Australian Stock Market SPI Futures 31st December 2011

SPI Primary cycles

The Primary cycles in the Australian Market suggests that the trend will continue down towards the lower levels in 2012, which will once again be long term BUY zones for stocks.

However, in the S&P 500 (read US Index report), the same bearish patterns aren't showing, as the trend will begin the new year above its own higher timeframe 50% levels.

That means that the Australian market could move up towards the higher timeframe 50% levels (1st Quarter) and the Yearly 50% level @ 4389 and BUTT its head against those levels for awhile....(3-6 months)

continue below....

SPI Monthly and Weekly

All the lesser timeframe cycles are bearish, and remain bearish as long as the trend remains  below the monthly 50% levels.

But as we can see, it won't take much for price to move above the January 50% level @ 4088 and swing back towards the Weekly highs, and then the 1st Quarter 50% level @ 4250 to 4292

Helped by the S&P 500 remaining above its Critical Support level @ 1235.75

Australian Stock Market SPI futures 24th December 2011

SPI Monthly and Weekly cycles

Most of the timeframe cycles remain bearish, as they are trading below the 50% levels.

And the only thing supporting the market was the S&P 500, which formed support and continued higher (read US Index report), allowing the Aussie market to remain stable.

with a shortened week (next Week), I'm not sure how the market will play out, but the close of next week will set-up the new Primary and Secondary cycles, which will play an important role, as illustrated with the 1st Quarter 50% level.

SPI futures Australian Stock Market 17 December 2011

we begin to focus on whether there is a late move up towards the December highs over the next few weeks.

Weekly 50% level Trend guide.

SPI Monthly and Weekly

No late move towards the December highs, as the SPI failed to remain above the Weekly 50% level @ 4204.

Price action has gone from remaining stable & consolidating to WEAK, coming into the end of 2011, as price is now below the December 50% levels

And unless it's back above the Weekly 50% level @ 4181

2012 doesn't look like it's going to start well. (chart Below)

SPI Primary cycles

 All trends originate from higher trimeframe 50% levels, and if it the current patterns follow the same expectation....

Then 2012 can move lower than the current 2011 lows 

Australian Stock Market SPI Futures 10th December 2011

SPI Monthly and Weekly cycles

After this week's price action of testing the December 50% level, along with Global markets rising up on Friday...

Now we begin to focus on whether there is a late move up towards the December highs over the next few weeks.

Weekly 50% level Trend guide.

Australian Stock Market SPI futures 3rd December 2011 Weekly report

Early next week rises upward (3-day rise), then the Weekly level @ 4125 is seen as resistance.

Previous Weekly Report

SPI Monthly and Weekly cycles

 4125 and the Weekly level formed resistance for the first 2-days, but as US markets followed the same 3-day rise this sent the Aussie market back into the Weekly highs by Friday

So we are back to my original view of the market consolidating for the rest of the 4th Quarter.

Next Week:- as long as it’s below 4319, the trend bias is to slip back towards the Weekly 50% level (random support)

With a view that some time over the next 2-weeks revisit the December 50% levels.


Whilst markets are above the Monthly 50% levels, the trend bias is up.

Australian Stock Market SPI futures 26th November 2011 Weekly Report

Next week's levels @ 4164-72, will provide enough information whether the market continues to trade between the Weekly levels (consolidation) or whether the downtrend continues.

as it won't take much for the market to be trading below the November 50% levels, putting more pressure on the market. 

Previous Weekly Report

SPI Monthly and Weekly cycles

Monday failed to remain above support levels (November 50% level @ 4164), as the S&P 500 opened below it's own support levels on Monday. (read US Index report)

The breakout of the Weekly lows @ 4102 will normally extend towards next week's lows @ 3919

 Note:- My view is that price will retest last week's breakout @ 4102..

That means it could move down into next week's lows @ 3919  and then swing upwards, which will align with the December 50% levels, and further resistance.

 But, if  early next week rises upward (3-day rise), then those Weekly lows @ 4102 and the Weekly level @ 4125 are seen as resistance. 

Based on current price action my expectation is that it will then extend down towards the December lows.

Australian Stock Market (SPI Futures) 19th November 2011

either the trend continues to move upwards, whilst above 4359

or we have more of the same over the next 5-days, as the market consolidates within the weekly levels ... (Previous Weekly report)

SPI monthly and Weekly cycles

The Market continues to consolidate during the 4th Quarter, and my view is that it will continue to do so.

Of course the market can continue lower, as it's trading below the higher timeframe 50% levels (Yearly and Quarterly)....

and it won't take much for the market to be trading below the November 50% levels also, putting more pressure on the market.

Next Week:-  my view is that next week's level @ 4164-72, will provide enough information whether I'm right and the market continues to trade between the Weekly levels (consolidation)

or not, and the downtrend continues.

SPI Futures Australian Stock Market 12th November 2011

The trend guide is based on the Weekly 50% level, with an UPward bias

I still have the view that the Market is trying to rise up towards the November highs, and the 4th Quarter 50% level...@ 4519  ....(Previous Weekly Report)

SPI Monthly and Weekly cycles

This week saw the Weekly 50% level support the trend, as it continues to move upwards during November.

I still have the view that the trend is moving higher during November (resistance), and then likely to consolidate for the rest of this Quarter....

That is, unless it closes below the Weekly lows

Next Week:-

use the levels in the Weekly cycles, along with short-term set-ups within the 5-day range...

either the trend continues to move upwards, whilst above 4359

or we have more of the same over the next 5-days, as the market consolidates within the weekly levels.

Australian Stock Market SPI Futures 5th November 2011

I'll be looking for the trend to continue towards the 4th Quarterly 50% level @ 4519 & (Monthly highs)

Once that occurs, I will then be looking for a potential larger reversal back down to retest the monthly 50% level in November, as shown @ 4190  (Previous Weekly Report)

SPI Monthly and Weekly cycles

The market did the opposite of what I was expecting, as it moved down into the November 50% level early in the month on the back of weakness in the S&P 500 (Read US Index Report)

Next Week:- trend guide is based on the Weekly 50% level, with an UPward bias

I still have the view that the Market is trying to rise up towards he November highs, and the 4th Quarter 50% level...@ 4519

Unless next week is trading below the Weekly lows, as this could put weakness into the market towards 3856.

The Australian Stock Market SPI futures 29th October 2011 Weekly

As noted in last week's report... keep an open mind that if the S&P 500 (US markets) continues up towards 1274... the Australian market could be around 4519 during November.

Previous Weekly Report

SPI Monthly and Weekly cycles

 The trend has continued with an upward bias since it crossed over the October  monthly 50% level 

three week's ago

A Break and extend pattern in the Weekly cycles (above 4345) should continue up into next week's highs @ 4463

Once that occurs I'd be looking for price to reverse back down into the this week's high, as part of retesting the breakout, and as low as 4298.

Once that occurs I'd then be looking for the trend to continue towards the 4th Quarterly 50% level @ 4519 & (Monthly highs)

Once that occurs,  I will then be looking for a potential larger reversal back down to retest the monthly 50% level in November, as shown @ 4190

SPI futures Australian Stock Market 22 October 2011 Weekly

SPI Monthly and Weekly cycles

US markets have showed more strength this week, whilst the Australian Market has struggled to rise higher than the 4th Quarterly level @ 4297, as resource stocks weigh down the market.

That may continue next week, if the SPI is trading below the Weekly level @ 4218...

as price will likely drift back down towards the Weekly 50% level and October 50% level (support)

Above 4218 and the trend bias is to follow the Weekly cycles...

As noted in last week's report...

keep an open mind that if the S&P 500 (US markets) continues up towards 1274... the Australian market could be around 4519 during November.

SPI Futures Australian Stock Market 15th October 2011 Weekly Report

Weekly close above the monthly 50% levels and this Week's highs @ 4141 can often see more gains in the following week as the trend continues into next week's highs, and 4th Quarterly level 4262-97

Therefore:- simply trade on the side of 4152...

SPI Monthly and Weekly cycles.

SPI has continued higher following the Weekly cycles, and likely to continue higher next week.

Next week’s highs are once again random resistance zones within the 5-day cycle.

As noted in last week’s report…..

And it's way too early to think that the Australian market will continue towards 4519+ during the 4th Quarter, simply because US markets aren't showing the same strength (Read US Index report)


After this week’s price action in US markets (read S&P Index report)….

Aussie traders should keep an open mind that the Trend could continue up towards 4519+ by November.

SPI Futures Australian Stock Market 8th October 2011 Weekly

Around 3800-3820, could form support and get to the market to swing back up towards the monthly 50% level in October (Weekly highs)

Previous Weekly Report

SPI Monthly and Weekly cycles

This week saw the market move into the support levels  @ 3805-20, completing the break and extend pattern from 2 week's ago.

The completion of this pattern will often see the market rotate back towards the higher timeframe monthly  50% levels and the weekly highs, as noted in last week's report.

 Next Week:- A weekly close above the monthly 50% levels and this Week's highs @ 4141 can often see more gains in the following week as the trend continues into next week's highs, and 4th Quarterly level 4262-97

Therefore:- simply trade on the side of 4152...

it's either going to continue upwards, or the next 5-days moves into a consolidating pattern towards the Weekly 50% level because of the price action in US markets.

And it's way too early to think that the Australian market will continue towards 4519+ during the 4th Quarter, simply because US markets aren't showing the same strength  (Read US Index report)

SPI futures Australian stock Market 1st October 2011 Weekly

SPI Monthly and Weekly cycles

Next week's short-term trend guide is to continue down into the weekly lows.

Around 3800-3820, could form support and get to the market to swing back up towards the monthly 50% level in October (Weekly highs)

However, my view is that price will continue down into the October lows & 100% of the Yearly range @ 3690, and form a robust support zone for 2011

The Australian stock report SPI Futures 24th Sept 2011 Weekly

SPI monthly and Weekly cycles

SPI moving down into the September lows, as part of this week's breakout @ 4002 and extension down into this week's lows.

This was set-up on the back of the S&P 500 breaking out of the 5-day lows, 1 day later than expected.

Next week:- around 3800 could form a robust support zone, and the market swings back towards 4002 and then the start of October.

if that occurs then we look for a potential move back down towards 3634 in October.

However, if next week continues down into 3690/3717, then there is a potential DOUBLE BOTTOM in the market (3rd Quarter) that could result in a major support zone for the rest of 2011.

SPI Daily Australian stock market 17th September 2011 Weekly

Expectation is that the trend is moving down into the September lows...

Next Week:- Weekly level @ 4082 could see the SPI rise back into the Weekly 50% level @ 4182

SPI Monthly and Weekly

My view was that the trend would continue down towards the September lows...

however, as mentioned in last week's report, the weekly lows could form a support zone and swing the market back upwards.

Next Week:- a lot will depend on the S&P 500, and whether it starts next week with a 2-day reversal pattern back down. (read US Index report)

Therefore the trend in the Australian will be defined by the Weekly 50% level @ 4160.

The monthly cycles don't favour more gains in the current month, but if it's above 4160 then the bias is up.

SPI Futures Australian Stock Market 10th September 2011 Weekly

SPI Monthly and Weekly cycles

Expectation is that the trend is moving down into the September lows...

Next Week:- Weekly level @ 4082 could see the SPI rise back into the Weekly 50% level @ 4182

However,  the first sign of weakness will be price trading below 4082....

and then confirmed with a breakout of the Weekly lows @ 4022

Note:- Weekly lows can often form a support zone during the current Month....

 but my view is that the lows won't hold, as part of a September 50% level rejection pattern towards the monthly lows

The Australian Stock Market (SPI futures) 3rd Sept 2011 Weekly

SPI Monthly and Weekly cycles

There are two patterns at play during September using the Monthly 50% level as the trend guide....

#B) forms support around 4135/37, and rises up towards 4405 and then 4600 by the start of October

or

#c) August lows forms resistance, and the next leg down begins with the September 50% level rejection pattern.

My view is (#C) simply because all the patterns over the past 2 -months have played out accordingly...

and Thursday's fake breakout and reversal pattern was the first sign of that happening.

The 2nd sign of that happening will be the market trading below 4135/4137

September lows are seen as the target and robust support levels for the rest of 2011.

SPI Futures Australian Stock Market 27th August 2011 Weekly report

It won't surprise me to see the SPI inside the Weekly channels (above 4029), simply because the S&P 500 remains supported around it's August lows @ 1115 until September.

Previous Weekly Report

SPI Monthly and Weekly cycles

The Australian Market remains supported above 4137, as the S&P remains above the August lows @ 1115

Next Week:- the Australian market could move back down into the Weekly 50% level @ 4129, but my hunch the trend continues to move upwards.


Once the next 5-days are over, then the week after next will let us know whether the trend follows the September low pattern using the Monthly 50% level as the trend guide....

 Or continues upwards and back towards 4405, using the September 50% level as the trend guide.


My view is that is going to continue down towards the September lows, and if that happens then my bet is that Obama will announce QE3 somewhere around those September lows (double bottom) which will underpin (support) the trend for the rest of 2011

The Australian Stock Market (SPI Futures) 20th August 2011 Weekly

Next week begins the 3rd Week, and if it follows last week’s report, then the market should continue to  upwards over the first 3-4 days.

This is part of retesting the previous weekly breakout @ 4321, if that happens then traders should move into short- positions from Thursday onwards.

Previous Weekly report

SPI Monthly and Weekly cycles

The SPI moved upwards for the first 3-days and retested the previous Weekly breakout and then got sold off on Thursday using the August lows as resistance.

I was expecting higher highs around 4405 by Thursday's open, but that was mainly due to the S&P 500 failing to follow the same 3-day rally pattern.

The current price action was written 3-weeks ago, and described in my new book, and so far it's following the text book patterns...

And if it continues to do so, then the SPI will move down towards the September lows in the following month.

Next Week:- In the short-term if it's below 4029 the trend bias is down....

However, it won't surprise me to see the SPI inside the Weekly channels (above 4029), simply because the S&P 500 remains supported around it's August lows @ 1115 until September.

Read US Index report (S&P 500)

The Australian Stock Market 13th August 2011 Weekly

The Weekly lows @ 3890, will complete the break and extend pattern from last week's lows @ 4321.


Once that pattern has played out, then we look for the following week (3rd Week) for a possible larger reversal pattern upwards, which could take the market as high as 4405 (#B).


If that plays out, then we look for another leg down in the 4th week of August into the September lows

SPI Monthly and Weekly cycles

Last Week’s price action was exaggerated on the news of the credit downgrade in the US, but we completed the break and extend pattern into the Weekly lows @ 3890, which was part of the original analysis (#A into B#)

Next week begins the 3rd Week, and if it follows last week’s report, then the market should continue to rally upwards over the first 3-4 days.

This is part of retesting the previous weekly breakout @ 4321, and could be as high as 4404 by next Thursday. (#C)

If that happens then traders should move back into short positions

However, I could be totally wrong about a 3rd week rally, and if the market begins to trade below the weekly levels @ 4122, it could put pressure on the market once again, simply because price is trading below the August lows.

The Australian Stock Index Report 6th August 2011

SPI Monthly and Weekly cycles

Weakness in US markets over this 5-day cycle has seen the Australian market move down and close below the Primary BUY support level @ 4137, helped by the August 50% level rejection pattern.

Extremely bearish whilst the market is below 4137, and this could see the trend continue down into 3690 by September.

In my new book there is a section on the current market conditions from pages 120 to 130, that spells out the possible price action over the next 2-3weeks, and this will be heavily influenced by the price action in the S&P 500 (read US Report http://usindexweekly.blogspot.com/)

That means over the next 5-days, the market can rise upwards early next week, reach the Weekly 50% level @ 4207, but then continue down into the Weekly lows.

The Weekly lows @ 3890  (Day session @ 3951), will complete the break and extend pattern from last week's lows @ 4321.

Once that pattern has played out, then we look for the following week (3rd Week) for a possible larger reversal pattern upwards, which could take the market as high as 4405-4442 (#B).

if that plays out, then we look for another leg down in the 4th week of August into the September lows.

In conclusion:- Whilst the market remains below the Primary BUY zone @ 4137, longs are open to risk


Footnote:- This week's report was written before Standard and Poor downgraded the US credit rating from AAA to AA+, how it changes the analysis over the next 5-days is yet to be seen

The Aussie Market Weekly Report 30th July 2011

BUY zones in July, with the expectation that the trend will continue back towards 4721 to 4804 during the current Quarter... this pattern is reliable, unless the US fails to raise it's debt ceiling.

(Previous Weekly report)

SPI Monthly and Weekly cycles

The continuation of the upward trend (#A) from the July lows, as shown in the Monthly charts failed to materialise, as the US continues to fail resolving its debt ceiling problem.

This has put pressure on the markets, and as we can see the Australian Market has closed below 3rd quarter support levels.

If something is done over the weekend to resolve it, then Markets can open much higher, and quickly move back towards the August 50% level and beyond.

However, if I’m focusing on the current patterns in the Weekly cycles, then the Weekly breakout this week would normally continue to move towards next week’s lows: - break and extend pattern.

Normally, next week's lows  can provide a swing point for a move towards back towards the August 50% level, once validated with patterns within the 5-day range.

However, as I’ve been saying for a number of weeks now….whilst the debt ceiling issue hangs over the markets, and whilst the SPI is below 4405, the trend bias can follow the Primary trend down into 4137/57, and the next long term BUY zone (#B)

The Aussie Market Weekly report 23rd July 2011

The July BUY zones are critical for the next leg upwards to 4721 and 4804…
That should be confirmed with a 5-day high breakout. (last week’s report)


BUY zones are my levels that I believe will provide the most robust support levels for the market to rise upwards from...That upward rise is back towards the 3rd Quarterly 50% level (June 25th Weekly report)

SPI Quarterly cycles

I was confident that the market would rise upwards from the BUY zones in July, as it matched the exact same pattern in 2010.

with the expectation that the trend will continue back towards 4721 to 4804 during the current Quarter

SPI Monthly and Weekly Cycles

July BUY zones were confirmed on Wednesday, with a 5-day high breakout @ 4500.

Next Week:- The SPI could remain within the Weekly levels, and consolidate for the next 5-days...

but if it's above 4617, the trend bias is up towards the July 50% level and then 4721-4804 during August.

Once again, this pattern is reliable, unless the US fails to raise it's debt ceiling.

The Aussie Market Weekly Report 16th July 2011

As long as it remains above 4607, the trend bias is to follow the Weekly cycles towards the Weekly highs and the July 50% level....
The Market could also revisit the July BUY zones in the 3rd Quarter, once it hits the 50% levels, simply because, fundamentally things around the globe aren't providing many positive signs

Previous Weekly reports

SPI Monthly and Weekly cycles

The SPI didn’t remain above 4607, as Monday opened below, and has continued to follow the move down towards the July BUY zones, which is what I was expecting.

The BUY zones around 4395-4405 are critical for the next leg upwards to 4721 and 4804…

That should be confirmed with the market trading above the Weekly level and matched with a 5-day high breakout.

If these BUY zones don’t hold support, then the SPI will probably follow the Primary cycles towards 4137

That weakness will only come about if the US decides not to raise the debt ceiling

Aussie Index (SPI) 9th July 2011 Weekly

SPI Primary and Weekly cycles

Expectation that the Australian market will continue to push upwards in the current cycle.

As long as it remains above 4607, the trend bias is to follow the Weekly cycles towards the Weekly highs and the July 50% level.

As per previous Weekly reports:- the current reversal upwards from the Primary support level @ 4442 has a bias to continue higher:- 4721 to 4804 during the current Quarter.

Aussie Index (SPI) 2nd July 2011 Weekly

The Primary level @ 4442 is supporting the market, and there is the possibility that the Market rises upwards next week. That upward rise is back towards the 3rd Quarterly 50% level (Yellow)

Previous Weekly report

SPI Primary and Monthly cycles

The SPI didn't move down into MY BUY zones in July...

 but instead continued upwards in the last week of the Quarter from Primary support, and looks to be moving back towards the Quarterly 50% level @ 4721,  and could go as high as 4804.

The up move was helped by the price action in the S&P 500 on Wednesday, with its breakout of the Weekly highs @ 1295, (Read US Index report)

Even though the market could go as high as 4804, I feel that the market will once again move into another large 3-month sideways pattern. I'd be very surprised to see the market spend too much time above that level

The Market could revisit the July BUY zones in the 3rd Quarter, once it hits the 3rd quarter 50% level,  simply because, fundamentally things around the globe aren't providing many positive signs that would lead to another Bull trend towards new highs in 2011

If the SPI continues to trend upwards and close above 4804, this will turn the Secondary cycles to Bullish once again after rising upwards from the Primary support level @ 4442

However, I would still like to see the market move into another 3-month sidways pattern, and then use the cycle turn around as support for the next leg upwards in the 4th Quarter.

Aussie Index (SPI) 25th June 2011 Weekly

The Australian market has now the potential to rise upwards from the June lows, as part of a short-term counter-trend move..

However, any rise upwards will be seen as temporary, because trends that are rejected down from the 3rd month 50% level (June 50% level) will often extend towards lower lows into the following quarter.

Previous Weekly report

SPI Weekly cycles

June lows supporting the Market, and there is the possibility that the Market rises upwards next week, if above 4487

However, the June 50% level rejection pattern is trying to push the market towards the July lows in the 3rd Quarter, as shown in the following chart.

Primary and Monthly cycles

The Primary level @ 4442 is supporting the market, and may continue to do so...

However, as mentioned a few weeks ago, the rejection pattern is trying to push the trend down into the BUY zones in the monthly cycles.

Those BUY zones are my levels that I believe will provide the most robust support levels for the market to rise upwards from.

That upward rise is back towards the 3rd Quarterly 50% level (Yellow)

Once that happens, I feel that the market will once again move into another large 3-month sideways pattern. I'd be very surprised to see the market spend too much time above that level, even though it could go as high as 4804.

There are two things that could go wrong with my analysis....

#1) the trend doesn't continue down into BUY zones, but actually rises upwards from next week and moves up into the 3rd quarterly 50% level, and as high @ 4804...

if that happens, then I expect the same consolidation pattern for the rest of the 3rd quarter.

#2) support levels fail, and the market continues down towards 4157 by the end of 2011.

Aussie Index (SPI) 18th June 2011 Weekly

If there is going to be a counter-trend move upwards, then is most likely going to align with the June lows @ 4460/62, and the S&P 500 finding support @ 1254-59

However, as noted in last week's report, any counter-trend moves are simply short-term up moves, as part of a larger reversal pattern towards the July lows.

Previous Weekly report

SPI Monthly and Weekly cycles

The SPI has moved down into the June lows @ 4460, whilst the S&P has moved down into it's own Support levels @ 1254/59.

Both markets have now the potential to rise upwards, as part of a short-term counter-trend move once price is above the Weekly levels.

However, any rise upwards will be seen as temporary, because trends that are rejected down from the 3rd month 50% level (June 50% level) will often extend towards lower lows into the following quarter.

And as we can see in the monthly cycles, there is still the potential to follow the trend towards lower lows.

SPI Primary cycles

The Primary cycles in 2011 are similar to the price action in 2010; April highs and reversal patterns downward in the 2nd Quarter.

However, the larger cycles are different, as 2010 hit resistance, whilst this year the market has moved down into the 2011 support levels @ 4442....

Therefore there are two potential patterns based on the larger primary cycles.....

#1) This week's support @ 4460 sends the SPI back up towards the Quarterly 50% levels (3rd Quarter Yellow), and more sideways consolidation for the next 2-months

#2) Or the trend follows the monthly cycles lower, and finds support in the July lows, and then swings upwards into the 3rd Quarter 50% level.

At this stage the 3-Quarterly 50% level is seen as resistance, and likely consolidation pattern over the next 3-months

Aussie Index (SPI) 11th June 2011 Weekly

"markets can often come under selling pressure in the 3rd month of the Quarter if price is rejected from the monthly 50% level, and extend towards the following quarterly lows. Therefore the trend bias is to continue down into the June lows @ 4462, and then possibly extend towards the July lows

And if history repeats, then that's the level we should focus on in July, with the expectation that there will be Short-term counter-trend moves upwards until then"

SPI Monthly and Weekly cycles

The Trend has remained flat with a downward bias......

and as noted in last week's report.... if there is going to be a counter-trend move upwards, then is most likely going to align with the June lows @ 4460/62, and the S&P 500 finding support @ 1254-59 (US Index report)

However, as noted in last week's report, any counter-trend moves are simply short-term up moves, as part of a larger reversal pattern towards the July lows.

For those who subscribe to the definition of bear trends that is defined by the Primary timeframe, the current trend is trading below both the Yearly and Quarterly 50% levels.

Financial stocks have been in bear trends since early MAY, whilst resource stocks aren't, and they continue to remain above their own, namely BHP & RIO. (read the Stock Report)

Aussie Index (SPI) 4th June 2011 Weekly

The Weekly 50% level and June 50% level align as of next week...(Wednesday)

those levels will determine whether the trend moves upwards….
or is once again rejected back down from the monthly 50% level towards the June lows.

Previous Weekly report


SPI monthly and Weekly

The market rose upwards until the start of June, and was then rejected down from the monthly 50% level, as the S&P 500 reversed down on the same day (read US market Report)

The critical support level in the short-term was 4581 Weekly lows, however, the support level was based on whether the S&P 500 would hold support @ 1301. And as we know that didn’t happen on Friday.

For those who have read my book, markets can often come under selling pressure in the 3rd month of the Quarter if price is rejected from the monthly 50% level, and extend towards the following quarterly lows. And as we can see, this is what is happening at the moment.


Therefore the trend bias is to continue down into the June lows @ 4462, and then possibly extend towards the July lows

There was a similar pattern in 2010, when markets reversed down from the April highs and continued towards the lower Quarterly support levels (Yellow)

In 2010, the lows in the market aligned precisely with the 3rd Quarter support (yellow) in July.

And if history repeats, then that's the level we should focus on in July, with the expectation that there will be Short-term counter-trend moves upwards until then.

Aussie Index (SPI) 28th MAY 2011 Weekly

4703 will decide on whether the price action in MAY and the failure at the monthly 50% level will push the SPI towards the Monthly lows....

especially if the S&P follows a double Weekly low pattern (Read US report)

Previous Weekly report


SPI Monthly and Weekly


The SPI opened below the Weekly level @ 4703 and moved down, as the S&P followed the double Weekly low pattern.

Once the S&P failed to continue down below the Weekly low (FAKE break), the SPI moved back above the Quarterly 50% level @ 4649, and then towards the short-term highs (5-day range)

I favour the trend to rise upwards, however, there isn't a robust set-up to BUY and hold as yet.

Things need to be validated, and those patterns begin with a move above the June 50% level, and then followed by the breakout of the Weekly highs.

As we can see the Weekly 50% level and June 50% level align as of next week...(Wednesday)


And those levels will determine whether the trend moves upwards, as the market remains above the Primary and Secondary 50% levels....


or is once again rejected back down from the monthly 50% level towards the June lows.

Aussie Index (SPI) 21st MAY 2011 Weekly

find support above the 2nd Quarterly 50% level @ 4649, and then make a gradual rise in the last week of MAY.

I would continue to use the Weekly levels as resistance/Trend guide:- 4738

SPI Monthly and Weekly

Last week saw the SPI find support @ the 2nd Quarter 50% level @ 4649 and rotate up towards the MAY 50% level and stall.

As noted in last week's report...

if the last week in MAY is going to rise up gradually, then it's going to remain inside the Weekly level @ 4703, and then push up towards the Weekly 50% level, and as high as 4826

4703 will also decide on whether the price action in MAY and the failure at the monthly 50% level will push the SPI towards the Monthly lows in June

I favour a rise upwards, as the market is acting in a predictable manner

But the market is never 100% reliable, especially if the S&P follows a double Weekly low pattern (Read US report)

Aussie Index (SPI) 14th MAY 2011 Weekly

I favour a continuation of the downward trend, following the break and extend pattern towards next week's lows (4649-59)


and then next best long set-ups will align with lower lows in June...

Previous Weekly Reports

SPI Monthly & Weekly

The trend in the SPI is going to depend on whether the S&P 500 breaks support or not (Read US index report)

if it breaks, the SPI will continue down into the MAY lows

if not...

it can dip down into next week's lows (4618-49), find support above the 2nd Quarterly 50% level, and then make a gradual rise in the last week of MAY.

Looking at the levels in the Weekly range....

I would continue to use the Weekly levels as resistance/Trend guide:- 4738

Aussie Index (SPI) 7th MAY 2011 Weekly

keep in mind we had the same pattern in 2010, when the market reversed down from the April highs, and by the 2nd day support levels failed in MAY (left Chart), on the back of weakness in the S&P 500.

Previous Weekly report

SPI Monthly and Weekly

We have the same pattern as in 2010, with the support levels failing by the 2nd day in MAY, on the back of weakness in the S&P 500.

However, we don't have the same outcome.

In 2010 the market reversed back down into the MAY lows during the first 5-days, (Flash Crash)..

Whilst in 2011, the S&P continues to remain above support levels, and the SPI below those support levels, which are now forming resistance.

There are two possible patterns during the rest of MAY....

#1) continues with the downward trend,  following the break and extend pattern towards next week's lows (4649-59)

#2) US markets move upwards (read US Index Report) and the SPI has a 'fake break' pattern.

Out of the two, I favour (#1) , and then next best long set-ups will align with lower lows in June...

but it won't surprise me to see #2)

Aussie Index (SPI) 30th April 2011 Weekly

SPI Primary (2010) and Secondary cycles (2011)

  As mentioned at the start of April, the market was either going to continue lower...

                                                                        or

 because the S&P 500 had remained above key support levels (Fake break), it was more likely going to continue to consolidate until the start of MAY, and then try and make another move towards  new highs in the 2nd quarter (5093-5193)

As we can see in the above right chart, the market has moved down into this Week's lows, and next week’s lows now match the MAY 50% level. (Critical Support)

The current price action suggests that the Market may continue towards new highs in
the 2nd quarter @ 5093 to 5193,  once Support has been validated ( doubleWeekly low pattern)

However, keep in mind we had the same pattern in 2010, when the market reversed down from the April highs, and by the 2nd day support levels failed in MAY (left Chart), on the back of weakness in the S&P 500.

What’s the difference this time?

The Primary cycles in the Aussie market are different, in 2010 we were below the 50% level, whereas in 2011 we are above, so there’s more reason for the trend to continue higher during the current Primary cycle.

The S&P is also above the Yearly highs (1301-1331), whereas in MAY 2010, the market opened below the Yearly highs and sold off on the first day of MAY (flash crash)

And currently, US markets continue with QE2 until the end June, which can help underpin
 the current upward trend in US markets.

In conclusion:- be aware of any weakness below the MAY 50% level

Aussie Index (SPI) 23rd April 2011 Weekly

SPI Primary cycle and Weekly ranges

The SPI continues to consolidate in April coming into MAY, as the S&P 500 continues to remain above support levels.

As noted in last week’s report….


There are two possible patterns, and that will depend if the S&P holds support levels.


If it does hold support, then I’ll look for the next push upwards from MAY, as the market ‘chops’ around for the next 3-weeks (SET-UP B) towards 5093 to 5139


If it doesn’t hold support, and the S&P moves back down towards 1247-54, then the SPI can makes its way back towards 2nd Quarter Support (SET-UP C)


Therefore there’s 1 week left to go in April and the market continues to consolidate within the Weekly levels…

A bearish pattern will only appear if the S&P is once again trading below the weekly levels, and the SPI is trading below 4801

Aussie Index (SPI) 16 April 2011 Weekly

The SPI has moved up into the monthly highs in April @ 4978, and in my opinion has hit resistance levels and will begin to rotate lower over the coming weeks, and move back down towards the lower Weekly levels.

Previous Weekly Report

SPI Primary & Secondary cycles.

Market Top @ 5006 on Monday, and expectation that the reversal pattern would occur is currently playing out

Even though I have a view that the trend bias is up towards 5093 to 5139, that’s more likely going to happen after there's a reversal pattern down from these April highs.

There are two possible patterns, and that will depend if the S&P holds support levels (above 1300-1304).

If it does hold support, then I’ll look for the next push upwards from MAY, as the market ‘chops’ around for the next 3-weeks (SET-UP B)

If it doesn’t hold support, and the S&P moves back down towards 1247-54, then the SPI can makes its way back towards 2nd Quarter Support (SET-UP C)

Next Week:- At this stage I’d treat the Aussie market as consolidating within the Weekly levels, using the Weekly 50% level as support.

And keep an eye on if there's a daily close below 1299 in the S&P500

Aussie Index (SPI) 9 April 2011 Weekly

It looks like the SPI will continue to follow the double Weekly high pattern and towards the April highs.

Previous Weekly report

SPI Monthly and Weekly

Overall target during the current quarter remains 5093+

However, the SPI has moved up into the monthly highs in April @ 4978, and in my opinion has hit resistance levels and will begin to rotate lower over the coming weeks, and move back down towards the lower Weekly levels.

Depending on where the market is at the start of MAY, and if it's trading near the monthly 50% levels, then the next move upwards will align with support levels matching in the following month

Basically, I think buying into the market at these levels is open to risk, and I would prefer to wait for the market to rotate back down over the next 3-weeks into trailing support levels

Aussie Index (SPI) 2 April 2011 Weekly

The current price action is a retest of breakout of the Weekly lows @ 4772 and also the Monthly 50% level, which on most occasions will push the market back down.

However, the price action in the S&P 500 on Thursday suggests more gains, which can push the Aussie market higher in the short-term, if it begins trading above 4804. .

Previous Weekly report.



SPI Yearly and Weekly

As mentioned in last week’s report, it was the price action in the S&P that was showing signs of dragging the Australian market higher, and once above 4804 the trend followed the Weekly highs.

Next Week….

It looks like the SPI will continue to follow the double Weekly high pattern and towards the April highs.

However, based on the price action on Friday, we could begin with a 2-day reversal back down towards the Weekly level @ 4813

Our overall target for 2011 remains 5093, and as high as 5139

Aussie Index (SPI) 26 March 2011 Weekly

"Next Week's trend guide is the Weekly level @ 4646.

Potential swing is towards the Weekly 50% level @ 4740 to 4772."

Previous Weekly report

SPI Primary, Secondary & Intermediate Cycle

The SPI has reversed back into the Weekly 50% level and 4772.

As pointed out in the previous Weekly reports, I would treat this reversal pattern as hitting resistance and then continuing lower, towards a double monthly low pattern April, that aligns with the start of the 2nd Quarter

The current price action is a retest of breakout of the Weekly lows @ 4772 and also the Monthly 50% level, which on most occassions will push the market back down.

However, the price action in the S&P 500 on Thursday suggests more gains, which can push the Aussie market higher in the short-term, if it begins trading above 4804.

Otherwise, my view is that the SPI can remain within the Weekly levels (white) over the next 5-days until the start of the 2nd Quarter & April

As we can see in the Primary and Secondary cycles, the market has come down and retested the Yearly and Quarterly 50% levels, and is now pushing upwards. If we followed the cycles of retesting support and moving outward from these levels, the 2011 target remains the highs @ 5093.

Therefore the Aussie market is either going to continue to push upwards next week, or it's going to remain flat over the next 5-days within the Weekly levels until the start of the 2nd Quarter

READ US market report

Aussie Index (SPI) 19 March 2011 Weekly

" My view is that the market is going to swing back upwards and retest the Weekly breakout.

This will be resistance zone, that can send the market back downward
into the lows once again (April)

I would normally associate the current price action with another retest of the monthly lows in April, thus forming a double bottom before the market has the potential to move upwards "

SPI Monthly and Weekly

The SPI moved down into higher timeframe support levels @ 4565, but it took until Friday for the market to begin its swing upwards, as part of a move to retest last week's breakout of the Weekly lows

Next Week's trend guide is the Weekly level @ 4646.

Potential swing is towards the Weekly 50% level @ 4740 to 4772.

Note;- as mentioned in the previous Weekly report, there is the possibility that the market moves back down into April's lows using the April 50% level as the trend guide.

If the market struggles to rise upwards over the next 2-weeks, and using the higher timeframes 50% levels as a trend guide, we could see the market back around 4330.

Any weakness in the Australian market towards those lows will be influenced by continued weakness in the S&P 500

The Quarterly 50% levels (Yellow) are the critical support levels in the secondary cycles in the market