Market Outlook NDX for May 5th '08

Dominant TF: Daily
Swings: UP-UP-DN
Market Direction (Daily): up overall, but volatile still.
Cycles: unreliable
Position (60mins): long but target in sight

NDX has been overbought for a while, and we kept being surprised by the continued rise, like an irresistible attraction to the 2000 level. I admittedly expected a pause on the way to the resistance level which didn't happen. Now let's have a look at the current situation now that we have reached that level already.

60mins: overbought, but the bias is still UP
NDX is overbought but is attracted artificially by the 2000 level, cancelling all potential retracement attempts. NDX could hit 2000 again, even several times, but a pause is now likely at this level. We will keep an eye on shorter time frames (15 and 30mins) as well as on EURUSD, and until then the bias remains UP.

Daily: up but congestion is likely around 2000
Again, no major change since last post. We now have to wait for the MTFS pattern to complete when lines meet. Entropy is very high so point for some minor retracement or even just some congestion as MTFS lines are quite bullish.

Weekly: Resistance level around 2000
The Swing is still down, in agreement with MTFS which is still only in an upward retracement mode.
This confirms the scenario whereby the 2000 area should remain a strong resistance level (Fib + MM).
A (moderate) retracement would not suprise us before passing the 2000 level later on, as this would allow the MTFS pattern to complete and the Swing indicator to toggle up.