cf. ER2 post below for guidance (Fib/MM levels are obviously specific though)
Wednesday, July 02, 2008
Market Snapshot for SPY - Jul 2nd 2008
Market Snapshot for NDX - Jul 2nd 2008
cf. ER2 post below for guidance (MM/Fib levels are obviously specific though)
Market Outlook ER2 (RUT) for Jul 2nd '08
Dominant TF: weekly, Daily, with 60mins declining
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction(daily): short
Position (60mins): short
Options (RUT): 625 or lower for July puts (625 is very likely to hold).
Yesterday's post on SPY proved correct again, with some support on stall level. It seems however that 125 acts as an attractor now.
On ER2, last post was also correct, even if the 688 level has been penetrated quicker than anticipated (i warned on increased volatility). We are certainly going through a lot of tension on EURUSD and oil prices. We are even close to danger zone.
NB: you'll notice brown dots on MM indicator now also showing MM stall levels.
60mins: lower significance level
We will therefore switch to a lower TF (15mins) to probably see a short term bounce (15mins TF) maybe up to a Fib retracement level (~700). No serious recovery in sight just yet, but we'll check for the channel breakout and the swing indicator toggling up.
Daily: lower, lower...
Obviously the bounce on yesterday's low gives some (limited) hope of a short term rebound, supported by a possible bottom on Entropy. Everything else is however still pointing south, so despite a possible congestion over the next few days, support will have to be lower.
Weekly: bearish but no panic just yet
No major change from last post. As mentioned previously, we are now seeing the development of a down Fib pattern aiming straight at MM support level (~625). Since the MTFS pattern is not so bearish, the Fib pattern can however still fail. We will therefore also look for a possible support level along the way.
Tuesday, July 01, 2008
Market Outlook ER2 (RUT) for Jul 1st '08
cf. SPY post below for guidance (Fib/MM levels are specific though)
Market Outlook SPY for Jul 1st '08
Dominant TF: weekly, daily, with 60mins closely behind
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction (daily): further erosion
Position (60mins): short
On NDX yesterday, prices kept on drifting as anticipated and end quarter window dressing had little effet on the on going trend. Support will have to be found lower probably on 1820 ... or lower.
Back to SPY now: Last post was unclear on a support level and anticipated SPY going lower (target 128). To be honest, i thought the 130 area would contain prices in a trading range for at least a short while. It seems SPY is now aiming at 125 again.
Note on EURUSD: we're near the upper boundary of the same trading range, which could certainly breakout sending US$ to new lows. We'll have to watch carefully the market reaction to the BCE decision this week.
60mins: aiming at 125, but stall level right here
MM support level has dropped to 125, with a stall level around 128, i.e. near yesterday's lows.
MTFS and Entropy point for a moderate recovery potential (EntBin is very low), so we may have a up day or some congestion, without any major change in the down trend visible just yet.
Daily: lower
No change from last post:
Bars are still red, and every indicator is somewhat bearish so support will have to be found lower, to a possible 100% fib retracement, i.e. close to year lows.
Our target is MM stall level just above 128. We also have a Fib target in the same area, then MM support at 125.
Weekly: crucial time...
No change from last post:
The retracement is now in place with a Swing indicator now firmly down. We are therefore eagerly waiting to see where the support level will be...
This is indeed a crucial configuration as the last pivot point (144.30) is now developing into a full downward Fib pattern with a 125 target level at first (could go lower!!).
MTFS indeed looks more and more like a failed recovery pattern, confirming this scenario mentioned several times over the last couple of weeks.
Monday, June 30, 2008
Market Outlook NDX for Jun 30th '08
Dominant TF: 60mins, Daily, but would also follow 15mins
Swings: UP-DN-DN (from DN-DN-DN)
Position (60mins): profit taking, or still short
Market Direction (Daily): drifting down
Yesterday's forecast for ER2 was again accurate with the fall stalling on the mid 690s, however no recovery in sight just yet...
About NDX, last post insisted on looking at pure price patterns such as Fib and MM levels, as support levels are not easy to determine and do not coincide across time frame seems. We should see portfolio readjustments and repositioning over the next few weeks as earnings come out.
NB: During summer months, there will be only 1 FREE market snapshot per week. No change for subscription clients.
60mins: volatile, but congestion with lower bias overall.
There are several possible scenarios and on account of likely window dressing for 2Q08, institutionals may move the market up or down today.
Technically, we do not have a recovery setup in MTFS so despite some buying and possible testing of the MM pivot level, NDX may resume south later on in the day. Switching to a 15mins TF (dominant) would help.
Daily: continuation of price erosion until support level is found
MTFS is somewhat bearish but Entropy may bottom out in the next couple of days, so again, if we except for spurrious volatility in the short term, NDX should try and find support on Fib PR2 near 1816... or lower...
Weekly: Looking for buyers
No major change from last post: Again it seems the buyers are waiting for a support level to get back into the market (or are they on holiday already?). Bars have turned decidedly red, the Swing indicator toggled back to Down and Entropy has peaked. However MTFS despite showing a "failed recovery" pattern, is not quite indicative of a market fall just yet. We do acknowledge however that the last bar being very bearish indicates a lower support level.
Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators, and we will rather focus on price patterns at this level: we will again keep in mind the last high around 2050 could 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 we will remain very cautious until a pattern is confirmed over the next 3 to 6 weeks. Nothing wrong with switching to lower time frames or otherwise enjoying some holiday...
Friday, June 27, 2008
Market Snapshot for NDX - Jun 27th 2008
cf. ER2 post below for guidance. Market correlations along with analysis of specific Fib/MM levels will provide a clear picture for this symbol.
Note: like for ER2, the MTFS acceleration has been tuned to 0.15 to better fit with price action. I know "curve fitting" seems dreadful to some analysts, but in this case that's exactly what we are looking for.
Market Outlook ER2 (RUT) for Jun 27th '08
Dominant TF: weekly, 60mins, with Daily declining
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction(daily): short
Position (60mins): short
Options (RUT): 625 or lower for July puts.
Yesterday's post on SPY proved correct again, yet some self criticism engages me to admit i expected more short term support (see 60mins section yesterday) while my target (see Daily section) was about spot on.
On ER2, last post was also correct, and here again we see how correlated markets are since both should find support by end of the month. Obviously, we'll see institutionals doing some window-dressing to make their balance sheet look better if they can, hence quite some volatility is anticipated over the next couple of days.
60mins: lower, looking for support.
MTFS is quite oversold, and LEntBin is typically in bounce area (-5) so since ER2 closed yesterday on MM stall level (~696), we may see prices hovering somewhere current lows and MM support level at 688.
Daily: lower, aiming at 688
Significance level was low for bearish MTFS so i retuned it slightly. One could otherwise just follow price patterns. Anyway it seems ER2 is aiming straight at 688 which is a Fib/MM target level. "Retuned" MTFS is not too bearish so that level should hold. Obviously, we would like to see Entropy bottoming too.
Weekly: lower for now... is the tide turning?
No change from last post: As mentioned on other symbols, the eventuality of a pivot level around last highs (765) makes this configuration crucial as a Fib pattern can develop both ways in the coming months. While remaining very cautious going forward, we still believe a support will be found to eventually take ER2 higher.
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