Market Outlook RUT for Jan 11th '08

Dominant TF: 60mins & Daily
Swings: UP-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction: recovery needs confirmation
Position:
Short: exited
Long: shorter time frames only

One can note significance level is declining a bit, indicating lower time frames are slowly taking over.

60mins: fall may be over, but no strong recovery just yet
RUT is crawling back to Fib PR1, and we should wait to see what will be coming next. There is some recovery potential, yet one should be cautious and analyse dynamics in shorter time frames.

Daily: congestion
The falls may be over, but one should wait at least for Entropy to find a bottom. At -5, EntBin is very low so this may happen soon. The MTFS shows a 'broken fall' pattern, which is a transition mode only. One can therefore anticipate a trading range in the low to mid 700s.

Weekly: congestion to down
RUT is definitely losing ground and a stronger base would be needed to reassure investors. Testing 680s or lower is quite possible.

Market Outlook SPY for Jan 11th '08

Dominant TF: Daily & 60 mins
Swings: UP-DN-DN (from UP-DN-DN)
Cycles: unreliable
Market Direction (Daily): probably lower still
Position (60mins):
Short: exited
Flat: wise
Long: lower time frames only

One can take cues from RUT or NDX as patterns are quite similar.

60mins: recovery attempt - check resistance levels
MTFS is looking a little better now. SPY retraced up to Fib PR1 (38.2%) and could evel reach the 50% level right on MM pivot level. At the same time, there is little energy left.

Daily: congestion to down
Like with NDX and RUT, SPY had to hit its target, and remains a little bearish. Negative pressure is fading faster than anticipated so a trading range around current levels is quite possible.
One should in any case wait first for MTFS to show a clearer pattern with crossover (preferably in oversold territory) and Entropy to bottom out to consider the fall to be finally over.

Weekly: congestion to down
SPY will now be looking for direction now that lows have been tested again. The bias however remains down, at least until Entropy picks up again.

Market Outlook NDX for Jan 11th '08

Dominant TF: 60mins & Daily
Swings: UP-DN-DN (from DN-DN-UP)
Cycles (DomTF): have been turned off as too unreliable in this market
Market Direction (Daily): volatile with a down bias
Position (60mins):
Short: exited
Flat: wise
Long: risky

60mins: congestion to very moderately up
NDX is crawling up, but is not showing much energy to go significantly higher. MTFS shows a slight up bias, so NDX may reach PR1 just above 1980 though.

Daily: congestion to erosion
NDX took a bit of a breather yesterday, but MTFS and Entropy do still point down. One shall notice that the MTFS white line is tempting an upturn. We should not expect any significant recovery to expect here, NDX should even carry on losing ground. However, the Fib pattern is completed, so we are now waiting for the next event, either test 2000 or or lows again. In such volatile environment both events may occur, yet the down bias should prevail in the end.

Weekly: definite down bias, check Fib and MM levels
It seems the bull run is now over so we may need to enter a correction mode (not bear mode yet though). One can notice that the Swing indicator is hesitant at this level.
Note: this proprietary Swing algorithm differs from conventional algorithms which always toggle in lower time frames first. We are in this instance probably close to a key level at this time frame.