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.