Market Outlook SPY for Jun 10th '08

Dominant TF: all 3
Swings: DN-DN-DN (weekly Swing hesitation)
Market Direction (daily): correction
Position (60mins): short to flat (flat to long in shorter intraday time frames)

We haven't taken a look at SPY in a while on account of a bad data quote last week. It seems that last post was correct and those who went short with a 137.50 target made some profit and are possibly still in.
About NDX yesterday, spot on again as we indeed saw a support near recent lows in the morning to then resume the fall to stall level in the 1950s.

EURUSD: soft landing in the short term, but could erode a little more. Direction obviously correlated to oil futures.

60mins: lower, possible congestion
MTFS is indicating a first attempt to stop the fall, but this is probably shortsellers squaring positions near day close. One should see the major 137.50 support tested as resistance or SPY eventually just resuming the fall. In any case, the direction over the medium term seems clear enough. To mitigate this scenario though, only a shift in MM levels will confirm a new battleground, and we'll have to see how 137.50 resists first.

Daily: looking for support
We warned about being careful on key 137.50 level, and we see now the channel being broken and MTFS indicating more erosion, so support level will be found lower, probably near 133. We'll remain very cautious over the medium term even though we don't seem to be back into bearish mode just yet.

Weekly: caution but no panic
The anticipated congestion is now turning into retracement. Like on the daily chart, we will be looking for the same support level keeping in mind this is a crucial configuration as the next pivot level could well develop a down Fib pattern. We would then have a 125 target level.
No panic just yet as we certainly have no indication of bearishness in MTFS and Entropy, so this is only little more than a congestion period at this level still.
We still favour a return to bullish mode over the medium term.