DOW S&P Weekly 31st January 2009

DOW S&P Monthly

As per Monthly rejection patterns:- expectation that Global Index markets are heading down towards the January's lows, and then will continue down further into February's lows.

January continues down as part of the 2-month down trend towards February's lows:- Dilernia Principle

I would like to see US markets continue down into February's lows in the first 2 weeks of the month.

If this can occur it will complete a 2-month pattern in the first Quarter, and it will probably give markets the first decent bounce for Months.

Even though I think markets will go lower in 2009, I'm not factoring lower prices until the 2nd or 3rd Quarter.

Basically I would like to see a drive down into February's lows in the first two weeks, find support and then we could probably get a 25-30% bounce off the lows.

DOW S&P Weekly

"Another pattern that I favour after a 3 week trend, is a Weekly timeframe that actually closes higher, before the trend continues lower the week after that in the following month"

Last Week moved higher hitting the Weekly 50% levels and reversing down.

US markets can continue slightly upwards next week back into the February 50% levels before the trend continues downwards at the start of February....but it might not.

Basically the Weekly 50% levels will define the trend next week, and which direction the market will take.

S&P 5-day pattern

Monday moved up from support, which was part of my view of a higher Weekly close.

After 3 days of UP moves, if the Week was going to continue higher into Friday, then price should have remained above support on Thursday.

Once support failed on Thursday there is a natural continuation down for 2-days into Friday's support:- text book pattern

Once again Friday's support couldn't hold, which isn't surprising, because of my view of lower prices early in February.

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DOW S&P Weekly 24th January 2009

S&P Yearly 2009

Expectation that the S&P 500 should reach the Yearly lows in 2009 sometime in the 2nd quarter of this year, if not sooner.

Once around those lows I would pretty much think that the Market will begin to bottom out, and gradually rise upwards and stablise around those lows.

DOW S&P Monthly

Global markets are following the Monthly 'thrust' patterns down from the 50% levels and moving into a 2-month wave pattern into lower lows in February....

DOW S&P Weekly

"In the short-term if US markets move back above their Weekly 50% levels....I would continue to look for the next 5-day pattern to follow the trend down into Next week's Weekly lows."

As per Previous Weekly report, the price action in the both markets played out precisely, and I would continue to look for a move down into next week's lows, as price follows the Monthly trend lower.

However, another pattern that I favour after a 3 week trend, is a Weekly timeframe that actually closes higher, before the trend continues lower the week after that in the following month.

At this stage I can't guarantee a higher Weekly close, because early next week I favour more weakness, but if price stabilises in the first 2 days even without reaching the January lows, I would then see if there is a potential higher close by Friday.

If this is the case, then this sets up more weakness the Week after as price continues down into February's lows.

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DOW S&P Weekly 17th January 2009

DOW S&P Monthly

As per Monthly rejection patterns:- expectation that US markets are heading down towards theJanuary's lows, and then will continue down further into February's lows.

This follows my view of global markets making lower lows in 2009.....

DOW and S&P Weekly

Of course that changes in the short-term if US markets move back above their Weekly 50% levels.

But until that happens, I would continue to look for the next 5-day pattern to follow the trend down into Next week's Weekly lows.

Of course not every day is a down day, but the bias is to follow the move lower, simply based on the higher timeframe Monthly rejecton patterns.

If and when there is a Daily 'Hook' pattern over the Weekly 50%, which more often occurs in the 4th Week (next week is the 3rd week), then I can't see too much upside just yet.

Day-traders simply follow the 5-day pattern set-ups found in the Premium Report

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DOW S&P Weekly 10th January 2009

"All we have seen is price rotate back towards the Monthly 50% levels, and the market remains in SET UP A.

SET-UP A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower, eventually pushing the market into lower lows in 2009.

There is nothing stopping SET UP A continuing lower in the first Quarter"

Previous Weekly report



DOW and S&P Monthly

US markets continue to follow SET-UP A:- with the January 50% level rejecting price and sending prices lower into Friday.

At this stage the only conclusion is for US markets and other global Markets to continue down...

DOW and S&P Weekly

This week's reversal pattern down was set-up nicely with Tuesday's failure to close above the January 50% level, and Wednesday's break of the previous day's lows resulting in the Weekly timeframe closing on it's lows.

Friday's lower close below the Weekly 50% level set-ups further weakness next week.

Unless there is another Daily HOOK pattern over the Weekly 50% level early next week, I would expect US markets to follow the pattern down towards the Weekly lows, as part of the Monthly 50% level rejection pattern.

S&P 5-day pattern

In the Premium Report this week there were some extremely nice trading set-ups for day and swing traders.

Tuesday's BUY support, but the most robust pattern was Wednesday 'Short' the break Support (yellow) with the view of price moving down into the Blue channels.

Thursday and Friday followed the 5-day filters precisely using the support set-ups to trade the daily trends.

I believe that during any given week there are only 2 high probability
set-ups, and it's those days that provide the best trades. The rest of the
week it is trying to minimise risk and stop over-trading.

This is the only report you'll find that strips the market down from
top to bottom, and provides the most comprehensive analytical view of global
markets that you'll find anywhere.

You will continue to be at the forefront of statistical reliability,
historical profitability and optimal price movements based on the Dilernia
Model, Methodology and Trading Principles. ©

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DOW S&P Weekly 3rd January 2009

DOW CASH Yearly Chart

End of 2008 and the beginning of the new Primary cycles for 2009.

Trading range between the 50% levels and the 2009 lows, but there can be lesser timeframes (Monthly) that can extend price further.

At this stage my view in the first Quarter of 2009 is SET UP B....

Is the probability of markets moving back towards a 3-point level of 'TIME' before the market continues lower.

In this instance, Price in January would be rotating back towards the Yearly breakouts from 2008, the first Quarterly 50% level in 2009, and also the 3-month highs in January.

If that plays out in the First Quarter, then markets will begin to unwind and continue down towards the 2009 lows in the 2nd and 3rd Quarters for 2009

S&P 500 Yearly Chart

Same expectation on the S&P....

Rotate back towards the 2009 50% level which matches the 2008 breakouts, then continue into new lows for 2009...

DOW and S&P Monthly charts

"We also notice in the forward timeframe (January) that there is now a higher low in the forward monthly timeframe, which often favours higher prices" Previous Weekly Report

This week saw higher prices, however all we have seen is price rotate back towards the Monthly 50% levels, and the market remains in SET UP A.

SET-UP A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower, eventually pushing the market into lower lows in 2009.

There is nothing stopping SET UP A continuing in the first Quarter......

S&P Weekly

As pointed out in the Premium Report on Tuesday......

Monday has 'HOOKED above the Weekly 50% level....

Dilernia Principle:- HOOK pattern favours higher prices into Friday.

This was also set-up because of the higher lows in the monthly timeframe in January, and the expectation of price rotating back towards the Monthly 50% levels.

Next Week:-

Higher Weekly open often favours a 2-day pullback in the new Week.....

Let's see how the market reacts after a 2-day pullback, especially trading below the January 50% levels.

Above January 50% levels and market is following SET UP B

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