Previous Weekly Peport 2nd Feb 2008
Price Remains range bound between 6040 and the January Quarterly lows....Expectation remains that the market will consolidate between this range until April, with the view of further weakness either from the April 50% level or April highs.
Therefore the current view is:- a 6 week consolidating pattern of rotating UP and Down Weekly timeframes until the closer it comes to the contract expiry in March, before any potential 2nd Wave down....
When we compare the down move in August 2007 and the 'crash-pattern' in 2008, we can see that even though the range lengths are comparable, the 'Dynamics' are completely different.
In August 2007, the Weekly pattern moved into a 'Fake-break' below August lows but then moved back inside the following Week and then rallied upwards.
Whereas in January 2008, it is a 'Crash-pattern', and the breakout in January (Resistance) is confirmed with the February 50%, along with the higher Weekly open reversing down...
The Weekly 50% level next week is going to define the trend @ 5593, and any further weakness this month and expectation is that price has a market path to move down into February lows.
In conclusion: the overall trend is bearish defined by higher timeframe 50% levels, but there is major support around these current lows based on Quarterly Support.
The view is that the Quarterly lows are supporting the Market, and we have just completed a DOWN closing week. Therefore there is a potential of an UP trading week defined by the Weekly 50% level, with a view that price is moving back towards the highs on Friday....Rotating Weekly Timeframes....
Last Week's high probability pattern was the 'Sell' from Monday's highs down, as it follows the overall higher timeframe dynamics.
Next Week's high probability pattern is going to be simply defined by the trend direction of 5585, with an UP bias...
The two previous Friday's rallied after testing the Dilernia Pivot and moved upwards towards the 5-day highs in 1 day....
Yesterday (Friday) didn't test the Dilernia Pivot in early trading, but came down late in the day and tested it and found support. Therefore my high probability pattern is going to be the completion of the rest of the move.
The previous two Friday's rallied towards the 5-day highs, therefore my view is that next Week will move back towards the 5-day highs.
That UP move has a random length, because it might take a number of days to actually complete the move. It could happen in 2 days, or it might take the entire week to get there, but that's the view next Week...
Note: The Overall Trend is down, and the potential to continue down and follow February lows lower is a high possibility, but that's not my high-probability pattern, my HP is to move up from 5585 and continue higher.
If it takes a number of days to get to the 5-day highs, then the R44 spiral bottoms will play important trading levels along the way....
An Ideal 'Position-Swing' trading set-up, is to remain 1 lot long all the way, but have trading contracts using partial exits, and re-enter using spiral bottoms...
If it moves down on Monday below 5585, then it's back to short-term 'RISK' trading, using timeframe levels and Spiral points.... but that's not my view on Monday....
We will know how valid any UP move is going to be, because the first valid confirming price action is not only rising upwards on Monday from 5585, but getting back above the 5-day 50%.....
At this stage my view is a consolidating market trading between 5-day ranges, therefore once it get to the 5-day highs, we are looking to 'sell' down again using higher timeframe resistance levels..
Please Refer to the Daily Reports......
