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...
