SPI Monthly
The SPI has rallied and completed the 'precise' top in July @ 4120
We have seen the past 3 months have the same patterns, and the SPI has moved back down into a rotating pattern, as it moves UP towards 4400 in 2009
Each reversal pattern has also started from a higher Weekly open, and we begin the trading week with a Higher Weekly open next week.
However, even though we have the exact same pattern now as previously, we have to optimise the pattern to each individual Quarter. And this Quarter we have a 'Thrust' pattern that can continue UP as part of the larger trend.....
And follow a 2x monthly wave pattern UP into August, which is coming into 'Reporting' season
SPI WeeklyIt's a simple pattern next week:- if the SPI reverses down then the first reversal Target is the Weekly 50% level @ 3958.
If the SPI continues up next week, then it is towards 4200+ and will hit 4400 in August:- 2 x Monthly wave pattern upwards in the 3rd quarter.
It makes it hard to think it will continue UP if there hasn't been a higher Weekly close above 4120, and the trading week will start from a higher Weekly open.
SPI 5-day pattern
As pointed out in the daily report on Friday, I wasn't expecting too much downside because of the Thursday high Break.
Regardless of the levels in the higher timeframes, the larger timeframe patterns need to be optimised using 5-day pattern recognition techniques;- Dilernia Principles.
Whilst daily patterns and intra-day trading are optimsied using support & resistance along with 'Spiral points' & range trading
And on Monday price should continue UP towards Monday's highs:- 4115-'4130'
normally that will push up 42-44 points.
This is the pattern that we need to see happen if the SPI is going to reverse down....
The SPI can't spend too much time above 4130 on Monday
However, it's not what Monday does, but where Tuesday 'opens'
If Monday stalls around 4115-4130...
Then Tuesday needs to open below the 5-day 50% level @ 4065, which will set-up a move down into the 5-day lows, and hopefully continue down towards the Weekly 50% levels:- higher Weekly open reversal pattern down from Monthly resistance
Otherwise and higher move on Monday could open higher on Tuesday (if US markets move upwards) , and anyone shorting above 4130 will be putting themselves at Risk, as a 3rd Quarter Thurst pattern will breakout and continue UP in August.
