Both CASH markets are moving down into major support levels for 2008.These are critical levels in the market, and over the past 5 years these 'dynamic' levels have supported US markets, reversing off the lows and continuing with the overall Bull-trend.
However, most of these reversals have occured when trading above the Yearly balance points. This time it's not, and it might take a couple of months for any new UP trend to develop in the next Quarterly timeframe.
E-mini....
Expectation from the last weekly report, was for Price to come down into the January lows this week, find support, and then consolidate for the entire Week, before there could be reversal from these lows upwards next week...
DOW...
The reversal upwards next week was going to be defined by how the US markets closed on Friday :- if they close above the 5-day 50% level then my expectation they would move upwards and swing back towards the Weekly 50% level;- trading Longs from the 5-day 50% level upwards.
However, Friday's close was limp in both markets, therefore my expectation is that price is going to act like in November 2007, when price was initially supported around November lows in both markets, but moved down into a lower Weekly low the following week before swinging upwards.
Very similar to this week's price action:- January lows supported the market, but moved lower into Wednesday before swinging upwards, and then reversing down on Thursday from the 3-day highs.In Conclusion:- US markets are supported around January lows, but the expectation is that price will move lower into the Weekly lows:- Expected support, and then swing upwards into the Weekly 50% level.
The last time the market rallied upwards, this time I think that the Weekly 50% levels in both markets will act as resistance.
Please read the Daily Report....
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