Market Outlook SPY for Mar 11th '08

Dominant TF: 60mins, but weekly chart picking up fast.
Swings: DN-DN-DN
Market Direction: down, down, down... yet a support level remains a support level until it is broken. Let's avoid reading too much "gloom & doom" into current charts, and just analyse what charts really tell us and nothing more.

We observed the breakout announced 3 trading days ago on the 60mins chart, and we are since looking for a support level... Nothing can really stop SPY before the 125 level now.

60mins: again looking for support
SPY has almost gone straight down for over a week, so this is the ideal situation for a stall level (reminder; it is half way between the current "white dots" mild support and the the strong MM support at 125). The stall level this time is also close to January lows.
MTFS remains very bearish and could develop a divergence. No positive indication from Entropy either. Now since we saw the MM levels coming down 2 days ago, we have to aim for 126.40 then 125, but we can't really read more into the current chart.
Basically, no recovery in sight, and wait for a pattern to maybe develop on next support level.

NB: we left the cycle indicator on, just to show how erratic cycles can be. At this point in time, the noise level is too high to trust them. It goes without saying that this applies to any cycle detection indicator you may have acquired from popular vendors...

Daily: bearish
MTFS has shown the typical "failed recovery" pattern for a few days. In such situation, SPY can only return to previous lows... or lower. Entropy looks quite bearish, but we will give 125 a chance still. Without being overly optimistic, one can never discard 125 holding.

Weekly: bottom?
For the last few weeks, SPY has been hovering around the low to mid 130s, but we could clearly see that it had no energy to pass the first significant Fib level on the up side and both MTFS and Entropy have always remained quite bearish.
As we have said for RUT and NDX, the patterns must now complete and only a drop or a congestion at these low levels can bring MTFS to oversold levels to see a new pattern then emerging. The key words for the time being are therefore a lot of patience and again and again some caution...