Thursday, June 19, 2008

Market Snapshot for SPY - Jun 19th 2008

cf. ER2 post below for guidance

Market Snapshot for NDX - Jun 19th 2008

cf. ER2 post below for guidance

Market Outlook ER2 (RUT) for Jun 19th '08

Dominant TF: weekly, 60mins, with Daily declining
Swings: DN-DN-UP (from UP-UP-UP)
Market Direction(daily): congestion at first
Position (60mins): flat
Options (RUT):
June positions can be closed or left to expire gracefully.
July condor positions are similar with 830/840 calls.

Yesterday's post on SPY proved correct. We should actually SPY going lower still. On ER2, no real surprise either even if the recovery broke our 734 resistance momentarily to reach a slightly higher Fib target.

With derivatives expiring, a forthcoming Fed meeting and expected interventions of central banks to try and push the US$ higher, there is increased uncertainty in the market, so caution should be exercised at the moment. Having said that, let's now have a look at what the current charts are telling us.

60mins: congestion to lower bias but...
Technically, we see MTFS lines separating generally indicating divergence of forces hence possible congestion. However Entropy shows signs of bottoming up so we may end up in a up Fib expansion pattern (bounce on 61.8% PR2 retracement yesterday).

Daily: same trading range
ER2 remains undecisive in the same [719:750] trading range itself split in 2 halves. With significance level declining, one could be tempted to take cues from lower intraday time frames. My advice however would be to stay non directional or stay cautiously on the side line for the time being.

Weekly: up recovery is now quite weaker
Similarly to the Daily TF, ER2 is here slowing down near resistance level. As mentioned on other symbols, the eventuality of a pivot level around last highs (765) makes this configuration crucial as a Fib pattern can develop both ways in the coming months. For the time being, the current situation is fine for theta players and the bearish scenario is still remote.