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).

Market Snapshot for ER2 (RUT) - Jul 9th 2008

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

NB: AS THE SAYING (OR HEALTH WARNING) GOES, "FREE LUNCHES CAN MAKE YOU FAT" HENCE END OF DAILY SNAPSHOTS IS PROGRAMMED ON FRIDAY 11TH. IT WILL BE REPLACED BY A FREE WEEKLY OR MONTHLY MARKET OUTLOOK. PLEASE CONTACT ME FOR PERSONALISED MARKET ANALYSIS.

Market Snapshot for SPY - Jul 9th 2008

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

NB: AS THE SAYING (OR HEALTH WARNING) GOES, "FREE LUNCHES CAN MAKE YOU FAT" HENCE END OF DAILY SNAPSHOTS IS PROGRAMMED ON FRIDAY 11TH. IT WILL BE REPLACED BY A FREE WEEKLY OR MONTHLY MARKET OUTLOOK. PLEASE CONTACT ME FOR PERSONALISED MARKET ANALYSIS.

Market Outlook NDX for Jul 9th '08

Dominant TF: Daily, but would also follow 5mins or 15mins
Swings: UP-DN-DN (from DN-DN-DN), hesitation at 60mins level
Position (60mins): long to flat
Market Direction (Daily): congestion

Yesterday's forecast for ER2 was again accurate with my recommendation to take profits and change to a lower time frame to take advantage of the bounce.

This recommendation was also valid for NDX for which i gave a possible support around 1810 three days ago, and even warned short sellers to take profits then.

NB: FREE daily snapshots will come to an end this coming Friday.

60mins: recovery attempt.
Looking at lower time frames, NDX looks engaged into a recovery mode but that is not yet confirmed at this time frame where yersterday's up move may be little more than a short squeeze on support level. 1875 is now a very close target which could certainly be passed to reach a Fib PR1 retracement.
MTFS and Entropy are not yet indicative of a significant recovery but that possibility can nonetheless not be discarded. On account of the average significance level, we will take cues from lower time frames (15mins).

Daily: support may have been found on stall level
Good day yesterday, but certainly not enough to reverse the bear situation we're in for over a month. MTFS is nowhere near recovery mode, so one sould be in a congestion or at best a bounce to PR1. Having said that it may prove enough to stop the blodshed, hence a recovery is quite possible later in the months.

Weekly: Support to be confirmed still.
Despite a good day yesterday, a 2.43% gain in a day is nothing extraordinary with NDX, so again there is little change in our outlook at this weekly level. The support level we may have seen on the daily chart still has to materialise here too. In the meantime the negative bias is certainly still visible.
I said last time that MTFS despite showing a "failed recovery" pattern, was not quite indicative of a market fall just yet and we may indeed just enter a congestion period.

Valid notes pasted from last post: 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...

NB: i increased the Swing search parameter to improve Swing Quality (SQ from 56% to 86%)

Market Snapshot for SPY - Jul 8th 2008

cf. ER2 post below for guidance. MM/Fib levels are obviously symbol specific.

Market Snapshot for NDX - Jul 8th 2008

cf. ER2 post below for guidance. MM/Fib levels are obviously symbol specific.

Market Outlook ER2 (RUT) for Jul 8th '08

Dominant TF: weekly, Daily, with 60mins declining
Swings: DN-DN-DN (from DN-DN-DN)
Market Direction(daily): short
Position (60mins): short, looking at a possible exit point.
Options (RUT): 625 or lower for July puts (625 is very likely to hold).

Yesterday's post on SPY proved correct again, with some support on stall level. This fall has really been a trading bonanza for over a month.

On ER2, last post was also correct ("lower, lower...", and... not sure we've seen the end of it just yet... This post will therefore very much look like the previous one until we clearly see a clearer target.

60mins: lower significance level
Same recommendation as last time. We will use a lower TF (15mins) to probably check for a possible target (nothing wrong with taking profits) or "play the channel" bounces and/or breakouts.

Daily: lower, lower...
ER2 shed over 100points in a few weeks, and we would like to see a target, so where is it? It could be around 640 where prices bounced earlier this year, but again we would have to see Entropy bottoming up and MTFS line gradients flattening near oversold zone. It will take at the very least a few days, but having said that, the fall may slow down or even enter a congestion period near lows.

Weekly: bearish but no panic just yet
No major change from last post. As mentioned previously, we are now seeing the development of a down Fib pattern aiming straight at MM support level (~625). Since the MTFS pattern is not so bearish, the Fib pattern can still fail. We will therefore also look for a possible support level along the way i.e. somewhere between current stall level (656) and strong support level (625).

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.