Market Outlook SPY for Jun 26th '08

Dominant TF: weekly, 60mins and lower intraday TFs
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction (daily): further erosion
Position (60mins): short

On NDX yesterday, support was found indeed as anticipated, but my short term forecast was wrong as i did not expect a strong bounce. However, this is only a 1-day glitch and the daily trend remains unchanged. I also wish to remind my warning to switch to lower intraday time frames to capture yesterday's move.

Back to SPY now: Last post on June 23rd indicated a possibility of reaching a lower Fib target, yet also insisted on the strength of the current MM support level. We've indeed seen a mild bounce on 131.25 which has some difficulty in materialising into a stronger recovery.

Note on EURUSD: we're in a trading range which could breakout either way. We still favour a scenario of the $ strengthening a bit over the longer term but short term players seem to see it differently. Again we have to first wait for reactions to the Fed meeting next week. There are also more and more rumours of central banks to intervene too.

60mins: looking for direction on support level.
MTFS shows some recovery potential on support level, but it will need to be confirmed first. SPY may test the support level again, as Entropy is too weak to take SPY higher straight away. The overall trend being down, one may just stay in a congestion area from current lows to Fib PR1.

Daily: lower
Bars are still red, and every indicator is somewhat bearish so support will have to be found lower, to a possible 100% fib retracement, i.e. close to year lows.
Our target is MM stall level just above 128. We also have a Fib target in the same area.

Weekly: crucial time...
No major change from last post except that a retracement is now in place with a Swing indicator now firmly down. We are therefore eagerly waiting to see where the support level will be...
This is indeed a crucial configuration as the last pivot point (144.30) is now developing into a full downward Fib pattern with a 125 target level at first.
MTFS looks more and more like a failed recovery pattern, confirming this scenario mentioned several times over the last couple of weeks.