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)
