Aussie Index (SPI) 7th FEB 2009 Weekly

"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.

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.

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"

Previous Weekly Report

SPI Weekly

As per Weekly Previous report..... We saw the SPI move up early and then reverse back down.

I was looking for another push down next week on the SPI towards the Monthly lows, but because of the higher move in the US markets on Friday, that 2nd week drive down doesn't look like it's going to happen.

If we had hit the February lows then I think the Australian market was in for a decent reversal upwards of around 25-30%, lead by Financials.

But now with the SPI trading back around the Weekly highs, at this stage 3567 is view as resistance for next week.

SPI Monthly

A per previous Weekly report, I didn't want to see the SPI move up in the first 2 weeks of February, because it doesn't clarify the Monthly cycles.

A Drive down and a reversal off the Monthly lows, and I would have looked for a move back towards the Monthly highs:- 25-30%.

There can still be a move towards the Monthly highs, but I would then look to see if the Financial Index is going to follow a similar pattern:- support 2905.

The Resource stocks are keeping the market afloat, but at this stage I can't see resource stocks doing all the work, it has to be helped mainly by banking stocks following a double Monthly low pattern and move towards the Monthly highs

SPI 5-day pattern

Last week the SPI followed a number of text book patterns.

From the Rise up on Monday Tuesday towards the 5-day highs, and then the reversal back down confirmed with the break of the 5-day 50% level.

A reversal upwards on Thursday back towards Friday's 50% level, and a push lower.

In any normal down trend the market would remain below the 50% level, but because Monday will open higher price should be moving towards the highs again:- Weekly highs resistance.

Posted by