Aussie Index (SPI) 28 Nov 2009 Weekly

SPI Monthly and Weekly

In the short-term the direction of the Australian Market is going to be defined by the December 50% levels.

Last week I was bullish on the Australian market, but only if US markets (S&P 500) had moved down into the Weekly 50% levels.

http://usindexweekly.blogspot.com/2009/11/dow-s-28th-november-2009-weekly.html

That never happened until Friday's trading, and if the SPI is above the December 50% levels the bias is to move upwards or remain supported.

However, as pointed out in the US market report, i'm looking for larger cycle rotations in 2010...

And if price is below the December 50% levels, the bias is to continue down in the next 3-month cycle (1st Quarter 2010)

Aussie Index (SPI) 21 Nov 2009 Weekly

SPI monthly and Weekly

Is the SPI going to continue higher in December and move towards 4996...

or is the SPI going to continue down and move down into the November lows?

That's going to depend on the price action in the S&P 500 over the next 2 days...

http://usindexweekly.blogspot.com/2009/11/s-500-futures-21st-nov-09-weekly.html

The SPI is in a 3-week sell cycle...

If the SPI was going to go higher it would have closed back above the 3-week cycle highs to once again change the cycle into a BUY.

Normally a change of cycle will move into a 2-period 'stall' pattern and then continue with the trend.


The SPI has now completed a 2-week stall pattern but still in a SELL cycle.

If US markets move down and continue down on Tuesday...

The 3-week sell cycle on the SPI will most likely break the monthly 50% levels and continue down into the monthly lows.

Note:- if US markets continue to remain supported above the Weekly 50% level and Tuesday closes higher...

The SPI will remain above the Weekly 50% levels and mostly likely follow a move upwards.

Aussie Index (SPI) 14 Nov 2009 Weekly

SPI Monthly and Weekly

Last Week’s Friday close above the November 50% levels and 3-week lows along with the expectation that the S&P would move higher early in the week set up a 3-day rally.

"Robust swing points to trade longs from lower prices from next Friday. The trend would continue down another week, but then provide support next Friday and for a large 3-day counter-trend rally back upwards the week after that" 31st October

As pointed out during the week, ideally sell a higher Thursday open or exit longs, as there was an expectation that there would be a 2-day pullback into support levels before any potential higher moves in November.

Those support levels aligned with the 5-day 50% level with buying support on Friday and helped by the S&P 500 having an UP day in the US on Friday.

Whilst price is above the support levels and the 3-day cycle the view is to continue towards the November highs.

If there is a daily close below the 3-day cycle low early next week, then the SPI will probably end up drifting lower and remain in a choppy 5-day pattern and then continue higher the week after that.

I can't see any major selling that's going to effect the SPI over the next 5-days.

A major reversal down would have only occured if Thursday's sell day and Friday had close below the Weekly 50% levels. (back into the November 50% levels)

Aussie Index (SPI) 7 Nov 2009 Weekly

SPI monthly

Last Week saw the market reverse back down into SET-UP A and remain below the 3-week lows (4574) for most of the week until Friday, when price move back this key level closing the Weekly timeframe above.


With price closing higher on Friday and above a number of key levels, (Yearly 50% level 4455, the November 50% level, and the 3-week lows) at this stage I favour the Australian market following SET-UP B, and heading back towards the highs, helped by the US markets following the same pattern.

SPI Weekly and 5-day pattern

"Robust swing points to trade longs from lower prices from next Friday. The trend would continue down another week, but then provide support next Friday and for a large 3-day counter-trend rally back upwards the week after that" Previous US Weekly report

The SPI has tested the Yearly 50% level @ 4455, and is now rising upwards.

My lower Friday pattern ended up a higher Friday pattern, with the cross-over of the 5-day 50% level @ 4561 but I expected far more buying on Friday to be closing near the weekly 50% level and Monday opening above.

Even though I'm bullish from these levels, there needs to be lesser timeframe patterns to validate support:- Price to be trading above the Weekly 50% level, and also breaking out of the 5-day high.

At this stage Monday will be trading near the 5-day high and below resistance, which might see a 2-day stall pattern.