Weekly Report 24th Nov 2007 Part 3

This market rotation back into support happens throughout the year, and often sends the market upwards for another 2-month wave pattern once the new month begins.

There are two major support levels:- 2007 Yearly high breakout, confirmed with the November 50% level. The current price action at this stage confirms major support around November 50% levels, and often this provides the next 2-month Upward wave pattern. (Weekly report 24th)

29th November 2007...

The Australian Market has been supported around the November 50% level for the past 7 days and the next trend Direction will be defined by the December 50% level.

The direction for the rest of the year is going to be defined by the December 50% level next week. Because what is occurring at the moment is the 2-month wave pattern towards the December highs, with the first rotation the 3-week highs @ 6743.

We can all see that Price is already trading around the 50% level in the forward month, so the trend is going to be defined early, and it’s going to be heavily influenced by US markets reaction to the same levels next week.




The rest of the week is simply going to be defined by the 3-day high @ 6512.

It has defined the trend on the way down each week, and just like US markets, it will confirm the change of trend on the Way UP.

This move back towards the 3-day high is what I was looking for to happen yesterday. I’ve been bullish this week because of the expectation that the closer it gets to December, the more likely the market will move back towards the 50% level.

The next 3-days are going to be very important:- because a robust reversal will see a trending week move higher into a higher Friday close and begin a swing back towards the 3-week highs. (6681)

A pattern that would favor a down move next week would be two more days of rotation below the 3-day highs. Even though Thursday can breakout and move higher, normally the next two days will rotate back into the 3-day lows before the next trend develops.

I can’t see any weakness in US markets until November 50% levels are reached once again(expected resistance), and the next month begins:-

In Conclusion:- Major support in November has been found, expectation of a rotation upwards next week and into the end of the Month before December provides a 2nd wave down into December lows.

Support is only valid for the current timeframe, once November ends and December begins there will be a new path for price to follow and the same support won't be valid. (US Weekly Report 24th)

Please read the Daily SPI Report for Thursday's Trading...

Weekly Report 24th Nov 2007 Part 2

November 28th:- This week has seen the UP move from higher timeframe support zones following the Weekend Report. SPI remains supported around the November 50% level @ 6362.

Major support around the November 50% levels, however the intermediate timeframes are still in a downtrend ( below 3-day highs and weekly 50% level). This was confirmed with the UP move on Monday, but the failure to close above those levels, and then the rotation back down on Wednesday.

13:45pm

Yesterday played that role of filling the gaps on the way upwards on Tuesday, and today it’s playing the role of following the market trend defined by the 3-day cycles and Weekly Trend:- DOWN

Price is now back into Major support at the November 50% levels.

Ideally I would still like to see consolidation into the end of the trading week, providing the better opportunity for short-trading down into the lower levels from December 50% levels.

US markets still consolidating around major November low support zones.

If November 50% level @ 6363 continues to hold for this month, this same level won't be valid for support in December.

Support disappears as Time moves forward.

Trend Direction defined by December 50% next week

SPI Weekly Report 24th November 2007

SPI completes rotation into major support around November 50% level @ 6363, and this is also the 2007 Yearly high. Whilst price remains above the higher timeframe 50% levels, then the expectation is that the Australian market will move higher in 2008 towards the upper levels using Yearly timeframe dynamics.


Australian Index

It would actually be ideal to see a rotation back all the way towards the monthly and Quarterly 50% levels again before the next up move. (6363) (30th September 2007)

The expectation is that the market is now heading down into the November 50% level @ 6363. Expectation of 1-2 day upward moves before Weekly 50% levels and 5-day 50% levels will be resistance and follow the timeframe dynamics lower. (10th November)


This week and the SPI completes the rotation down into the November 50% level (6363) and finds support.

Compare the Australian Market to US markets, and Market Dynamics are completely different.

US markets are in downtrends and also medium-term bear trends (below quarterly 50% levels), whilst the SPI is in a downtrend but has found support around market ‘fair-value’.

This market rotation back into support happens throughout the year, and often sends the market upwards for another 2-month wave pattern once the new month begins, which is just a few days away.

The trend remains intact, and the expectation is that the SPI will move upwards next week, and the December 50% level is going to be the overall guide for the rest of 2007


However is this the beginning of a new wave upward, (Dilernia Principle) or a classic ‘sell’ pattern that often occurs???? (High probability pattern using the Dilernia model into December lows)

And I have seen ‘secondary sell pattern’ many times before.

....................................................SPI Daily chart

Just like the sell-off at the start of November, any UP swing into December 50% level and trader’s have to look for any sign of weakness for the next wave down.

This is a classic bear pattern that can provide traders with an ideal swing ‘short’, but that is going to be confirmed with a higher open, and ‘spiral tops’ to minimize any Risk.

There are two major support levels:- 2007 Yearly high breakout, confirmed with the November 50% level. The current price action at this stage confirms major support around November 50% levels, and often this provides the next 2-month Upward wave pattern.

Short-term:- Expectation is upward next week:- lower weekly closed followed by price rising from a lower weekly open using higher timeframe support.

However, price action in December needs to be verified using the forward monthly 50% levels for trend identification.

The only thing that suggest more weakness is US markets (Dilernia Principle)

For Day trading analysis read the Daily report: the trader trading.

SPI Weekly Report 17th November 2007

For many these October levels might seem support, especially if there is a 2-3 day counter-trend move in the markets next week, but probability patterns often suggest that the price normally follows the model, so the expectation is that November lows are the target before any major rally or support is verified…

Therefore the Weekly 50% levels next week are resistance zones for a continuation move down after any 2-3 day counter-trend UP move. (previous Weekly Report (11th November US report)

What occured in the US was mirrored in the SPI this week. A counter-trend move upwards from Weekly lows back toward the 3-day highs before another Wave down into Friday as it follows the Weekly timeframe pattern and overall target the November 50% levels.

The overall technical pattern is bearish, and this is also confirmed with price trading below the 3-day cycle and Weekly 50% level.

Price target is for 6363.

This level on the SPI is major support in November 2007.

SPI Weekly Report 10th November 2007

The price action on the SPI was the same as in US markets:- Trading below the Weekly 50% level and in a 3-day ‘sell’ cycle on Monday and heading down, but the major moves in the SPI were occurring overnight because of US weakness so day-traders were missing most of the major moves in the market.

The expectation is that the market is now heading down into the November 50% level @ 6363

Expectation of 1-2 day upward moves before Weekly 50% levels and 5-day 50% levels will be resistance and follow the timeframe dynamics lower.

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Day-trading:-

Monday: I was bullish and I used the highs of the previous 44 point range @ 6728 as support and went long. It moved my way for a short time but reversed down and headed down 44 points and much more. I didn’t trade shorts. (stopped out)

Tuesday: Exact same set-up on Tuesday used the previous R44 high as support @ 6617, and move 44 points.. (exit profits)

Wednesday: looking for a downside ‘gap’ to close, so the only thing was to trade ‘shorts’ or not trade all. The Upper pivot of 6721 along with the weekly 50% level 6716 was resistance, but the follow through downside didn’t eventuate to capture a full 44 points. (Exit profits)

Thursday: lower R87 spiral point and expectation that the gaps on the upside would fill, and then the higher Spiral point provided a 2nd trade down. (exit profits)

Friday: Expectation of the lower gaps to fill. It was either trade shorts or not trade at all above 6601. But when the R44 completed upside then a rotation back down into 6601 was expected and hopefully a continuation down confirmed with the break of the 5-day 50% levels, as was with the case in US markets. (exit profits)

And once again Monday will open much lower because of US weakness. For those 3rd lot traders, exiting end of day and not holding overnight we are all missing major moves.

All Day-trading can be found in the Day trading Report

SPI Weekly Report 3rd November 2007

US markets tumbled down this week and found support around their higher timeframe monthly 50% levels.

This move down was forewarned by Weekly timeframe levels showing 'drops' , and support has been verified. Therefore expectation is that early next week the SPI will try and close the upside ‘gaps’, before any weak pattern downisde is goign to happen.

I'm still bullish on the SPI, but technically the market in the short-term is weak.

Friday closed below the 3-day lows, and also the Weekly 50% level.

Monday will open below those levels, and it would need to move back above 6737, otherwise price will move down with a Random length and follow market dynamics lower

November 50% 6363

SPI Weekly Report 27th October 2007

Australian Market supported around the 3-week lows and has moved upwards and towards the October highs once again.

Support was verified around the 3-week lows @ and the market is showing a lower Weekly open moving into a higher weekly close.

At this stage the SPI is still trading below the Weekly 50% level and 3-day cycles, but the Market will open up much higher on Monday due to the US markets moving higher.

The market remains supported, but it will open around October highs once again.

Short-term:- Expectation that the 3-day cycle will change on Monday, but the expectation that the SPI will move in a 2-day stalling pattern with a down bias and retesting the Weekly 50% level again....

Weekly view:- Consolidating pattern but watching US markets if there is a break of the Weekly 50% levels next week, because this will be the first sign that markets could come under and rotating pattern back towards the October and November 50% levels.

US markets are showing 'Dilernia Drops' which is forecasting reverals in the market next week.

SPI Weekly Report 20th October 2007

This week:- Higher weekly open on the SPI and expectation of a 2-day stall rotation down.

2nd day of the rotation breaks the 3-day lows (6744) and heads
into the weekly 50% level @ 6690. This is the first time is a
number of weeks that the 3-day cycle trend has broken. (first
sign of confirmed weakness)

Whenever there is a break of the 3-day lows, the expectation is
that the next day will swing upwards and move into a 2-day
counter-trend move.

Note: 2-day counter-trend move has a random length, it
can consolidate around these lows, or it can easily make it's
way back towards the recent 3-day highs...

The Weekly 50% level
is still verifiying support, and this pattern sends the market back
towards the 3-day highs on Thursday after 2-day 'stalling' pattern


Tomorrow is my ‘sell’ day.

That sell can be from a higher open tomorrow if US markets
move higher, or from a lower open. (18th October 2007_

This Week's Trading is the first time that the overall UP Trend is
open to Risk and October resistance has been confirmed.

Short-positions
will exit on the lower open on Monday, because if the gap and 3-week
low support zones, which often can support the market.....

SPI Weekly Report 13th October 2007

This week has continued higher into the October highs. These highs can form ressitance zones until the end of the trading Month

The Dilernia Model forecasts Trends. The Dilernia Model also defines Support and resistance levels, in this cae the channel highs are resistance levels.

Short-term:- The Daily timeframe is still in a 3-day BUY cycle, the cycle will change with a close below the 3-day lows, however the market is trading above the Weekly 50% level the trend is still UP.

The Weekly 50% level is the guide for any weakness in the markets. Whilst markets are trading around these highs I would expect more rotation and consolidation than any new trends upward developing.

SPI Weekly Report 6th October 2007

Australian Market reeached the September highs and is now moving upwards into the October highs.



With the September highs disappearing this week, the market path is to continue higher into October.

Support was verified this week around the 3-day lows, and until the market remains supported then the view is to head upwards.

A break of the Weekly 50% level will be the first sign that the UP trend is open to risk but i'll come to that when it happens.

Australian Index Weekly 30th September 2007

SPI Weekly Report:-

The Australian Market has completed the 2-period monthly wave pattern into September highs. The target and resistance (6655) is only valid for September.

We can see the movemment into August highs @6255 and now the September highs @ 6655.

With the end of the Quarterly and monthly timeframes, there is a shift in the forward timeframes.The market is now forecasting further moves upward towards 7022 in the next quarter, as price moves in a 2-period Quarterly pattern following the same principles.

Even though there seems to be a lot of bad ‘fundamental’ news around, I think this has already been factored in with last Quarter sell-off. That sell-off in July was forewarned with ‘drops’ in the forward months, and at this stage there are no drops: - therefore I can’t have a view there will be any sustained weakness in global markets just yet.

Last Weeks trending week will hopefully move back into ‘rotation’. The expectation was that price was rising towards September highs, which ended up being a ‘bottom-to-top trading week.

Next week I’m looking for more rotation and far more ‘re-tests’ of the 3-day lows. Even though the expectation is the market rising upwards, I’d expected more down days.

It would actually be ideal to see a rotation back all the way towards the monthly and Quarterly 50% levels again before the next up move. (6363)