Friday, June 27, 2008

Market Snapshot for SPY - Jun 27th 2008

cf ER2 and NDX posts below for guidance

Market Snapshot for NDX - Jun 27th 2008

cf. ER2 post below for guidance. Market correlations along with analysis of specific Fib/MM levels will provide a clear picture for this symbol.

Note: like for ER2, the MTFS acceleration has been tuned to 0.15 to better fit with price action. I know "curve fitting" seems dreadful to some analysts, but in this case that's exactly what we are looking for.

Market Outlook ER2 (RUT) for Jun 27th '08

Dominant TF: weekly, 60mins, with Daily declining
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction(daily): short
Position (60mins): short
Options (RUT): 625 or lower for July puts.

Yesterday's post on SPY proved correct again, yet some self criticism engages me to admit i expected more short term support (see 60mins section yesterday) while my target (see Daily section) was about spot on.

On ER2, last post was also correct, and here again we see how correlated markets are since both should find support by end of the month. Obviously, we'll see institutionals doing some window-dressing to make their balance sheet look better if they can, hence quite some volatility is anticipated over the next couple of days.

60mins: lower, looking for support.
MTFS is quite oversold, and LEntBin is typically in bounce area (-5) so since ER2 closed yesterday on MM stall level (~696), we may see prices hovering somewhere current lows and MM support level at 688.

Daily: lower, aiming at 688
Significance level was low for bearish MTFS so i retuned it slightly. One could otherwise just follow price patterns. Anyway it seems ER2 is aiming straight at 688 which is a Fib/MM target level. "Retuned" MTFS is not too bearish so that level should hold. Obviously, we would like to see Entropy bottoming too.

Weekly: lower for now... is the tide turning?
No change from last post: 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.