Weekly Report 24th Nov 2007 Part 3

28th November...

This is what I wanted to see happen on Global markets, November levels support the markets, and begin the swing back towards the December 50% level before the next trend develops.

This move on US markets above the 3-day highs and Weekly 50% level is the first sign that a major bottom has been set, but only for November. Any follow through is going to be determined by next month's levels.

How far the rest of the trading week travels upward is going to have a bearing on the Direction for December

US Weekly Report 24th Nov 2007 Part 2

Monday 26th Nov 2007...

Monday continued down following a reversal from the 3-day highs and following the trend down...

DOW and ES

US markets have followed the Weekly timeframe down into November extremes.

My expectation remains that US markets are heading lower and following a 2-wave pattern towards the December lows, however the ideal price pattern is for a swing upwards into the 50% level before a continuation downward in the forward month…

The December lows will be confirmed on the last trading day of the month…

I still expect a counter-trend move upwards before the next wave down...

US Index Weekly Report 24th November 2007

DOW and S&P

The higher weekly open next week can therefore continue down into another 5-day pattern towards those November lows as shown the Weekly charts:- A higher weekly close followed by a lower weekly close as it heads down into November lows before major support is found in both these markets for this current month...

A bearish pattern will just sell-off on Monday from the 5-day 50% level and head down, and probably continue down over the next few days into November lows and into Major support (last Week’s Report 17th November 2007)

Both markets sold down on Monday and continued down until Wednesday when both found support. US markets (DOW and S&P) have now found major support for November 2007.

........................................................... Daily charts

US markets have continued down towards the November lows. The Down trend was confirmed with the break of the November 50% levels (read pevious reports), and the Market path of the down move was mapped out heading lower and finding major support around this week’s lows.

The Question of whether this is going to be a major low won’t be answered until a couple of weeks have passed, but I do expect a rotation upwards next week and a move back towards the higher timeframe 50% level, before price hits major resistance once again.

Dilernia Principles:- Monthly support is found around the current monthly lows, before a 2nd wave down-pattern continues into lower lows in the forward timeframe.

Therefore: - my long term forecast is a rotation upwards next week, before a 2nd wave pattern sends markets down into lower lows in December before any major support can be verified and a new UP trend can develop for 2008.

Weekly timeframe:- Lower Weekly close and expectation of a move upwards and into a higher weekly close or into higher timeframe 50% levels.

Support around the November lows has been verified with the move back above the 5-day 50% level.

This UP move on Friday was what the Wednesday BUY trade was about, with the UP move coming 1-day late.

My expectation is for a continuation back towards the Weekly 50% level and move higher towards the new monthly 50% level in December before the next move down towards the December lows, as it follows the Dilernia Principle of a 2-timeframe wave pattern in lower lows before any major support and new UP trend can develop in 2008....


In Conclusion:- Major support in November has been found, expectation of a rotation upwards next week and into the end of the Month before December provides a 2nd wave down into December lows.

Support is only valid for the current timeframe, once November ends and December begins there will be a new path for price to follow and the same support won't be valid.

Resistance needs to be verified with a higher daily close and then a rotation down from a higher Daily open.

For Monday's trading please refer to the Daily Report:- The Trader Trading

US Index Weekly Report 18th November 2007

"For many these October levels might seem support, especially if there is a 2-3 day counter-trend move in the markets next week, but probability patterns often suggest that the price normally follows the model, so the expectation is that November lows are the target before any major rally or support is verified…

I do expect a 2-3 day rally upwards next week, but firstly I would like to see a test of the November and Weekly lows next week before a major counter-trend move upwards towards the weekly 50% levels.

The trend will probably continue down on Monday or hopefully it will so that these lows verifies support, before there is a 2-3 up move back towards the recent break.

Therefore the Weekly 50% levels next week are resistance zones for a continuation move down after any 2-3 day counter-trend UP move. (previous Weekly Report (11th November)"

DOW and ES-minis Weekly report:-

This weeks trading has been that in a nutshell, and by looking at the Weekly charts, whilst price is trading below the Monthly and Quarterly 50% levels the expectation is that both markets are going down and testing the November lows.

This week along with the lower weekly open, like many lower weekly opens, tried to push upwards before hitting resistance and drifting back down.

However with this week ending, the higher weekly open next week can therefore continue down into another 5-day pattern towards those November lows as shown the Weekly charts:- A higher weekly close followed by a lower weekly close as it heads down into November lows before major support is found in both these markets for this current month...

When we look at the medium term trend, this is defined by the Weekly 50% levels and the 3-day cycles, whilst price is trading below both these levels then it verifies the overall Down trend

"Friday’s trading is either going to set-up another wave down or if it closes around the middle of the 5-day range, then next week the 5-day 50% level can be a risk level to trade a 3-day UP move from next week..(Friday Report)"

The 5-day 50% level, as show above (red lines), are going to be a critical factor in next weeks trading because it’s going to set up the next 3-days of trading. Above and it will head back towards the Weekly 50% level.

After that expected move, the Weekly trading range has a random outcome, because it’s got 2 options:- just continue higher into Friday (higher Weekly close), or stall and reversed back down in a 2-day stalling pattern. But I’ll come to that later in the week.

Note: A bearish pattern will just sell-off on Monday from the 5-day 50% level and head down, and probably continue down over the next few days into November lows and into Major support

US Index Report 11th November 2007

DOW and ES-minis

Last weekly report my expectation was two fold, the market would consolidate above higher timeframe 50% levels. These were and are very valid support zones.

My second expectation was that if these levels broke this week the market would be on its way down into lower monthly-extended zones. This is a repeating pattern and a probability pattern.

Trading is simply about buying and selling support/resistance along with understanding that price has a certain trend it follows.

Sometimes during the trading week we all get the perfect trade because everything aligns with market dynamics, as was the case in the US selling the 5-day 50% levels and trading them down.

However, during the trading week not everyday is perfect and certain things need to happen before the trade eventuates and/or the Risk diminishes….

Weekly charts are showing the break, and this has continued down or continuing down into previous consolidating support.

For many these October levels might seem support, especially if there is a 2-3 day counter-trend move in the markets next week, but probability patterns often suggest that the price normally follows the model, so the expectation is that November lows are the target before any major rally or support is verified…

US markets continued down into the end of the trading week as they follow the market dynamics into November lows. This was confirmed with the break of the Weekly lows this week, and it was confirmed with Sell-offs from the 5 day 50% levels.

I do expect a 2-3 day rally upwards next week, but firstly I would like to see a test of the November and Weekly lows next week before a major counter-trend move upwards towards the weekly 50% levels.

The trend will probably continue down on Monday or hopefully it will so that these lows verify support, before there is a 2-3 day up move back towards the recent break.

The Weekly 50% level will define the trend, and we notice that both the break of this weeks lows matches next weeks 50% level.

I can’t see any major up move in November unless it moves down into November lows, as shown in the Weekly charts above...

Therefore the Weekly 50% levels next week are resistance zones for a continuation move down after any 2-3 day counter-trend UP move.

Premium daily report will follow on Monday.........

US Index Report 3rd November

DOW and other US markets are being supported around major support zones based on the Quarterly 50% levels. (13441)

Both Weekly sell-offs this month were forecasted and forewarned using 'Dilernia drops' using the Weekly timeframes.

Whilst markets are still trading above these levels, the major trends are still up.

The only worrying thing about the Support zones are:- the next Quarter are showing Drops, this can send markets back down in this Quarter, and it was the reason why the first major sell-off occurred in July. Support will obviously change if next week markets break these 50% levels, because the expectation would be to move back down into the November lows.

But just as the Markets were supported around the previous Quarterly lows, at this stage the only expectation is that the same will occur in this Quarter. And Friday’s trading has at this stage confirmed support.

Book:- “Once the Quarterly 50% level has been reached, price will normally spend a minimum 2-3 weeks consolidating around support…the more time that price spends at this level, the more the market is pricing in value”

Just as the previous Quarterly 50% level provided a number of trading weeks around support, at this stage I have the same view in current global markets.

Next Week:- I have the same expectation next week as two weeks ago, a Weekly ‘bar’ that has an up bias, but the trend is going to be defined by the Weekly 50% level 13758.

Therefore choppy-rotating days as the markets consolidate.



ES-minis Weekly Report

ES is far more compelling when looking at Market dynamics and support.

Support verified in October, and so far verified in November, with both Weekly
'Dilernia-Drops' forecasting and also forewarning ‘weaker’ timeframes this month.

Next Week: Exact same expectation, daily and weekly trends are going to be defined by the 50% levels @ 1528.

Trend remains up whilst above these 50% levels.

There is so much negative news in the US markets, that is hard for any person to have a fundamental reason why markets should move higher, but this is the only conclusion I can make at this stage. And the more it consolidates above these levels the more it’s pricing in ‘Value’

However, if US markets do come under more selling, then the expectation is that not only would the ES come down to 1431, but it could go as far as 1399.25, but historically these next two months don’t normally have ‘bearish tendencies.