SPI Weekly Chart
The reversal upwards from March lows and the higher move on Tuesday has pushed price back into the 3-Weekly cycle highs @ 5464.
In 'Bear' Markets' price won't spend much time above 5464, and the failure around that high yesterday is an important level and reference point.
5464 could end up being a major resistance level for many weeks, and that will only change once there is a 'friday' close above that level. (March 27th)
SPI Weekly charts 2002-2003
As I pointed out on the 27th March....Above is the Weekly charts in the last down-trend in 2002-2003, and we can see how important the Weekly cycles are in defining the overall trend of the market....
And it was until 2003 (double Yearly low pattern) that the Weekly cycles defined the UP trend reversal, which matches my view of lower lows in 2009.
SPI Daily chart
"January Crash pattern 'breakout' and a 2-monthly wave pattern lower into March lows.
Expectation is now that the SPI will rotate back towards the April 50% levels
March lows were reached and bounced, and the first sign of a reversal taking place was the move above the 3-day highs.
Therefore:- the bounce off the Monthly lows needs to be confirmed with the break of the 3-day cycle highs and then continues higher in the following week using the Weekly 50% level as a trend guide towards the upper Weekly channels. (5443) "..... Previous Weekly Report
This Week was the first time price was able to trade above the previous 5-day high pattern in 2008, and it remained above the 5-day highs all week, with Friday supporting the market.
The Weekly highs @ 5443 played a major resistance level, and the expectation was that price is being pushed down into April balance points before any higher move can take place.
Next week price can go higher, as the Weekly channels have shifted upwards to 5521.
A higher move can take place:- a robust pattern of a test and bounce off the April balance point at the start of the new Quarterly timeframe.
SPI intra-day 5-day chart
Last Week like all Weeks was about using the 5-day levels in the market, along with trading in the direction of the Spiral points.
As you were probably reading the Daily reports, you know that my intra-day shorting levels were 5417 and 5443.
I spent most of the time 'short-trading', and only Friday did I trade my first longs around the Support of the 5-day 50% levels and the breakout above the 5-day highs @ 5343.
Note: As I pointed out in the book, UP trends and volatility drops.
This doesn't change the trading patterns and they way I trade, but it certainly changes the frequency of the amount of trading I do because the range rotations drop.
Hence:- In return the potential profitability drops..
In conclusion:-
The trend remains down and can go lower in the next Quarter, because of the failure of the Weekly cycle highs @ 5464, and the overall bear trend defined by the Dilernia model. (Primary and Secondary timeframes)
But the trend will be clearly defined by next week's April balance point, and a higher move can head towards 5521 next week.
It can also go down if it's trading below the same April balance point.
The next 3-months of trading looks like a major consolidation pattern with a slight UP bias, but there will continue to be resistance levels around any higher Weekly channels using the Dilernia model using market dynamics.
Please refer to the Daily Blog... 'the trader trading"
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