SPI monthly and Weekly
This quarter has seen the market follow a double monthly high pattern into November's highs and a reversal down, which is often the case as the market comes back looking for support.
The Trend bias is to continue down into support levels once again @ 4571-82.
If the market is going to go higher then these levels need to be verified by next week's close and then continue higher in December.
This usually occurs in the last week of the current month and then pushes upwards in the first week of December from the new December Monthly 50% levels into a higher weekly close.
What we also notice is that December has a higher step formation @ 4668
This can often end up a bearish pattern (please read current book regarding forward bearish patterns)
SPI Primary Cycle
We can see the market consolidating between the two Primary cycle 50% levels in 2010.
These levels will shift in 2011, with resistance disappearing @ 4964 and a potential upward trend towards 5383.
Major support levels in 2011 will be around 4433
Current Price action in the 4th Quarter has been trading above the 4th Quarter 50% level (Yellow), and recently there has been a change in the 3-period cycle (white), which now becomes support and a trend guide for the rest of this year and going into 2011
This gives more reason of the trend moving upwards over the next couple of weeks, as described in the previous chart
However, I also mentioned a potential bearish pattern appearing in December:- higher step formation.
If it does appear in the 2nd week of December, then the rotation pattern is for the market to move down towards the 2011 50% level @ 4433
