DOW and S&P MonthlyLast week's trading was an extremely tight 5-day pattern, as was the case with most global index and currencies.
When we look at the Monthly timeframe using the Weekly charts, last Week's trading started on the 30th November and has now closed finally moving into December's timeframe.
Whether that had anything to do with the tight 5-day pattern is debatable.
I still have the view that most Global indexes will continue down into lower lows in December and complete the 2-timeframe wave pattern before any potential reversal upwards.
However, I've always maintained that for any trend to continue lower in 2009, price needs to swing back upwards and move back to the 3rd Quarter breakouts (September).
This will result in the retesting the 2008 Yearly timeframe lows to verify the breakout and then move lower in 2009.
DOW and S&P Weekly
Things begin to get interesting next week......
The important part on any trend continuating lower, or even any major trend reversal begins with the 3-week channels, in this instance the 3-week highs.
Any long term trend won't change unless there is a breakout above the 3-week highs, and then continues above the Monthly 50% level.
This normally occurs with a Friday close above the Weekly highs and the following week continues higher.
Any continuation of the long term trend (down) normally occurs with price retesting the 3-week highs and then rejecting downward, as it continues with the trend and market path lower Monthly lows.
Last week's view was a higher Weekly open and a 2 day down move. That played out and then the next 3 day's consolidated.
Next Week:- I have the expectation that US markets are moving towards the Weekly highs next week.
Around those highs and the view is resistance ( until broken with a Friday close above), with the expectation of a move down into December's lows to complete the 2-monthly timeframe pattern.
A breakout and Friday close above those 3-Week highs, and my view is that US markets are moving back towards higher Monthly close in December, as it goes looking to move back to re-test the 2008 Yearly breakout early in 2009.
The trend remains down and the expectation is that market's will continue down, but any reversal upwards in the medium term will begin with a breakout above those 3-week highs confirmed with a Friday close above them.
Those 3-week highs in both the DOW and S&P are extremely valid resistance zones, and have been all year.
