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
