Friday, July 04, 2008

Market Snapshot for ER2 (RUT) - Jul 7th 2008

cf. SPY post below for guidance (MM/Fib levels are symbol specific though)

Market Snapshot for NDX - Jul 7th 2008

cf. SPY post below for guidance (MM/Fib levels are symbol specific though)

Market Outlook SPY for Jul 7th '08

Dominant TF: weekly, daily, with 60mins lagging now
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction (daily): further erosion, but 125 support must be watched carefully
Position (60mins): short

On NDX yesterday, prices kept on drifting as anticipated and end quarter window dressing had little effet on the on going trend. Support will have to be found lower probably around 1820 ... or lower, i.e. right down to 1750.

Back to SPY now: SPY has tried to hold on stall level, tested 125 to hover on stall level again. Drifting to the 125 attractor continued. The strong support level must now be fought...

Note on EURUSD: the strengthening of the US$ on the BCE decision only confirms the same trading range. Oil prices will be key to future direction. 3rd quarter could show some relief on pressure on oil demand. Tough times ahead nevertheless...

60mins: aiming at the 125 "attractor"
Significance level is now quite low, so one should switch to lower intraday time frame to play reaction on MM support level.

Daily: lower, close to target level
MTFS white line is showing possible congestion or even a short term bounce on key level. There is still a lot of negative pressure though so no rush to any sort of recovery.

Weekly: will 125 hold...?
As mentioned previously, this is a crucial configuration as the current Fib pattern could well develop lower. One should not panic just yet even MTFS is not looking too good. This is not a classic bearish pattern, and we may just see a fairly long congestion period if 125 holds. That level could even be momentarily penetrated. Trading may just slow down now for July and August, so it may certainly take some time before SPY turns positive again.