cf. SPY post below for guidance
Tuesday, May 20, 2008
Market Outlook SPY for May 20th '08
Dominant TF: 60mins and daily, closely followed by the weekly chart.
Swings: UP-UP-UP (hesitation at 60mins level)
Cycles: still unreliable
Market Direction (daily): upper bias overall but volatile.
Position (60mins): flat (too volatile at this time frame). Some will try and enter long on pullbacks around channel lows.
I warned about volatility and the bumpy road to 150, and this comment seems valid still. SPY hit the strong resistance level to then retrace a little.
60mins: volatile
MTFS is calling for a pause at this time frame, so a retracement to lower 142s is possible. Such retracement looks limited anyhow, and we may just see some congestion in the short to medium term.
Daily: upward bias.
MTFS was losing steam at the time of last post, but buyers came back after expiry day and MTFS looks like lines could finally reach overbought levels. SPY should reach 145/146 i.e. stall level in the medium term, and probably 150 later on, but again the volatility could make it a bumpy road.
Weekly: recovery looking for resistance level
Last post was too conservative on this time frame. Blue bars, increasing Entropy and positive MTFS line gradients should indeed indicate that resistance level will be a little higher. We should be now looking at PR2 (61.8%) level or maybe even 150 (less likely). Over the longer term there is no evidence of a straight path to last year's highs.
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