Thursday, June 12, 2008

Market Snapshot for ER2 - Jun 12th 2008

cf. NDX post below for guidance.
Note: a similar symbol analysis does not eliminate the need for specific level calculations.

Market Snapshot for SPY - Jun 12th 2008

cf. NDX post below for guidance

Market Outlook NDX for Jun 12th '08

Dominant TF: 60mins and daily (lower intraday TFs also)
Swings: DN-DN-UP (from DN-DN-UP)
Position (60mins): short
Market Direction (Daily): down

Yesterday ER2 went down all day to the 719 target I gave, so quite a straightforward day for daytraders. Clues provided on EURUSD were also about spot on.
NDX went a fairly straight path downhill to even come to an interesting breakout situation...

60mins: lower, but heavy selling should abate today
NDX is certainly quite bearish, and this is also noticeable from prices being below their red paintbars. Such momentum even made NDX go straight through the strong MM support level. The MM trading range we've seen since May 28th is also shifting south with 2000 being a strong resistance level now. MTFS is however a little bit less morose than the overall picture may appear, since the line crossover may indicate a slowdown of the fall and a lower support level coming.

Daily: breakout seems confirmed but no panic
The channel and then the support breakout did not suprise us at all. We all noticed the bullish MTFS pattern (since March) stalling around 2000 without fully completing the pattern. MTFS is now indicating a mild retracement, probably to the next fib level (PR1) around 1908. Since volatility is high, we'll obviously keep a close look at possible lower Fib levels too but the MTFS green line is high and Entropy is mild, so no panic just yet...

Weekly: Congestion at key level, minor upper bias remaining.
Despite current volatility, we see no major change at this level. We're now entering a congestion phase around the key 2000 level. MTFS and Entropy seem to resist fairly well, but significance level being lower, we'll take the current picture with a pinch of salt and concentrate on pure price formations. On such crucial test level, Fib patterns can develop both ways here, even if a downturn still looks unlikely.
Pivot number 3 (2050) could indeed turn into a full downward Fib pattern (target 1700), or could still be erased to take NDX back to last year's highs (>2200). Again the cautiously bullish scenario is still favoured for now and confirmation should come within 3 to 4 weeks. Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators.