DOW S&P Weekly 1st March 2008

Global markets are consolidating around Quarterly support, and if there is going to be a next wave down it will come in the next Quarter or just after contract expiry in mid-March.

The current price action occurring now, which does seem like there's a strong ' support-base' building....however I can only make a forward conclusion by what I see, and I only view 'support' as being valid during this Quarterly timeframe which will disappear in April and project lower prices....

DOW Cash and DOW Futures Weekly charts

At this stage US markets are range bound and with 2-weeks before Contact expiry, if Price is still trading below March 50% level there is probably going to a 2nd wave down into the next Quarter when this current 'Support' disppears.....

As mentioned in the Daily report this week on the 27th, the Weekly cycles are a 'sell', and they have pushed the market back down as they did in December 2007, and until prices are able to close above the 3-weekly highs then we should continue to view the markets as heading lower in each Quarterly timeframe.

"As the Weekly timeframe begins to 'tighten' and get smaller, there will be a breakout of the range, which will probably occur the closer it comes to the next contract expiry."

DOW Daily

DOW Weekly ranges are getting tighter and we can see that for the next Wave down to occur there has to be a break of the Weekly lows. At this stage the Markets are still range bound between Weekly channels.

Friday's down-trending day has closed below the 3-day lows:- a change of the 3-day cycle and expectation is that price will swing upwards or consolidate for 2-days before the trend continues down.

The best Set-Up would be a rise UP towards March 50% level in the first few days next week hit the March 50% level and then move down into the Weekly lows.

Those Weekly lows are viewed as Support, but a break of these lows and the expectation is that price will begin to move down towards March lows....

DOW intra-day

The past few weeks on the DOW has been predictable in February:- it has been a consolidating monthly timeframe trading between Weekly channels, and when support failed in 1 day, the next day moved down into support and then rallied higher the next day.

On Thursday support had failed and the expectation was that price was moving down into Friday's support and the same pattern of a reversal up ('short-covering') . However 'support' had failed for the first time in many weeks, breaking the 5-day lows.

Therefore the expectation is the breakout of the 5-day lows on Friday, and price will try and push lower next week on Monday.

Normally the view is for price to rotate upwards:- lower Weekly open and break of the 3-day cycle would see a 2-day rotation upwards, but with Friday's breakout of the 5-day lows the expectation is to push lower on Monday into Weekly lows before any higher move or reversal pattern is going to play out.

S&P Weekly Cash and Futures

Same expectation is that market is currently supported around Quarterly lows, and with the expectation price is heading lower in the foreward timeframe.

Ideally I would like to see a test of the March 50% level before any major down-move.....

E-mini Daily chart

We can see back in the 1st January 2008 when the same pattern of the Weekly breakout occured and the move down into January lows.

And this is the same pattern that we need to see to verify any continuation down into March lows.

And the same could be said on March 50% level and the breakout of the Weekly highs, if for some reason the Week before contract expiry moves higher, as often happens. (Buying support into contract expiry)....


Next Week:-

Friday's breakout and expectation that a breakout of the 5-day lows and price will push lower on Monday....

Please read the daily report....

DOW S&P Weekly Report 23rd Feb 2008

Each Quarterly timeframe low will support price, and move back towards the Central levels on the higher timeframes...If there is going to be a 2nd wave of selling it will occur in the forward Quarterly timeframe, that being in the 2nd or 3rd Quarter.

Therefore for the next few months I'm looking for US and all global markets to move into a consolidation phase.....(Weekly Report 2nd February)


DOW Weekly Cash (left) DOW Weekly Futures (right)


Global markets are consolidating around Quarterly support, and if there is going to be a next wave down it will come in the next Quarter or just after contract expiry in mid-March.

The current price action occurring now, which does seem like there's a strong ' support-base' building, and could result in higher prices in the future, however I can only make a forward conclusion by what I see, and I only view 'support' as being valid during this Quarterly timeframe which will disappear in April and project lower prices....

DOW Daily futures

Until then the market is range bound and it's getting predictable on how price action is playing out.

Any time the market opens higher and near resistance levels they sell it down, and around the 5-day lows short-covering rallies occur. This price action won't last, but with 1 week remaining until the end of the month we should continue to expect the same.

As the Weekly timeframe begins to 'tighten' and get smaller, there will be a breakout of the range, which will probably occur the closer it comes to the next FED meeting..and contract expiry.

DOW intra-day

This week's trading provided some extremely robust trading set-ups each day. These types of markets are ideal for 'day-trading', because the 5-day levels play an important part, as price moves from the middle of the 5-day range outwards, and then back towards the middle of the range from outer channels

In trending markets or a trending Weekly 5-day period, you don't get as many high probability set-ups. This is obviously going to suit a certain style of trader compared to someone else, but by reading my daily blog I hope that it can suit everyone...

S&P Weekly Cash...

Exact same expectation as the DOW, and the exact same price action occurring......

E-mini Daily and intra-day

Last Week's high probability pattern was a rise upwards on Monday and then look for a down day on Tuesday defined by the Weekly 50% level.

When there was a large UP day on Wednesday, which occurred from lower support (5-day lows) the rest of the trading week moved into a sideways pattern resulting in some good set-ups....

Next Week:- I don't have an overall view of where the market is going or how it's going to play out, other than using the intra-day levels once again, and using regressive trading set-ups daily.

In conclusion:- Quarterly support and range bound, and with the Weekly timeframes begining to tighten there will be a breakout of this 4 week range shortly, probably timed with the start of the new month.

And for day-traders we simply look for the same patterns:- Sell higher opens and look for 'short-covering' rallies from support in the 2nd half of the day until the breakout occurs...

Please read the Daily reports......

DOW S&P Weekly Report 17th Feb 2008

DOW:

Weekly charts:- DOW futures on the left and DOW Cash on the right.

Range bound between Quarterly Support and Resistance from the breakout of the previous Quarterly lows, and the current view is further weakness in the forward quarter in April if price isn't able to close above the 3-week cycle highs @ 12703.

We subscribe to support being valid (BUY) and the resistance being valid (SELL), but eventually one is going to fail:- reverse the down-trend and move higher or continue with the down-trend into lower lows defined by higher timeframe analysis.

Daily chart:- DOW futures

Last Week's high probability pattern was simply using the Weekly 50% level:- above and it was moving back towards the 3-day highs, and above that price was moving towards the 5-day highs.

This price action was supported not only by the Weekly 50% level, but also by Quarterly support and a 'lower' weekly open (bottom-to-top)

Next Week's probability pattern is going to be the same, the Weekly 50% level @12399 is going to be the trend guide, as price remains between range-bound between Support and Resistance.

After last week's Price-pattern of a 2-day reversal down on Thursday and Friday, I favour an UP move on Monday towards the Weekly highs and resistance once again....

Intra-day chart:- DOW futures

Last Week's trading was 'text book' patterns:- 3 days up and probability of a 2-day reversal down from highs on Thursday was another probability pattern, but the important levels in confirming all the moves were the previous 5-day ranges.

Wednesday's UP move was confirmed by Tuesday's 5-day high. Thursday's reversal was confirmed by Wednesday's 5-day high. Friday's down move was confirmed by Thursday's 5-day 50% level...

And Monday's UP move next week is going to be confirmed by the 5-day 50% level (support)

Above support and the expectation is price is heading towards the 5-day highs.

Range bar chart:- DOW Futures

When we further analyse the Primary ranges (144) on the DOW, we can see that price is supported from Friday's level @ 12294, and the expectation is that price should move upwards 144 points to 12421....

Currently price is trading below the 3-day 50% level@ 12402 and below next Week's 50% level @ 12399, which is a short-term bearish pattern, therefore it needs to complete the 144 range upwards to confirm price is back above both those levels. Once it is above that the expectation is the market is moving UP towards the 5-day highs.

A bearish pattern would be:- 144 points upwards and swings back down below both those levels breaking support... or trading below support

Weekly Chart:- S&P CASH

Range bound between Support and Resistance, and until price can close above the 3-week cycle highs (on Friday), then the trend remains down and expectation it will follow the April range lower.

Weekly and Daily charts:- E-mini Futures

Exact same pattern last Week:- Quarterly support, lower Weekly open and rising upwards from the Weekly 50% level.

Next Week's high probability pattern:- 2 -day reversal and expectation of the 3rd day rising using the Weekly 50% level @ 1354 as a trend guide.

Note: Monday will start a brand new Weekly timeframe and the expectation is that price is rising towards the 5-day highs but also major resistance. Resistance is valid until it's broken and there is the potential of that occurring.

However a bearish pattern would be an UP move on Monday, but a sell-off from a higher Tuesday open. If this occurs and breaks the Weekly 50% level on Tuesday then the expectation is a major move down into the Weekly lows @ 1315

E-mini intraday chart

Support:- Monday's Up move should be verified by Price rising upwards from 1347.

E-mini Range bar (Primary Range R14)

Expectation that the UP trend should continue towards the 5-day highs.


In Conclusion:-

The Analytical view of the market is valid until proven wrong or it changes.

The Analytical view of the market is range bound between Quarterly Support and Resistance until it's broken.

The Short-term view of the market has been modelled to move higher on Monday towards the 5-day highs, this is valid unless price is trading below 'support'.

A Monday that rises higher has a random length:- it might reach the 5-day highs or it might not, but it's not a 'shorting' day whilst trading above the Weekly 50% level

A Monday that rises higher is the start of a new Trading week with the potential that price could continue higher each day:- But that's not my Analytical view because of Quarterly resistance.

A 'shorting' day will be valid around higher timeframe resistance and a higher open on Tuesday, but that will need to be confirmed by price moving back under the Weekly 50% level. If that price action occurs then my Analytical view is price is moving back down into Weekly lows, and at a much faster rate than many would expect....

That entire walk-forward scenario is valid and can play out precisely until proven wrong, and that is simply going to be defined by price trading on the either side of dynamic timeframe levels (50%) and support/resistance....

"those who anticipate best will prosper"

Please Refer to the Daily Reports......

DOW S&P Weekly Report 9th Feb 2008

S&P:- Looking for US markets to consolidate around these Quarterly lows, with any continued weakness from April.....

A bear Trend in 2008 will move towards 1173 over the next 3 quarterly periods, as it zigzags within the Weekly UP and DOWN patterns

DOW:-

Same expectation;- US markets are consolidating into Contract Expiry, with any further weakness the closer it gets to April or after March Expiry....

9-month pattern target is 10414 on the DOW....

DOW E-mini Futures:-

Weekly rotating patterns with expectation that February is consolidating, and Quarterly lows supporting price.

With US markets trading around Quarterly lows (support) and a lower Weekly close (top-to-bottom), the expectation is that US markets will rotate upwards, using the Weekly 50% level as a Trend guide next week

Above the Weekly 50% level, and expectation Price is heading back to the 5-day highs...

Below the Weekly 50% level, and price is moving down into the Weekly .618 before looking for 'HOOK' trading patterns and a 5-day reversal pattern UPWARDS....

Support 11934 DOW.
Support 1293 E-mini

Last Week's trading was simply set-up with the Sunday's range, and a 'breakdown' of Sunday and expectation was that Monday was moving down into the 5-day 50% level.

A breakout down of the 3-day channel and 5-day 50% level on Tuesday and price was following the 5-day dynamic range each day.... (2nd day reversal back to the Weekly 50% level from a higher Weekly open)

Next week is simply the same:-

Sunday Range will set-up Monday's Trading :- UP or DOWN....

And the 3-day high Range high will confirm the breakout and the follow through of the 5-day dynamic Range highs each day....

Note:- Overall Trend is DOWN, and trading below the February 50% level, therefore potential to make lower lows in February is still a possibility, but that will only happen with a confirmed break below Weekly .618 levels....

Please refer to the Daily reports.....

DOW E-Mini Weekly 2nd February 08

2 weeks ago I mentioned in the Weekly report that the 'blow-off' bottom could occur in this Quarterly timeframe, and any reversal upwards would be towards the 3-month highs in the foward Quarterly timeframe.

We got the blow-off bottom, and now the market is moving towards the 3-month highs during this Quarter and into the next Quarter

Each Quarterly timeframe low will support price, and move back towards the Central levels on the higher timeframes, in this case the Yearly 50% level @ 13002..

If there is going to be a 2nd wave of selling it will occur in the forward Quarterly timeframe, that being in the 2nd or 3rd Quarter. Therefore for the next few months I'm looking for US and all global markets to move into a consolidation phase.....

Above is the Weekly chart of DOW Cash:- consolidation range between Yearly 50% level and Quarterly lows..

S&P Cash

Rising upwards from Quarterly lows and at this stage the expectation is that price will hit resistance around the Yearly balance point.

Forward modelling shows lower lows from April:- Expectation that market will consolidate between current Quarterly lows and Yearly 50% levels for the next couple of months, and only then would I expect further Weakness this year.

DOW futures:-

Last weekly report:- " High Probability pattern:- upside move next week.....
Down-day closing below the Weekly 50%, but then the next day 'HOOKS' back inside the Weekly 50 % closing above..... then I favour a move towards 12700 in the 2nd half of the week as it rises upwards"

Price action reversed off the 3-day lows and 5-day 50% level on Monday (see intraday charts below), resulting in a HOOK day and the continuation back towards the February 50% level.

The January Resistance (trading below January Breakout) finished on the last day of the month, and at the start of the new month, the resistance disappears and market path can move more freely upwards.

Next Week:- Expectation of further gains towards the Weekly highs (12969) before reversing back down towards the Weekly 50% level later in the week.

E-mini Futures: -

Exact same price action with the 'Hook' day,then the re-test of the Weekly 50% level before heading into a higher close on Friday.

Next Week:- Expectation of further gains up into the Weekly tops before reversing back down towards the Weekly 50% level.

Price pattern Probability:-

Normally when the Weekly timeframe closes on it's high on Friday, I would look for a 2-day pullback towards the 3-day lows before resuming with the upward trend.

This might still happen, because I'm looking for price to move into both levels, however I'm looking for the market to move upwards into the Weekly highs and reversing back down in the later half of the Week, and not the other way around :- moving down and then UP.

Last Weekly Report:- "Support 5-day 50% levels, whilst trading above those levels expectation market is consolidating and could go higher into the Weekly 'tops'...

Bullish pattern will be a HOOK day....There has been no daily range breakout, price remains range bound between Daily Channels, therefore whilst price is trading either side of the 5-day 50% level, expectation market is moving towards Daily channels highs.... andremains in a consolidation pattern..."


Because the market is dynamic, and each timeframe project new highs and lows, along with a new dynamic 50% level, the market is moving inside the Daily channels and consolidating with an UP bias.

Each new day provides a new high, which then provides resistance, and until price comes down into the Weekly 50% level, then the same price action can occur until the Weekly highs are reached next...

GBP/USD this week is a perfect example of price moving towards the upper Weekly channels, each day hitting ressistance, but then reversing back down on Friday back towards the Weekly 50% level. Therefore it's the pattern that i'll be focusing on next week.....


Please Refer to the Daily Reports

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