DOW S&P Weekly 29th November 2008

DOW and S&P Monthly

November lows support, and 4th Week reversal back towards the December 50% levels next week.

Recent support will disappear next month and any further weakness and the expectation is to move down into December's lows.

Once those December lows are reached I have the view of global markets making their way into higher prices in early January.



DOW and S&P Weekly

Monday's rally and HOOK bar over the Weekly 50% level.....

Dilernia principle HOOK:- This often results in a higher prices into Friday, confirmed with Tuesday remaining above the Weekly 50% level and the remainder of the days continue higher into Friday.

At this stage whilst US markets are trading above their Weekly 50% level, the bias is to continue towards the Weekly highs which match the December 50% level:- resistance.

DOW 5-day pattern

In last Week's report I was looking for 2 day down move and then a reversal upwards, but when Monday moved above support then the price action was to follow the 5-day pattern higher.

This resulted in the HOOK Weekly pattern on Monday, and the rest of the week was simply trading on the side of support as it follows the 5-day pattern higher each day.

In conclusion:-

I have the view of lower Prices in December and down into December's lows.

But I have a view that in the short term, whilst prices are above the Weekly 50% level then the market path is to continue towards the Weekly highs and December 50% level.

However, being a higher Weekly open I have the view that early next week there should be a 2-day reversal to re-test the Weekly 50% level.

If those 2-day's are able to remain above the Weekly 50% level, then there could be another higher Friday close by next week into the December 50% levels.

If price isn't able to remain above the Weekly 50% level after a re-test of it.... then early December could see bear-trend continue down into December' lows to complete my 2-month pattern.

DOW S&P 22nd November 08 Weekly

DOW and S&P Monthly

US markets have acted precisely since the breakout of the October lows in the first week.

1.Price has remained below the October breakout.
2.Price has retested the breakout to confirm it in the 2nd week.
3.Price has rotated back into the November 50% level in the last week of October.
4.Price has move in a 'thrust' pattern from the November 50% level down in November's
lows this week.

5.And currently November's lows are supporting the market.

My view is that price will continue down into December's lows, and form a robust support zone.

And in late December or early January begin a major swing back towards the Yearly breakouts, which coincide with September's lows this year. (3rd Quarter lows)

DOW and S&P Weekly

I think there is going to be a short-term bounce next week, but then continue down in December.

However:- my preferred pattern would be to see Monday and Tuesday drive down into the Weekly lows (next Week), and then from Wednesday up into Friday continue higher back towards the December balance point.

What's going to push the market higher is Financials, and banking stocks aren't ready for any moves higher other than short-term 3-5 day up moves.

December's lows complete the double monthly low pattern, which can provide a relief rally similar to when the double monthly lows pattern occurred in March 2008.

DOW S&P Daily 15th Nov 2008 Weekly

S&P Quarterly and Yearly

4th Quarter breakout forms resistance and the expectation of lower lows in 2009..

DOW and S&P Monthly


Expectation that Global Index markets would swing back into the November 50% level and then continue down into November's lows.

At this stage the expectation is that November's lows will form a robust support zone, but continue lower into December's lows.....

Dilernia Principle:- 2 timeframe wave pattern on the breakout.

Once December's lows are reached, then there is an expectation that market will swing back up to retest the Yearly low breakout (Septembers lows), and then continue down in 2009.

DOW Weekly

November's lows should be reached next week, which will coincide with the G20 meeting giving markets enough reason to reverse off their lows and swing back into the Weekly 50% level.

But because of the monthly 2 timeframe wave pattern, I've modelled a lower low in December before the market reverses back upwards.

With most breakout patterns price will come back and re-test the break before it continues lower.

We saw this with the October low breakout and now the continuation down, and I expect that market will swing upwards to re-test the Yearly breakouts and then continue down in 2009.

DOW 5-day pattern

Last Week's sell off was all about Monday continuing lower and then the breakout pattern on Wednesday.

Once Monday was trading below support there was an expectation of a 2 timeframe wave pattern down into Tuesday's lows.

And the rest of the Week in US markets was text book patterns....

Wednesday below the blue channel would result in a 5-day breakout.

Thursday would continue down into lower lows and then swing upwards into a higher Daily close.

This pattern was simply a 'short-timeframe' retest of the breakout, and then...

Friday would continue back down into the blue channel.

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DOW S&P Daily 8th Nov 2008 Weekly

DOW and S&P Monthly charts

October low breakout and expectation of price testing the November 50% levels and then continuing down into the November lows.

Last Week reversed into the Monthly 50% level and sold off....

DOW and S&P Weekly

Any continuation down will be defined by the Weekly 50% level.

At this stage price is trading below the Weekly 50% level, and Friday's trading is often a probability pattern which goes back and re-tests the 50% level and then continues down the following week.

If Friday was actually Tuesday, then I would favour more weakness down into the Weekly lows.

However Monday next week will actually be back above the Weekly 50% level.

Above the Weekly 50% level and the view is price is moving back towards the November 50% levels and Weekly highs.

Basically any down trend needs to sell off on Monday......

Last Week's sell off began with a breakout of support on Wednesday.

In conclusion:- my view still stands that markets are heading down into November's lows

However:- if price doesn't break Monday's support,(Monday sell off) then the view is, price will probably end up back around the Weekly highs by Friday next week.

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