Tuesday, June 17, 2008

Market Snapshot for ER2 (RUT) - Jun 17th 2008

cf. NDX post below for guidance

Market Snapshot for SPY - Jun 17th 2008

cf. NDX post below for guidance.

Market Outlook NDX for Jun 17th '08

Dominant TF: 60mins and lower intraday TFs also
Swings: UP-DN-UP (from DN-DN-UP)
Position (60mins): long, target in sight
Market Direction (Daily): congestion to down

Yesterday ER2 broke the 734 resistance level we gave. While the direction was correct, the MM-Fib combination gave 734 more weight, yet it is true that 738 was also a possibility.
About NDX, I admittedly didn't give enough credit to the bounce potential (hence my advice to look at lower intraday TFs), but this does not change our scenario.

60mins: up, target in sight.
On last post, we noticed MM levels shifting south, and NDX bounced quickly to Fib PR1 also close to a moderate MM level. NDX since crept higher and is now on its way to 2000 (also Fib PR2). MTFS shows a relatively straight path to that target. At this point in time, Entropy is up yet not too strong, so we see the 2000 target level and resistance holding.

Daily: congestion, and then...
Despite the last few retracement days, there is little change from last post. MTFS is still pointing down with only the white going flat, and Entropy is also indicating a minor lower bias.
So, after bouncing on Fib level, NDX should remain in a trading range with a lower bias. We also notice a lower significance level so entry/exit points must be found on lower intraday time frames.

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 for the time being, yet we do notice the MTFS white line weakening and Entropy peaking though. 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 4 (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.