DOW S&P Daily 1st Nov 2008 Weekly

DOW and S&P Yearly

US markets trading below 4th Quarter lows, and at this stage are struggling to get back over those lows.

At this stage it's too early to say whether US markets will continue up towards the 3rd Quarter breakout ( September's lows) but it's something I think will happen.

Once that happens then my view remains lower prices in 2009.

DOW and S&P Monthly Futures

11th October Weekly Report:- "A Monthly and Quarterly close below the Yearly lows constitutes a breakout, which will lead to further erosion in stocks prices in the 4th Quarter...and a bear market and then another leg down into 2009

October lows resistance (breakout forms resistance), and the trend guide for the 4th Quarter will be defined by the November 50% level.

If that's the case:- then around November lows could provide the ideal 'swing' low for a swing back towards the 2008 lows breakout"


Since that Report the Market has reversed back up into the October low breakout and reversed back down.

This often occurs to verify the breakout, which more often than not leads to further weakness into the extended lows in the following month:- November lower lows

At this stage:- whilst price is below the November 50% level the expectation is that price is going to continue down into November lows.

DOW and S&P Weekly

Are US markets market going to continue up towards the November 50% levels early next week, or reverse down from next week and continue down into November lows?

I can't answer that until things begin to unfold... but a higher Weekly open and trading below the Monthly balance points, can easily sell down at the start of next week.

However certain things need to happen to verify any reversal.

Last Week was the first time that US markets have been able to 'HOOK' above the Weekly 50% levels and continue up into a higher Weekly close since August.

That's a good sign, but last time markets were above the Monthly balance points.

If there is going to be higher prices, basically Monday has to continue higher, and not reverse down from the 'Red' levels and close below the Weekly 50% levels....

That's certainly not a good sign for November.

But that favours my 11th October Report:- if price can move down into November lows, this will be the pattern that I think should finally get more Buyers appear pushing the market higher into the close of the 4th Quarter....

But will eventually lead to lower prices in 2009.

S&P 5-day pattern

Last week's rally was already modelled before it even started.

Once the 5-day blue filter crossed over from above to below on Monday... the breakout above the 5-day 50% level on Tuesday lead a rally to the 5-day highs.

This resulted in a HOOK pattern above the Weekly 50% level

And then the expectation were higher prices by Friday trading support each day:- higher weekly close by Friday.

DOW S&P Weekly 25th October 2008

DOW and S&P Yearly

Nothing has changed in what I've been saying for months, lower prices in 2009.

There is a 4th Quarter breakout (below 3rd Quarter lows), therefore the expectation remains that prices will remain below Septembers lows.....

DOW and S&P Monthly

October low breakout and expectation that November 50% level is the trend guide with further weakness down into November lows.

Exact levels will be defined after next weeks trading.


DOW & S&P Weekly

This week saw a lower weekly open a move back into the 50% level and then a rejection down towards the Weekly lows.

Next Week:- same pattern expectation


S&P 5-day pattern

"October lows resistance (breakout forms resistance), and the trend guide for the
4th Quarter will be defined by the November 50% level.

In the Short-term:- Hedge funds will continue to play around with the same 5-day pattern each day, and the Weekly ranges (green) shown in the Daily chart should be the trend guide for next Week"............ 11th October Weekly report

This week saw price follow the 5-day patterns precisely:- rotate...extend...rotate.

I expect next week to be no different.

DOW S&P Weekly 18th October 2008

DOW Yearly

DOW trading in a range below the Yearly 2008 lows with the expectation that price will continue lower in 2009

S&P Yearly

Same expectation:- Price to remain below these lows in the 4th Quarter and then continue down into 2009 low.

DOW and S&P Monthly Futures

"October lows resistance (breakout forms resistance), and the trend guide for the 4th Quarter will be defined by the November 50% level.

Price will make it's way back towards the breakout of the 2008 lows late in this 4th Quarter or early in the first Quarter in 2009 and continue lower from 2009."

Previous Weekly report

At this stage the expectation remains that price will remain below October lows and then most likely move down into November's low:- Thrust pattern from the 50% level.

Once it reaches November lows, I'd begin to look for price to begin to make it's way slowly upwards :- retest the Yearly breakout lows (September's lows as shown above)

DOW 5-day pattern


"In the Short-term:- Hedge funds will continue to play around with the same 5-day pattern each day....

Because if price remains below the October lows and closes below the October lows on the last day of this month, then there is an expectation that price will continue down into November lows" Previous Weekly Report

And I expect the same to continue for the next couple of weeks until the end of October....

Day traders:- Simply Trade the 5-day patterns of support/resistance

• Daily Trading Set-ups & Analysis

Index Futures SPI, DOW S&P, & Forex

Subscribe to the Trader Premium

http://www.datafeeds.com.au/premiumtrader.html

DOW S&P Weekly 11th October 2008

"The worse case scenario, which I didn't want to see is now playing out.

A Monthly and Quarterly close below the Yearly lows constitutes a breakout, which will lead to further erosion in stocks prices in the 4th Quarter...and a bear market of lower lows into 2010.

At this stage Prices are looking to go lower and will struggle to remain above the October 50% level, and probably sometime in the next quarter the S&P will end up around 1000 before any potential reversal up into the Yearly 2009 50% level, and then another leg down into 2009"

Previous Weekly report

DOW Weekly.....

I expected weakness in the 4th Quarter, and I expected another down leg in 2009, but I didn't expect the carnage that occurred this week.

Once last Friday closed below the Yearly lows (support) on the last day of the Month and Quarter the only way was down, with the DOW moving into 100% breakout of the range before finding any support in the market.

There are still over 2 months to go before this year ends, but where price closes in 2008 will determine how far markets go down into 2009.

As previously pointed out, the lower it closes in 2008 the further it goes down into 2009.

The only redeeming factor in this current price action is:- price will go back and re-test the 2008 breakout some time before the market continues down the following year

S&P Weekly

I normally have a fair idea on price action and the direction of the market using dynamic support and resistance zones within each higher timeframe.

The Previous Friday (3rd October) closed below major support zones, therefore I factored in that the 4th Quarter would continue down, but more often than not price moves in Monthly 'step' formations as it travels within the Primary range (Yearly).

Once price closed below the Yearly lows, my view was that global markets were heading down into the 4th Quarter lows.

The crash pattern didn't occur until price broke out of those 4th Quarter lows, and then it was a Free-fall:-Market CRASH

S&P 5-day pattern

Once the 4th Quarter lows failed to hold there were no more higher timeframe support levels in the market, and each day followed the 5-day pattern of rotating towards the 50% level and then extending outward towards the extreme each day.

My Market Crash didn't occur until Tuesday:- breakout of the 4th Quarter lows, but it wasn't helped by the previous Friday close below the Yearly lows.

Hedge funds had a field day due to the size of the trading ranges each day, with Friday having a 1000 point range from top to bottom.


S&P Weekly and Daily charts

So what do I Think will happen?

Long term:- Price will make it's way back towards the breakout of the 2008 lows late in this 4th Quarter or early in the first Quarter in 2009 and continue lower from 2009.

October lows resistance (breakout forms resistance), and the trend guide for the 4th Quarter will be defined by the November 50% level.

In the Short-term:- Hedge funds will continue to play around with the same 5-day pattern each day, and the Weekly ranges (green) shown in the Daily chart should be the trend guide for next Week.

I'm not going to pick the bottom in this market, the first sign will be a move above the 5-day 50% level, but will need to be confirmed with price trading above the Weekly 50% level.

Because if price remains below the October lows and closes below the October lows on the last day of this month, then there is an expectation that price will continue down into November lows.

If that's the case:- then around November lows could provide the ideal 'swing' low for a swing back towards the 2008 lows breakout

S&P DOW Weekly 4th October 2008

S&P Weekly Cash

In September US markets had reached their Yearly lows, and the expectation that any up trend in the 4th Quarter was dependant on the October 50% level.

The best case scenario was:- a 4th Quarter rise but will eventually lead to lower price is 2009.

The worse case scenario, which I didn't want to see is now playing out.

A Monthly and Quarterly close below the Yearly lows constitutes a breakout, which will lead to further erosion in stocks prices in the 4th Quarter...and a bear market of lower lows into 2010.

At this stage Prices are looking to go lower and will struggle to remain above the October 50% level, and probably sometime in the next quarter the S&P will end up around 1000 before any potential reversal up into the Yearly 2009 50% level, and then another leg down into 2009.



DOW Weekly cash

A Set-up:- is the best case scenario but will eventually lead to lower prices in 2009.

B Set-up:- is the one that will probably play out for the rest of 2008, and much less likely that any rises in the 4th Quarter.

But everything is leading to lower prices in 2009....