Market Outlook ER2 (RUT) for Jul 2nd '08

Dominant TF: weekly, Daily, with 60mins declining
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction(daily): short
Position (60mins): short
Options (RUT): 625 or lower for July puts (625 is very likely to hold).

Yesterday's post on SPY proved correct again, with some support on stall level. It seems however that 125 acts as an attractor now.

On ER2, last post was also correct, even if the 688 level has been penetrated quicker than anticipated (i warned on increased volatility). We are certainly going through a lot of tension on EURUSD and oil prices. We are even close to danger zone.

NB: you'll notice brown dots on MM indicator now also showing MM stall levels.

60mins: lower significance level
We will therefore switch to a lower TF (15mins) to probably see a short term bounce (15mins TF) maybe up to a Fib retracement level (~700). No serious recovery in sight just yet, but we'll check for the channel breakout and the swing indicator toggling up.

Daily: lower, lower...
Obviously the bounce on yesterday's low gives some (limited) hope of a short term rebound, supported by a possible bottom on Entropy. Everything else is however still pointing south, so despite a possible congestion over the next few days, support will have to be lower.

Weekly: bearish but no panic just yet
No major change from last post. As mentioned previously, we are now seeing the development of a down Fib pattern aiming straight at MM support level (~625). Since the MTFS pattern is not so bearish, the Fib pattern can however still fail. We will therefore also look for a possible support level along the way.