Thursday, July 10, 2008

Market Snapshot for ER2 (RUT) - Jul 10th 2008

cf. SPY post below for guidance.

NB: This is the last *FREE* daily snapshot for ER2.

Market Snapshot for NDX - Jul 10th 2008

cf. SPY post below for guidance.

Market Outlook SPY for Jul 10th '08

Dominant TF: weekly, daily, with 60mins lagging behind
Swings: DN-DN-DN (from DN-DN-DN). 60mins Swing is close to toggling up.
Market Direction (daily): congestion to possibly lower still.
Position (60mins): short or flat

On NDX yesterday, i warned that there might be no follow up from the bounce the day before as we were already close to target and indicators did not look strong enough to carry prices higher. Worse still, NDX could now fall way lower...

Back to SPY now: on last post i mentioned a congestion to a possible short term bounce which has not materialised into a recovery. Like NDX and other symbols, SPY looks quite bearish...

Note on EURUSD: same fairly directionless [1.5625-1.57.47] trading range. Shorter intraday time frames are recommended.

60mins: another attack on 125...
Significance level is now quite low, so again one should switch to lower intraday time frame to play reaction on MM support level.
We are certainly in "danger zone" as 125 could break to go substantially lower!

Daily: same fighting over MM support level
As mentioned already, it was obvious the bounce would be short-lived, but the last bar is so bearish that we shall be careful at this level too.
One should not panic however as MTFS white line is rather showing possible congestion. The other MTFS lines are certainly also very oversold, so 125 could well be penetrated even deeply without breaking completely.

Weekly: will 125 hold...?
We've shown that bearish Fib pattern expansion for a while now so what next? A combination of a MM pivot and a Fib target generally provides enough support to enter a congestion period. Secondly, MTFS and Entropy are surprisingly not too bearish either. MTFS is still in "failed recovery mode" and Entropy is moderate in relative terms ((EntBin=-1). Yet, The Swing gradient or "real-time momentum" show a significant potential to take prices lower, possibly to the next Fib target level which is also a significant MM level, i.e. around 113.
For the time being, we'll assume 125 will hold even if momentarily penetrated, but we will also remain cautious and place our puts below the next possible targets for safety. We'll also keep an eye on AccDist or another other volume based indicator in the next few weeks (earnings season again).