Aussie Index (SPI) 30 Jan 2010 Weekly

SPI Monthly and Weekly

Expectation of the market reversing towards 4300 looks more likely it will happen quicker than I expected.

I didn't think the market was going to rise back above the 50% levels in January, and with extended selling in US markets on Friday, February's lows are now closely matched with the Target.

Support:- 4300 and February lows.

I feel around 4300 is a robust support level in our market for the first Quarter....

Will the market going higher from there?

XJO Cash market

That's going to depend on the 2nd Quarter...

A bullish market will bounce off 4318 and continue higher in the 2nd Quarter towards 5200+

If by the start of the 2nd Quarter can't get above 4600 and remain above that level...

Then don't underestimate the lines of 'least resistance'

Then the only conclusion I can make whilst below 4600 is a drifting pattern towards the 2nd Quarter lows at much lower prices....

Or a 3-month consolidation pattern until the start of the 3rd Quarter when Yellow support levels catch up with the trend.

Aussie Index (SPI) 22 Jan 2010 Weekly

"As per my view of 4956-68 being a major resistance zone I'm expecting the market to reverse down from these levels and begin to move into a larger Trend reversal.

"Little things can grow into big things, and the current price action that is occuring is acting in a manner that often leads into big things"

I'm not expecting January 50% levels to hold support"

Previous Weekly report


SPI Futures Monthly and Weekly

US markets has helped the SPI move down into support levels @ 4616, but below the January 50% levels, as I didn't expect those levels to hold during the first Quarter.

Even though these levels can support the market, I do have a larger trend reversal down towards 4300 in 2010.

My view is that the SPI should remain below the Weekly 50% level and January 50% levels over the next 5-days.

Aussie Index (SPI) 16 Jan 2010 Weekly

SPI Monthly and Weekly

"A lot of resistance levels around 4956-68, and the sign of any reversal will be a breakout of the 5-day lows (White line)"....Previous Weekly report

As per my view of 4956-68 being a major resistance zone I'm expecting the market to reverse down from these levels and begin to move into a larger Trend reversal.

4956 was reached precisely during the week in Sycom and then followed by a break of the 5-day lows, as US markets followed my expectation of a 2-day reversal down at the start of last week.

Currently the SPI is being supported around the Weekly 50% levels.

The major breakout of support will begin with price trading below 4781, which will probably occur during an overnight session. If US markets continue down next week, as part of my view of a trend reversal then over the next 3-weeks things should begin to get some decent volatility back into the market.

I could be completely wrong on my view, but little things can grow into big things, and the current price action that is occuring is acting in a manner that often leads into big things.

Note:- I'm not expecting January 50% levels to hold support.

If price is still above those monthy 50% levels by the end of the month, then there's the potential of the market breaking out of those upper resistance levels in the 2nd half of the first Quarter.

Aussie Index (SPI) 9 Jan 2010 Weekly

SPI monthly and Weekly

Expectation of an early push upwards into the Janaury highs, and as per previous report there is a lot of resistance levels around 4956-68.

Whether there is a breakout on the Upside (monthly close above 4956, or a reversal pattern down from these highs, we need lesser timeframe patterns to validate the moves.

That's probably going to happen based on the price action in the S&P 500 (Read US report).

First sign of any reversal will be a breakout of the 5-day lows (white line) @ 4878.

Aussie Index (SPI) 2 Jan 2010 Weekly

XJO Dilernia Model

The price action in 2009 was quiet predictable, without the usual hindsight, as most of the information is already in my book.

The patterns were...

2008 4th Quarter breakout and extend pattern into the 1st Quarter lows in 2009.

1st Quarter support and reversal back into the 2nd Quarter 50% level.

The 3rd Quarter 'Thrust' pattern away from the 50% level and into the highs.

The 4th Quarter highs and reversal down into the November 50% levels....

And lastly support confirmed in late December for a move back towards the highs.

2010 should be an interesting year.... as I'm looking for the market to make its way down towards the 50% levels.

The only way I can get bullish in 2010 is for the XJO to be consolidating above 5101, and if that's the case the market in 2010 would be up towards 5700+.

However, I prefer my patterns to be orderly, that's why I would like to see the market come down into the 50% levels, and any potential moves higher would come later in 2010 as those upper levels shift higher dynamically.

I like my markets to trend from 50% levels.

At this stage I'm treating those upper levels as resistance.

SPI monthly and Weekly

Weekly highs dynamically shift upwards next week to match the January highs....

And it's those January high's that I've got my eye on to determine which direction the market is going to take.

The Financial Index and the Energy index are not in the same position as the XJO....

The XJO is trading around the highs, so I would treat those upper levels as resistance with the expectation that the market will rotate back down towards the 50% levels.

However, both the Financial Index and Energy Index are positioned for potential 'thrust' patterns at the start of the year. (read the stock Report).

And it will also depend on the direction the S&P 500 takes early next week. (read US report)