If the market moves down into a ‘blow-off’ bottom in this quarter then I expect a massive counter-trend move upwards back towards the 3-month highs before the next major sell-off down later this year…
If we subscribe to market dynamics and price following TIME and PRICE modelling using my methodology, then YES this can be major support, and Yes markets can reverse upwards, but this time any reversal upwards is going to be limited, and any further move down is going to occur in the forward Quarterly timeframe.... (previous Weekly Reports 19th January)
We got the blow-off bottom this week, followed by a massive counter-trend move upwards.
When we look at market dynamics and the higher timeframe levels, the market looks supported and my expectation that price will remain range bound between the two January levels of 6043 and 5575..
When we look at the reversals in the market from any highs, each sell down is occurring from 3-month highs...therefore any further weakness in the Australian Market and my view is that price will have a better chance of the Market moving lower in the forward Quarterly timeframe from April highs...
In 2007 the market dropped heavily and bounced, and then made higher highs, but that was a corrective move within a Yearly bull-trend based on the Dilernia model.
In 2008 it's different, and I'm still hypothesizing further weakness in the latter part of 2008 because of the Yearly timeframe.
The SPI this week followed the 'Crash-pattern' and reversal back towards the 3-day highs and the Weekly 50% level.
The High in Sycom on Friday was 5927. The Weekly 50% level is 5927.
Price is still trading below January lows, and therefore it's still in a monthly 'downward-break', and this massive reversal is simply a 'dead-cat' bounce within the Weekly timeframe. Until Price moves above the February 50% level then trend remains down.
Next week:- Price will open above the 3-day high break and the Weekly 50% level (5771), therefore it has more chance to move higher with only a couple of days left of 'January-Resistance', price can easily move higher in February towards 6043
However a move under 5771 and price will move back down to 5580 (gap closure and Quarterly support)
Whenever the market closes above the 3-day highs, like it did on Friday, there is always an expectation of a reversal back into the break (5771), and because there is such a large gap to the 3-day lows, a downward move to 5580 is a high possibility before any UP move occurs.
Friday's trading was about price moving upwards into 5771, and all I wanted the entire day was to see a 44 point reversal in the market, and then rise upwards from the lower spiral point...that didn't occur until 5736, and the market took off into the close and back towards the 5-day highs @ 5875...
Next Week:- is about trading down into 5771, hopefully from a higher 44- point top and then see how price reacts to the Weekly 50% level whether we trade upwards towards the February 50% level or down into 5580....
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