Another pattern that I favour after a 3 week trend, is a Weekly timeframe that actually closes higher, before the trend continues lower the week after in the following Month"
Previous Weekly Report
Australian Index Futures (SPI)
January continues down as part of the 2-month down trend towards February's lows:- Dilernia Principle
As per previous weekly report, I was looking for an UP week before the market continues down in February's lows.
Even though the continuation down into the lows would have aligned nicely with the February 50% level and another 'Thrust' pattern, that might not be the case....
SPI WeeklyThe SPI could continue higher next week into the Weekly highs and February 50% level....
But I was only looking for a 1 week UP move before the trend continues downwards at the start of February.
Basically the Weekly 50% levels will define the trend next week, and which direction the market will take.
Note:- I would like to see the SPI and other global markets continue down into February's lows in the first 2 weeks of the month.
Why?
Because if that can occur it will complete a 2-month pattern in the first Quarter.
And it will probably give markets the first decent bounce for Months.
Even though I think market will go lower in 2009, I'm not factoring lower prices until the 2nd or 3rd Quarter.
Basically I would like to see a drive down into February's lows in the first two weeks, find support and then we could probably get a 25-30% bounce off the lows.
Note:- if the SPI moves up next week towards February's 50% level, markets will probably continue to follow the pattern of rejection and continue to drift lower, as they have for the past 6 months towards the Yearly lows.
