Market "Correction"

A SPY commented chart has been posted over the weekend on the other ts-trading-technique blog: http://ts-trading-technique.blogspot.com/2008/01/are-we-close-to-bottom-on-spy.html

Now, there is no need to analyze market direction, so let's just try and find where support levels will be found:

SPY: 125 first, but Entropy will be SO STRONG on the down side, and has potential to rapidly draw prices to the next weekly support levels (117, 108). 125 is however QUITE STRONG ALSO, so while it can (and probably will) be penetrated momentarily, one should not panic: it could very well hold for now. Let's update the scenario once the initial shock has been absorbed later today.

RUT: Despite being a broader index, RUT has been hit badly by the current volatility (exposure to rates, credit crunch etc). Now support level is somewhat lower at 625, with a possible (yet unlikely) pause at MM stall level around 655.

NDX: Like other indices, NDX now targets 1750.


Again, we have to first see the reaction on those levels, either a strong reaction to try and short-squeeze the bears, or more likely the 'hangover effect', i.e. the market being a little groggy...