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

Aussie Index (SPI) 12 March 2011 Weekly

"Unless the SPI is below 4807, the upward trend remains stable.

Price has reversed down from the February highs (double monthly highs) and found support (February 50% level)

This would normally see the 3rd month continue up towards the following Quarterly highs in April, as part of a larger trend towards 5093, as previously mentioned

In the short-term, there is a gap at 4807, which matches critical levels in the SPI."

Last Week's report

SPI Monthly and Weekly

The risk of the upward trend began to falter by Tuesday once price started trading below 4807, and it was then confirmed with Thursday's breakout of the 3-week lows @ 4772, and the extension down into the MARCH lows.

Those lows @ 4590 were filled during Sycom trading.

My view from next week, is that the market is going to swing back towards 4730 to 4753 and retest the breakout.

Around 4753 is a potential resistance zone, that can send the market back downward into the lows once again

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.

If the S&P remains above it's support levels, then there's a potential rise upwards during the 2nd Quarter starting in April.

If the S&P fails support levels, then there is a larger reversal pattern taking place.... (read Below)

SPI Primary & Secondary cycles, along with the Monthly Range

The SPI is now following Set-up B or C.

The Price action in February was following Set-up A;- a bounce off the monthly 50% level, and whilst above 4807 the bias was to follow the trend towards the 2nd Quarter highs @ 5093-96.

That changed this week, with the market failing to remain above 4807, followed by the breakout of the Weekly lows @ 4772, and the continuation down towards the March lows

There are now two larger reversal patterns playing out…

#B) Has reached support and now rises upwards in the short-term, but then forms a double monthly low pattern in April.

The next upward trend aligns with the 2nd quarterly 50% level (Yellow)

#C) Support fails in the S&P 500 and the SPI continues to trend down towards 4442


Read US Index Report

Aussie Index (SPI) 5 March 2011 Weekly

SPI Monthly and Weekly

At the moment I'm treating the Aussie Market using orderly patterns with an upward bias in MARCH and APRIL.

The view is that most stocks have reversed down from their February highs (double monthly highs) and found support.

This would normally see the 3rd month continue up towards the following Quarterly highs in April, as part of a larger trend towards 5093, as previously mentioned

In the short-term, there is a gap at 4807, which matches critical levels in the SPI....

the Weekly level and the March 50% level @ 4806-07

Once again, my view of the trend moving higher is going to be determined by the price action in US markets, as was the case last week, when we saw early weakness in the S&P 500 during the first 2-days, as the market reversed down into critical support levels.

Unless the S&P 500 is trading below 1300 (& March 50% level), and the SPI is below 4807, then the trend is remains stable.

This stability is now based on US markets.

READ US Index report

Aussie Index (SPI) 26 Feb 2011 Weekly

SPI Monthly and Weekly

As noted in last week’s report, the market remains in an orderly upward trend unless the market is trading below 4881-3

This changed last Monday when it was superseded with the breakout of the 5-day lows @ 4894.

The reversal of the trend was back into trailing weekly support levels @ 4767, which were only verified once the S&P followed the same pattern, and found support @ 1295, resulting in the SPI moving up on Friday.

Looking at the bigger picture:- we have an 2-month wave pattern that has reversed down from the February highs and back into trailing support levels, during the first Quarterly cycle in 2011

Those Weekly support levels have held, and the market is now moving into a short-term counter-trend move upwards, as the next month is about to begin (MARCH)

If the market is going to continue higher, then it will obviously follow the monthly range in MARCH and push upwards once again, using next week’s 50% level @ 4844 as a trend guide.

There are two possible patterns over the next 5-days…

#1 remains orderly, and continues towards next Week’s highs, as part of a move towards the MARCH highs

#2 moves back towards the original breakout @ 4881-83, stalls and then starts trading below the Weekly 50% level once again, as March begins

If that happens then there is the potential for more weakness if the market begins trading below the monthly 50% level in MARCH.

We should all keep an eye on how the S&P 500 trades over the next 2-days, as this could help set-up the overall trend over the next few weeks.

Read US market report.

Aussie Index (SPI) 19 Feb 2011 Weekly

SPI monthly and Weekly

Whilst the market remains above 4883, there is a trend bias to continue higher, and move towards 5093 by the 2nd Quarter.

At this stage the Australian market is following the trend within the Weekly ranges in
an orderly manner.

There will be levels within the daily range (not shown above) that will provide random resistance points of 21 to 42 points

However, unless the market is trading below 4883, then I can't see too much weakness in the short-term.

Aussie Index (SPI) 12 February 2011 Weekly

The SPI will be hitting major resistance levels next week...

first quarterly highs @ 4883 next week, which also matches the Weekly highs @ 4881.

Those levels will be seen as resistance, however the Australian market will once again follow any leads from the S&P" (Previous Weekly Report)

SPI Monthly and Weekly

The SPI has moved up into the February highs and stalled around the resistance levels, closing lower of Friday.

These Monthly highs now completes the 2-month wave pattern within the current Quarterly cycle


Personally, I wouldn't want to buy into the market at these levels. I would want to see the market move back down into trailing support levels.

However, as noted in last week's report...

Our market will dance to the tune of the S&P 500, as it continues up towards 1331 on Friday, resulting in our market opening higher once again. (next week)

Therefore, even though my view is that the SPI has hit resistance at these levels, and I would like to see it come back down into trailing support zones

I also noted that there is a larger Primary cycle pattern, trying to push the market up towards 5093 by the 2nd Quarter in 2011

Therefore, the SPI can continue to move higher next week...

And any weakness will be helped by the market trading below 4857, and rotating back towards the Weekly 50% level.

Aussie Index (SPI) 5 February 2011 Weekly

SPI Monthly and Weekly

In last week's report I wasn't so bullish because of the price action in the S&P 500.

However, that quickly changed when both markets moved back above their Weekly 50% levels....

And the SPI has followed the trend into the monthly highs in February...

And likely to reach the first quarterly highs @ 4883 next week, which also matches the Weekly highs @ 4881.

Those levels will be seen as resistance, however the Australian market will once again follow any leads from the S&P (Read US market report).

SPI Yearly and Monthly

The SPI will be hitting major resistance levels next week...

However, as noted at the start of the year

http://austindex.blogspot.com/2010/12/aussie-index-spi-1stjanuary-2011-weekly.html

there is a 2011 Primary trend that can see the market continue towards 5093, by the 2nd Quarter