Market Outlook SPY for Oct 8th '07

Dominant TF: Daily
Swings: UP-UP-UP
Market direction: UP until...

Note that SPY is the leading symbol in our index selection (S&P500, NDX and RUT).

60mins: Up until 156.25, then possible slowdown when accumulated energy is evacuated.
The seemingly tamed SPY in a narrow trading range reacted strongly to the news and quickly broke the 154.50 resistance to almost reach the 156.25 resistance which was already visible at the close of the day. We could not however anticipate the strength of the breakout.
AdStok is very strong but could peak soon (check white line) and Entropy is historically very very high. Having said that, it will take at least a few bars to release the accumulated energy, so again we have to see how SPY reacts around the 156.25 resistance level (Fib + MM). A slowdown is more than likely.

Daily: mildly UP until resistance is tested.
Entropy is still quite high, and only slowly declining. AdStoK is giving a last bout to reach very overbought level without lines crossing just yet. This is a bullish situation and one can only expect its continuation i.e. slow steady increase, at least until AdStoK lines cross. We now have to watch how the market attacks this strong resistance level (July highs + MM + FIB (60mins)).

Weekly: mildly UP until resistance is tested.
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 AdStoK white line is clearly showing the "U" shape indicating recovery at least until lines cross.
So, for the time being, no visible change in market dynamics coming (despite expectations of a bumpy October).
One will have to check where lines cross, as there is a chance of divergence in this indicator with lines joining at a lower level than prices (double top coming?).