XJO Cash Weekly chartsThis Week the SPI and XJO reached the 2008 Yearly lows @ 4538.
This was my down target for 2008, and both hit the level precisely and rallied, as did US markets.
The lows for 2008 have been set, and my expectation is that price will begin a gradual up swing in the next Quarter.
How far the markets will move will depend on Resource stocks in the next Quarter, and then each monthly step formation, with the possibility of moving back towards 5355 over the next 3-months.
As was the case with this year's down trend into 4538:- there is a market path for price to move towards based on higher timeframe dynamics, but price will zig-zag within lesser timeframe dynamics until it gets there, which is often based on each Monthly timeframe.
SPI Weekly:-2 plays for the rest of 2008 based on the lows this week.
A set-up:- Bounce off the Yearly lows this week and moves back towards the September 50% level by the end of this month.
Reverses back down into October 50% level finding support, and then continues higher over the next Quarterly timeframe towards 5355.
B Set-up:- Wild Weekly swings into the end of this month, and markets continue down from October 50% level into the October lows because Resource stocks continue lower , forming a double bottom around October lows, and then markets reverse to close out 2008 higher.
Which Set-up will occur???
I don't know, but Set-up A wouldn't surprise me.
As I have been saying for weeks, the markets had to come down lower in this Quarter before a 3 -month counter -trend move upwards, and finally that completed this week....
However, any UP move in the next Quarter won't stop the inevitable:- globals market will go down into 2009
Therefore how high we close in 2008, determines how far we go down into 2009, and global markets will go down in 2009
