Tuesday, June 24, 2008

Market Snapshot for SPY - Jun 24th 2008

cf. ER2 post below for guidance

Market Snapshot for NDX - Jun 24th 2008

cf. ER2 post below for guidance

Market Outlook ER2 (RUT) for Jun 24th '08

Dominant TF: weekly, 60mins, with Daily declining
Swings: DN-DN-DN (from DN-DN-UP)
Market Direction(daily): short to flat
Position (60mins): short
Options (RUT):
July: 830 is safe on the up side, 625 on the down side. Some will peg their puts lower.

Yesterday's post on SPY proved correct again with the continuation of the lwer bias while the strong 131 support level still holds. On ER2, I advised to move to lower time frames or stay flat for a short while, and direction indeed reversed on June 20th. I hope you also did.

60mins: lower
MTFS is certainly oversold and pointing down yet despite the bearish last 2 bars, 719 is a strong support level which should be fought still. Entropy is only moderately down, and we'll also watch for a possible lower Fib support also. Price erosion may continue in a series of waves with short-sellers buying back their positions and then selling again. Ultimately, support may be found as low as around 700s or slightly lower.

Daily: lower, but support levels must be checked.
MTFS and Entropy remain both relatively undecisive yet with a lower bias. We'll therefore watch pure price patterns such as this Fib/MM support. Should this strong 719 support level break, the next levels are around 702 and 689 with a stall level in between.

Weekly: lower for now... is the tide turning?
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. While remaining very cautious going forward, we still believe a support will be found to eventually take ER2 higher.