Market Outlook RUT for Jan 9th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: probably lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad

60mins: likely congestion or slightly down.
Similar as yesterday and similar to SPY: RUT could hold around MM stall level at 704 or drift to 688.

Daily: congestion to down
While not overly bearish, the current situation with Entropy picking up momentum and steep MTFS lines indicates RUT going lower. It seems that 688 will be hit at some point.

Weekly: congestion to down
RUT has always bounced on PR2 (61.8% Fib retracement) but this time didn't. This confirms RUT is definitely in correction mode at least to previous lows around 670 - 680. We may also find guidance on Fib levels from 2005 or before.

Market Outlook SPY for Jan 9th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles: unreliable
Market Direction: probably lower still
Position:
Short: nothing wrong taking profit around coming support level
Flat: be patient
Long: you must be mad

60mins: likely congestion on stall level or slightly down to support level.
Similar as yesterday: SPY fall stopped on MM stall level around 139. The overall environment remains fairly bearish but Entropy is not so strong anymore. The strong MM level remains 137.50.

Daily: congestion to down
Similar to yesterday:
Like with NDX, we are surprisingly not in a very bearish environment just yet. SPY should drift further down to 137.5. There is no clear indication of a bottom in the near term. The 139 stall level shouldn't hold, so we'll have to watch for 137.5 or possibly the 136 Fib target.
SPY has the potential to go lower, but negative pressure could exhaust within a week or so.

Weekly: congestion to down
This time frame has been out of sync for a while, but we shall notice the previous lows, which bears should try and test.

Market Outlook NDX for Jan 9th '08

Dominant TF: 60mins & Daily
Swings: DN-DN-DN (from DN-DN-DN)
Cycles (DomTF): have been turned off as too unreliable in this market
Market Direction (Daily): drifting down
Position (60mins):
Short: nothing wrong with taking profits, but maybe more to come
Flat: be patient
Long: you must be mad!

NDX is now looking for support.

60mins: possible congestion or slower price erosion.
As mentioned yesterday, support held for a while, then bears decided to have a go at it again.
Pattern-wise, MTFS needs better foundation to find support (crossover with a decent gradient in oversold territory), but Entropy is calming down a bit. MM support level is 1875, and we have a Fib pattern on the daily chart (equally significant at 0.88)

Daily: down looking for support.
Same as yesterday: MTFS is driven by its lines gradient right now. Amazingly, MTFS line levels are not quite indicative of a market fall just yet even if it is becoming a little alarming for some.
Again, the overall MTFS pattern is definitily not a conventional one (or close to a 'failed recovery' pattern), so we'll probably stay in a broader trading range until lines finally converge in oversold territory.
Volatility has however already pushed levels pretty wide apart so the next

support level may well be 1886 (Fib target) or around 1875 (MM support level on 60mins chart). MM Stall level is 1904.

Weekly: Channel broke out... what next???
It seems the bull run is now over so we may need to enter a correction mode (check FIb + MM levels)
We should however only note the clear down bias for now, and focus on shorter time frames. Please also note that Swing is still hesitant at this level and could therefore turn up again. In other words, correction mode is not bear mode just yet at this time frame.