Weeky Outlook on ER2 14th to 18th July '08

Dominant TF: Daily, Weekly, with 60mins lagging somewhat behind
Swings: UP-DN-DN (from DN-DN-DN)
Market Direction(daily): flat
Options (RUT): no change in outlook for August, i.e. condor outside the 625-750 range.

On ER2, last post was again correct, even if the day started lower. To be honest the jump to 1st Fib target would also suprise me if i hadn't had a short intraday chart open (as recommended also on Friday)

EURUSD: we'll keep an eye at EURUSD not breaking the current lows as this would bring further turmoil to the markets and obviously impact our outlook here.

60mins: congestion, erratic. Shorter time frame recommended.
Same advice as last Friday, i.e. not much to read from indicators at this time frame. This means that one shall either follow pure price patterns or switch to lower time frames for entry/exit points. Reaching 2nd Fib target level is quite possible.

Daily: congestion with upper bias at first.
MTFS lines are diverging indicating an attempt to break the fall. No recovery can succeed with a green line sloping down and crossover came too early. Having said that, ER2 could well reach the 60mins Fib target which is close to the MM pivot here. Conservative traders will have exited their shorts and won't go long just yet as there is still a lot of indecision here.

Weekly: a little bearish but no panic just yet
No 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 overly bearish, the Fib pattern can still fail. We will therefore also look for a possible support level along the way i.e. somewhere between current stall level (656) and strong support level (625).