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Keene Little : 6/16/2008 12:34:17 AM

I realized I forgot to change the labels for the futures contracts on the pivot tables to the September contract (the numbers are correct). Here are the corrected tables: Link and Link

Keene Little : 6/16/2008 12:29:44 AM

Monday's pivot tables: Link and Link

After the failed bounce on Thursday I thought it would stick on Friday and it did. It looked a little dicey during the afternoon but then the late-day rally pushed the market back to its highs and it looks good for at least a little more to the upside. Using the NDX 60-min chart I show projections for the 2nd leg of the bounce off last Thursday's low for equality and 162% of the 1st leg up (near 1994 and 2026): Link

A 50%-62% retracement of the leg down from June 5th gives a Fib resistance zone of 1984-2001 (price has so far stalled just under the 38% retracement near 1968. As shown in dark red, this bounce could set up a very strong decline to follow and therefore it will be worth testing the short side if resistance looks like it will hold. Otherwise there are bullish possibilities, especially if it can rally above 2026.

The daily NDX chart shows the potential to rally above 2100 if it can break above 2056 but clearly there's a lot of work for the bulls to do before getting there: Link . The SPX daily chart shows a lot of bullish potential up to the 1460 area (pink) but first it has to break back above the October downtrend line (near 1364), then where it will have two equal legs up from Thursday's low (1372), its downtrend line from May 19th (1385) and then a couple of Fib levels in the 1387-1389 area:
SPX daily: Link
SPX 60-min: Link

The market is set up for a bounce and it could become bullish through opex week. But if at any time the current bounce off Thursday's low fails and the market drops back down below those lows it will be lights out for the bulls. At least that's the setup from an EW perspective--it's set up for a very bearish hard-selling decline if that happens. So let's see what the bulls can put together this week. In the meantime I'll be testing the bounce to see if it's ready to roll back over.

OI Technical Staff : 6/15/2008 9:59:59 PM

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