Thursday, July 03, 2008

Market Snapshot for ER2 - Jul 3rd 2008

cf. NDX post below for guidance. MM/Fib levels are however obviously symbol specific.

Market Snapshot for SPY - Jul 3rd 2008

cf. NDX post below for guidance. MM/Fib levels are however obviously symbol specific.

Market Outlook NDX for Jul 3rd '08

Dominant TF: Daily, but would also follow 5mins or 15mins
Swings: DN-DN-DN (from DN-DN-DN), hesitation at 60mins level
Position (60mins): short, possible target in sight
Market Direction (Daily): drifting down

Yesterday's forecast for ER2 was again accurate with a "uptick" early in the day as expected, then the fall resuming its course.
About NDX, last post correctly warned on volatility in the short term (window dressing) and also anticipated a continuation of price erosion.

NB: On account of the current market situation, FREE daily snapshots will be provided for another 2 weeks.

60mins: same volatile environment: congestion with lower bias.
There is still evidently a lot of negative pressure in the market but a support could be found in current price area. Shorter time frames have higher significance levels and do point south however, so no unrealistic wishful thinking either as NDX could eventually fall to 1750.

Daily: continuation of price erosion until support level is found
Significance level is good at this time frame, where indicators are still pretty bearish. Only price patterns give us a possible support around current lows (MM stall + Fib in the 1810s) so conservative short-sellers will look at possibly taking some profit soon.

Weekly: Looking for buyers
Only a minor update 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 bars being very bearish indicate a likely lower support level although Fib L1 (~1838) may also only have been momentarily penetrated.

Since this is not the dominant time frames, we'll take cues 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 1838 then 1700), or could still be erased to take NDX back to last year's highs (>2200). Again we will remain quite 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...