DOW and S&P YearlyUS 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 WeeklyAre 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.
