S&P DOW Weekly 29th August 2009

S&P 500

3rd Quarter Thrust pattern into 1038 has played out and stalled.

Eventually I would look for the S&P to rotate back down into the 50% levels, but at this stage even though the S&P has hit resistance @ 1038, price looks to be pushing upwards in September.

Upside targets will be defined by the September monthly levels below...

DOW S&P Monthly

Once the S&P had hit 1038 I would have liked to see the Weekly timeframe close below 1012, as this would have set-up a rotation down into the September 50% levels.

A rotation down would be part of a retest of the July breakout and using the September 50% level as support for another leg upwards.

Because price isn't below 1012 and more than likely to close the Month above this level, I favour a move up into the September highs.

Note:- September highs on the DOW futures matches the Yearly 50% level for this market @ 9822

For US markets to move higher I would think another 5-days of sideways price action above the August highs will see a move upwards in September.

Support DOW 9366

S&P 1011

DOW S&P Weekly 22nd August 2009

S&P Weekly bar chart

S&P and DOW have continued up in the 3rd Quarter and the S&P will complete the Yearly 50% levels by next week @ 1037.50.

Potential continuation upwards in the 4th quarter to 1102, however at this stage 1037.50 is vewed as a Target and resistance level since March lows and the 3rd Quarter 'thrust' pattern.

DOW S&P Monthly

My view this week was that US markets would reverse down from the lower August highs on Monday and move down into the September 50% level, and then continue higher to complete the Yearly 50% level.

That was based on last Friday's lower Weekly close below both 9366 & 1012:- Higher Weekly 'sell' pattern

There was a sell off on Monday, however the Market turned around and continued higher.

DOW S&P Weekly

Monday Sold down breaking previous support levels, and if US markets were going to go down price should have tested the 5-day 50% level and continued down on Wednesday

However, the 5-day 50% levels were tested on Tuesday butWednesday provided a HOOK pattern:- higher Daily close.

And as per BOOK, Weekly HOOK patterns favour a higher Weekly close.

DOW S&P Weekly 15th August 2009

DOW S&P monthly

With this week's failure to close above the August highs....

In my opinion next week will begin a slide back towards the July breakout levels over the next few weeks.




DOW S&P Daily charts

Monday and maybe Tuesday could remain range bound in the same range, but I'll begin to look for a continuation down towards the Weekly 50% level.

Of course certain 5-day pattern set-ups should be used for any down moves next week.

At this stage I haven't factored more upside in August even though I think markets will move higher and complete their Yearly 50% levels later on.

If markets are going higher it will be dependant on Market dynamics for September and their range, which are currently matching the Yearly 50% levels.

DOW S&P Weekly 8th August 2009

DOW S&P Weekly

US markets completed the move into the August highs with Friday closing below.

My expectation is that prices will begin to slip back over a number of weeks towards the Weekly 50% levels.

The first sign of the reversal will be price trading below the 5-day 50% level, but won't be confirmed until there is a 5-day low breakout of the range.

However, I'm not expecting the US markets to drop like a 'thud', I’m expecting the US markets to zig-zag their way back down, mainly within 5-day pattern rotations.


DOW S&P Monthly

We can see the breakout of the July high and extension towards August highs:- Dilernia Principle.

My view is now to reverse back down and retest the July breakout in August...

That could travel as far as the monthly 50% level, but that Monthly 50% level might be September's 50% level.

However, the first stage of the pullback is the Weekly 50% level.

Once that occurs I'm looking for a continuation upwards to complete the moves into the Yearly 50% level as previously described many times in the past few months.