Thursday, January 17, 2008

Market Snapshot for RUT - Jan 17th 2008

Market Snapshot for NDX - Jan 17th 2008

Market Outlook SPY for Jan 17th '08

Dominant TF: Daily
Swings: DN-DN-DN
Cycles: unreliable
Market Direction (Daily): check behaviour on support level
Position (60mins):
Short: exited (short re-entry in lower time frames)
Flat: wise
Long: no way!

SPY certainly looks a little bearish, so the million dollar question now is: is the 137.5 level breaking...? Should we look a little lower for support? Has the market over-reacted?

60mins: a bit of fighting on support level
MTFS has shown attempts to take off over the last week, but we know siginificance level is too low (divergence) to follow them. Entropy may have bottomed, and volatility is so high that SPY can penetrate support level without breaking.
Should we be optimistic though...? No. Just follow shorter time frames for a possible entry, otherwise stay on the sideline until bears get tired.

Daily: congestion to down - but no panic: support can hold!
Last commentary a few days ago is still valid, with an additional information now: MTFS crossover is quite bearish.
Support level can hold obviously if bulls are prepared to go for a bit of fighting. Equilibrium may be found around 136. It is not uncommon to see hesitations between near support levels (MM & Fib).

Weekly: congestion to down
Like on the daily chart, take cues from Fib and MM levels. There is support potential even if the mood is certainly moderately bearish (MTFS and Entropy). I insist on "moderately" as a recovery is still possible.