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 cyclesLast 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.
