Monday, June 30, 2008

Market Snapshot for ER2 (RUT) - Jun 30th 2008

cf. NDX post below for guidance.

Market Outlook SPY for Jun 30th '08

cf. NDX below for guidance

Market Outlook NDX for Jun 30th '08

Dominant TF: 60mins, Daily, but would also follow 15mins
Swings: UP-DN-DN (from DN-DN-DN)
Position (60mins): profit taking, or still short
Market Direction (Daily): drifting down

Yesterday's forecast for ER2 was again accurate with the fall stalling on the mid 690s, however no recovery in sight just yet...
About NDX, last post insisted on looking at pure price patterns such as Fib and MM levels, as support levels are not easy to determine and do not coincide across time frame seems. We should see portfolio readjustments and repositioning over the next few weeks as earnings come out.

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60mins: volatile, but congestion with lower bias overall.
There are several possible scenarios and on account of likely window dressing for 2Q08, institutionals may move the market up or down today.
Technically, we do not have a recovery setup in MTFS so despite some buying and possible testing of the MM pivot level, NDX may resume south later on in the day. Switching to a 15mins TF (dominant) would help.

Daily: continuation of price erosion until support level is found
MTFS is somewhat bearish but Entropy may bottom out in the next couple of days, so again, if we except for spurrious volatility in the short term, NDX should try and find support on Fib PR2 near 1816... or lower...

Weekly: Looking for buyers
No major change from last post: Again it seems the buyers are waiting for a support level to get back into the market (or are they on holiday already?). Bars have turned decidedly red, the Swing indicator toggled back to Down and Entropy has peaked. However MTFS despite showing a "failed recovery" pattern, is not quite indicative of a market fall just yet. We do acknowledge however that the last bar being very bearish indicates a lower support level.

Since this is not the dominant time frames, clues will certainly arise from lower time frame indicators, and we will rather focus on price patterns at this level: we will again keep in mind the last high around 2050 could 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 we will remain very cautious until a pattern is confirmed over the next 3 to 6 weeks. Nothing wrong with switching to lower time frames or otherwise enjoying some holiday...