Market Outlook SPY for May 29th '08

Dominant TF: Daily, closely followed by the ther 2 TFs.
Swings: UP-DN-UP
Cycles: still unreliable
Market Direction (daily): Congestion
Position (60mins): flat to long.

On SPY post, I gave support level almost to the tick (137.53). Sometimes markets are easy... We now see some recovery, also visible on other markets. Again, €/$ and oil prices will have to be watched closely.

We have a target of 1.556 then ~1.551 for EURUSD

60mins: recovery to Fib PR1
MTFS is showing moderate recovery potential most likely to PR1 (140.09). However this kind of recovery pattern generally retraces and Entropy is quite weak, so no rush to go long at this time frame (switch to 30mins or lower to grab up to 1/2 point).

Daily: congestion to minor retracement
Again, one should not more than range trading to possible congestion. MTFS and Entropy both show a slight downward bias so we should stay around the bottom of the current range for now. Support at lower boundary (137.50) should hold, and the overall upward trend is still valid over the medium term.

Weekly: recovery is losing steam
No real change from last post. We anticipated this current slowdown which brought SPY back to PR1 around 137.35. This level should hold.
Congestion is therefore likely in the short term. However since we never got full MTFS pattern completion in oversold territory, we will keep a close look at possible formation of new pivot point and next Fib pattern going forward. Although unlikely at the moment, this kind of configuration can also turn around to a down Fib pattern.