DOW Monthly Futures chartUS markets are still in SET-UP A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower,eventually pushing the markets into lower lows in 2009.
When we looks at the Aussie Market (click below) we can see that price has been supported around its November lows, but capped below its 3-week highs for a number of weeks now.
http://www.austindex.blogspot.com/
In the DOW and S&P, those 3-week highs have only just caught up with Price with this week's completion of trading.
The Market can only continue higher when there is a breakout of those 3-week highs.
If US markets can close above those 3-week highs in December, then the pattern of price rising upwards from January's 50% level towards the 3-month highs would be the pattern I favour.
This is simply based on price rotating back into the higher timeframe midpoints before the next trend continues lower in the new year.
For every breakout price will normally come back and test the breakout in the next Timeframe and then continue with the trend. A perfect example was October breakout and then the rotation back into the November 50% level, and then Drive down into lower lows in November.
In this instance price in January would be rotating back towards the Yearly breakout @ 10414, the Quarterly 50% level, and also the 3-month highs in January
The ideal set-up for resistance and then the next leg down into lower lows in 2009.
DOW and S&P WeeklyAt this stage US markets are consolidating above their Weekly 50% level, and traders should trade on the side of those Weekly 50% level.
Note:- Those 3-week highs in both the DOW and S&P are extremely valid resistance zones, and have been all year"
With these 3-week highs resisting price and finally catching up with price this week, if US markets can't breakout of those highs in December, the bias would be to continue lower in 2009 which is what I think will happen eventually, as markets follow their Primary cycles in the new year.
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