S&P Quarterly and Yearly
4th Quarter breakout forms resistance and the expectation of lower lows in 2009..
DOW and S&P MonthlyExpectation 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 WeeklyNovember'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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