Last Weekly report (30th December) spelt out the entire scenario for this week, with the major trend guide being the Yearly balance points in both markets.
Once price was under those levels, the expectation was that price was heading back down to retest the August lows:- the expectation of a high-probability down-trending weekly timeframe closing down on its lows on Friday.
When we look at the the S&P Weekly timeframe, this Quarterly timeframe is pointing to lower lows in this Quarter compared to the previous two quarterly timeframes.
Around these lows are major support levels in this Quarter, however the speed of any down move to the levels is the unknown factor....
Because a lower Weekly close will naturally try and rotate upwards at the start of the new week (lower Weekly close will try and swing upwards into a 2-3 day reversal pattern)
The rotation is back towards the 3-day highs/ 3-week 50%
Most probable reversal zones next week are around 1398-1403
DOW is exactly the same:- Expectation that around January lows are short-term support and next week will look for a 2-3 day counter-trend move back towards the Weekly 50% level.
In Conclusion:- Major Down Trend whilst below the Primary 50% level.
This is the first time in a couple of years that price is below these levels. The Dow only spent a couple of days below this level in 2005 before reversing and resuming the UP trend.
Therefore any UP reversal next week not only has to reverse back to the Weekly 50% level, but continue higher into Friday and close above the Primary 50% levels....
Below I have calculated new Primary levels based on the close of the Weekly Timeframe.
Because the Weekly timeframe opened in 2007 it doesn't close until the end of this Week to officially move into 2008.
With this down-trend this week the new Primary 50% levels are now:-
13052 on the DOW (CASH Market)
1450 S&P (CASH MARKET)
Next Week:- Ideally I would like a push lower into support levels, and then look for a counter-trend move back towards the Weekly 50% level.
After that move the rest of the trading week is an open book, and that is going to be based on the Primary 50% levels...
Please refer to the Daily reports for up-to-date daily analysis "the trader trading"
