SPI Monthly and WeeklyAs pointed out in the previous Weekly reports, the price action below the MAY lows was bearish and there is a possible continuation down in June.
Whether it gets towards the June lows isn't a high probability pattern, as the Yearly 50% level @ 4295 can continue support the Australian Market.
I would have preferred to have seen Monday sell off from the June 50% level, than Monday opening lower, as the market can swing back upwards ( short-term counter-trend move)
The down trend is will be dictated by the price action in the S&P, and even though I'm bearish, the Australian market can continue to consolidate and swing around in the early part of June.
SPI Yearly and 3-Quarterly
We can see the Australian market sell from the 3-year 50% level and now trading around the single Yearly 50% level in 2010 @ 4296
This either going to have the Australian market move into a larger consolidating pattern until 2011, or it's going to continue down into the 2010 Yearly lows @ 3394 to 3061.
That will only happen if the S&P 500 continues down towards 969.
What do we notice about the SPI and the Yearly timeframe?
There is a breakout of the 2008 yearly lows but a failure to complete the move down into the 2009 lows.
The Australian Market was dragged upwards by the S&P 500, as those markets provided the Yearly swing low patterns in March 2009.
Therefore I have a feeling that the Yearly low pattern still needs to complete in 2010.
Therefore if I'm right, then around 3394 is the time to be moving back into the market and hold long term. It might dip lower to around 3061, but it won't spend much time below 3394.
We can verify using lesser timeframe (monthly) to time the market better, but I wouldn't be sweating on it.
I might be wrong and it doesn't get that low, but again it's too early to be moving into stocks just yet.
June lows might provide support in the early part of the month, but not so much in the last week of the 3rd month in the Quarter.
