Snapshot for ER2 - Jun 12th 2008
Market Outlook NDX for Jun 12th '08
Dominant TF: 60mins and daily (lower intraday TFs also)
Swings: DN-DN-UP (from DN-DN-UP)
Position (60mins): short
Market Direction (Daily): down
Yesterday ER2 went down all day to the 719 target I gave, so quite a straightforward day for daytraders. Clues provided on EURUSD were also about spot on.
NDX went a fairly straight path downhill to even come to an interesting breakout situation...
60mins: lower, but heavy selling should abate today
NDX is certainly quite bearish, and this is also noticeable from prices being below their red paintbars. Such momentum even made NDX go straight through the strong MM support level. The MM trading range we've seen since May 28th is also shifting south with 2000 being a strong resistance level now. MTFS is however a little bit less morose than the overall picture may appear, since the line crossover may indicate a slowdown of the fall and a lower support level coming.
Daily: breakout seems confirmed but no panic
The channel and then the support breakout did not suprise us at all. We all noticed the bullish MTFS pattern (since March) stalling around 2000 without fully completing the pattern. MTFS is now indicating a mild retracement, probably to the next fib level (PR1) around 1908. Since volatility is high, we'll obviously keep a close look at possible lower Fib levels too but the MTFS green line is high and Entropy is mild, so no panic just yet...
Weekly: Congestion at key level, minor upper bias remaining.
Despite current volatility, we see no major change at this level. We're now entering a congestion phase around the key 2000 level. MTFS and Entropy seem to resist fairly well, but significance level being lower, we'll take the current picture with a pinch of salt and concentrate on pure price formations. On such crucial test level, Fib patterns can develop both ways here, even if a downturn still looks unlikely.
Pivot number 3 (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 3 to 4 weeks. Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators.
Wednesday, June 11, 2008
Market Outlook ER2 (RUT) for Jun 11th '08
Dominant TF: all 3
Swings: DN-DN-UP
Market Direction(daily): up, congestion at first
Position (60mins): short
Options (RUT):
Short Jun790 Calls, Long Jun800 Calls OR
Short Jun830 Calls, Long Jun840 Calls for those who opted for safety
Sudden mood change on June 6th, but those who followed recommendations to switch to shorter time frames just went with the flow.
60mins: retracement slowing down
ER2 is now in a mild correction mode. Fib levels give a possible support around current lows, but ER2 could well drift lower to ~728 (stall level in shorter time frames) or right down to 719 strong support level.
A soft landing is the favoured scenario, but we'll remain cautious as we're in a high volatility environment right now.
Daily: up trend being challenged
We first notice a very alarming candle formation which often leads to a sizeable retracement. A target around 720 (also visible on the 60mins chart) is certainly in the cards. MTFS is not indicative of a fall, but of a congestion with a lower bias, so we believe at this point in time that the coming support level will hold.
on EURUSD, we have a support level just below yesterday's lows and a possible target at 1.5381. A bounce to 1.550 is possible.
Weekly: up recovery is still valid for the time being
We now have a better idea of where the long awaited resistance level actually is. We shall probably see the expected consolidation developing over the next few weeks but while we keep a close eye on a possible pivot level and new fib formation, we still only anticipate a congestion to minor retracement for the time being.
Tuesday, June 10, 2008
Market Snapshot for ER2 - Jun 10th 2008
cf. SPY post below for guidance.
Note: This blog will be updated weekly from Sep 1st. Daily snapshots will be provided to subscribers of the service.
Market Outlook SPY for Jun 10th '08
Dominant TF: all 3
Swings: DN-DN-DN (weekly Swing hesitation)
Market Direction (daily): correction
Position (60mins): short to flat (flat to long in shorter intraday time frames)
We haven't taken a look at SPY in a while on account of a bad data quote last week. It seems that last post was correct and those who went short with a 137.50 target made some profit and are possibly still in.
About NDX yesterday, spot on again as we indeed saw a support near recent lows in the morning to then resume the fall to stall level in the 1950s.
EURUSD: soft landing in the short term, but could erode a little more. Direction obviously correlated to oil futures.
60mins: lower, possible congestion
MTFS is indicating a first attempt to stop the fall, but this is probably shortsellers squaring positions near day close. One should see the major 137.50 support tested as resistance or SPY eventually just resuming the fall. In any case, the direction over the medium term seems clear enough. To mitigate this scenario though, only a shift in MM levels will confirm a new battleground, and we'll have to see how 137.50 resists first.
Daily: looking for support
We warned about being careful on key 137.50 level, and we see now the channel being broken and MTFS indicating more erosion, so support level will be found lower, probably near 133. We'll remain very cautious over the medium term even though we don't seem to be back into bearish mode just yet.
Weekly: caution but no panic
The anticipated congestion is now turning into retracement. Like on the daily chart, we will be looking for the same support level keeping in mind this is a crucial configuration as the next pivot level could well develop a down Fib pattern. We would then have a 125 target level.
No panic just yet as we certainly have no indication of bearishness in MTFS and Entropy, so this is only little more than a congestion period at this level still.
We still favour a return to bullish mode over the medium term.
Monday, June 09, 2008
Market Outlook NDX for Jun 9th '08
Dominant TF: 60mins and daily (lower intraday TFs also)
Swings: DN-DN-UP (from DN-DN-UP)
Position (60mins): short
Market Direction (Daily): congestion - trading range
A lot of volatility lately, hence my recommendation to move to lower time frames in my last NDX post. Again, directional traders are recommended to switch to lower time frames. Nothing wrong with staying on the side line either until the picture gets clearer.
60mins: lower, but beware of spurrious volatility
MTFS is obviously bearish, so is Entropy. NDX is likely to hit recent lows again (~1980) where it will hopefully find support... NDX could actually fall further (stall level ~1955, and strong support at 1938).
We will again follow EURUSD and oil prices for clues on direction and levels.
Daily: congestion to possible channel breakout on the downside
No major 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 channel lows. In case of a breakout, NDX could find support near 1950, i.e. close to possible support levels found on the 60mins chart. Since NDX could also bounce, we will remain cautious or switch to lower time frames.
Weekly: Congestion at key level, upper bias remaining.
No major change at this level:
The Fib/MM levels (2000-2021) 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 in a [1950:2050] range 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 3 (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.
Subscribe to:
Posts (Atom)
