SPI Monthly and WeeklyJuly high breakout and expectation price would continue with the break and extend into the new monthly highs in August:- Dilernia Principle.
The SPI wouldn't sell off this week once it hit the highs, but there could have been a reason because US markets (DOW S&P) had to complete their August highs, which they did on Friday.
I'm now looking for a reversal pattern from next week's higher open back down towards the July breakout, with the first target the Weekly 50% level.
I'm still bullish in the market, but I would like to see market pullback over a few weeks to retest the breakout and verify it's valid.
If the breakout is valid, then the SPI should push up into new highs later in the 3rd Quarter & early 4th Quarter.
The first sign of the reversal will be price trading below the 5-day 50% level, but won't be confirmed until there is a 5-day low breakout of the range.
However, I'm not expecting the SPI to drop like a 'thud', I’m expecting the markets to zig-zag their way back down, mainly within 5-day pattern rotations.
Based on monthly high resistance levels which are valid and are very reliable, along with a higher Weekly open, the only conclusion I can come up with is a reversal down before it goes up later in the 3rd Quarter.
Don't short trade above 4313 next week....
Later this month and a number of stocks are reporting which can easily push the market higher and complete the move into 4400+ earlier than I hope for.
