Market Outlook SPY for Oct 12th '07

Dominant TF: Daily
Swings: DN-UP-UP
Market direction: Congestion. Upward bias still valid.

60mins: Testing support on 154.65. Possible congestion.
It seems that NDX's madness triggered that profit taking on stall level. SPY is also teetering with all time highs so was also subject to profit taking.
Lower time frames seem to confirm that 154.65 has to be tested (MM + Fib). It is too early to anticipate contagion and broad selling pressure.
Entropy is however quite low, so one may enter a trading range [154.50-156-50] for the time being.
Should 154.65 break, the next Fib levels coincide with MM levels: 154, then stronger on 153.15

Daily: congestion to mildly UP.
AdStoK is so overbought that this little hiccup of yesterday had to happen. I personally was looking for a trigger point within a few days, but NDX's quick run to stall level precipitated nervosity and selling.
Entropy is still fairly high, and AdStoK while overbought is not pointing to any strong retracement.
We should have some increased volatility in the next few days, then a direction should emerge as a breakout of the [154.50-156-50] trading range.

Weekly: mildly UP.
The Swing indicator is now more firmly up, but the key swing price level is still close at this time frame.
Entropy is slowly looking better, and the trend should be at least mildly up until AdStoK lines cross.
So, for the time being, no visible change in market dynamics coming.
One will have to keep an eye on AdStoK when lines cross, as there is a chance of divergence in this indicator with lines joining at a lower level than prices (double top later on?).