SET-UP A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower, eventually pushing the market into lower lows in 2009"
Previous Weekly Report
Australian Index Futures (SPI Monthly)
At this stage Global Markets remain in SET-UP A...
And this is far better illustrated when looking at the US markets:- DOW and S&P.
http://www.usindexweekly.blogspot.com/
When looking at the Monthly charts we can see the influence of this timeframe when we define the larger trends of the market and likely direction price will follow:- rotation & extension (trends), Support & Resistance.
SPI Weekly Charts (Daily bars) We can see Support defined in the Monthly chart around November's lows, but it wasn't until price move above the Weekly 50% level 3-weeks ago, that the bias changed and began to rotate towards the Monthly 50% level.
The entire methodology is based on the rotation towards central zones and the extension outward from central zones over a multi timeframe model.The key principles of technical analysis are:- identifying support/resistance and trends.
The key principles of the Dilernia Model is using TIME & PRICE to identify support/resistance and trends, but also understanding that those parameters shift dynamically as TIME moves forward.
The Key Trading set-ups are:- trading from the midpoints outward, as all trends originate from the 50% levels and extend outward.
For day-traders or swing traders we apply the 5-day pattern model and use the same principles :- trade towards the mid points and trade outwards using statistical ranges of the ATR (Average True Range)
In last Week's report :- "I view the market still range bound between the Weekly highs and the Weekly 50% level"....
Price didn't get as high as the Weekly highs but remained range bound and supported above the Weekly 50% level @ 3681.
Next Week:- I'm beginning to feel that the SPI will struggle to move higher, simply based on the price action in the DOW and S&P, and probably move back down towards its Weekly lows @ 3481
