Market Outlook NDX for Jan 8th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): possible upturn but unreliable significance level
Market Direction (Daily): drifting down
Position (60mins):
Short: nothing wrong with taking profits, but maybe more to come
Flat: be patient
Long: you must be mad!

NDX could pause at this level, or even hold the position until negative pressure is exhausted. We are however more likely to see NDX coming down still. The market is not the easiest to read on account of various expectations on forthcoming rate cuts.

60mins: possible congestion or slower price erosion.
As mentioned yesterday, NDX found support on 1938 and even picked up a bit on the last hour of trading to close at stall level above 1950. NDX may hold at this level but this is unlikely to last long.
We know that such MTFS line crossover pattern is not conducive to recovery and Entropy has not bottomwed yet.

Daily: drifting down looking for support.
MTFS is driven by its lines gradient right now. Amazingly, MTFS line levels are not indicative of a market fall (Entropy either actually), so the 1938 support level may hold.
The overall MFS pattern is not a conventional one (or close to a 'failed recovery' pattern), so we'll probably stay in a broader trading range until lines finally converge in oversold territory.
Volatility has however already pushed levels pretty wide apart so the next support level may well be below 1900 at around 1875.

Weekly: Check channel's lower boundary
We should only note the clear down bias for now, and focus on shorter time frames. Please also note that Swing is still hesitant at this level and could therefore turn up again.