S&P Monthly
Two weeks ago I posted a chart that suggested that price would come down early in the 4th Quarter and then make a last move upwards in the 4th Quarter, and so far the first part has started.
My view over the next 3-months is based on the 4th Quarter 50% level holding and moving up into 2010 highs and then dropping back down
S&P Weekly and 5-day patternLast week's view was for an early 2-day UP move from the lower Weekly open using the weekly 50% levels as support, however the September highs at 1062 resisted and my preferred pattern of moving down into the 3-week lows played out.
S&P has moved down into the 3-week lows (1012), which is the pattern that I
wanted to see happen at the start of October.
In a Bull market, this level will normally hold & form a support base over the next 3-days and then continue higher in the same month to complete the 3-monthly cycle:- break and extend pattern from July into October/November highs.
In a bull market what I would normally look for is the 3-day high range to drop below 1038-1039 and then trade longs on the break. This is based on verifying support on a large timeframe (weekly), and then validate support in a lesser timeframe:- 3-day high breakout.
However, the S&P isn’t in a bull-market trend, all it has done is reverse back into the Yearly 50% levels and reject back down. The Primary cycle and trend is defined by the Yearly timeframe.
If the Trend is going to continue down then the same pattern canoccur:- consolidate for 3-days below 1038 and then continue down once again towards the October 50% level @ 997
At this stage the important part was Friday remaining above1012 and Friday's 5-day low support.
