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
