DOW S&P 28th November 2009 Weekly

DOW & S&P Monthly

SET-UP B:- On most occasions will complete a double monthly high pattern, in this case December highs.

If or when those highs are reached, I can't see US markets continuing with the trend without a 3-month cycle reversal pattern in 2010.

DOW larger timeframe cycles

Because the larger cycles in the market, I favour a rotation down in 2010 back into the Yearly 50% levels.

I mentioned this probably over 6 months ago, that price will go looking for a retest of the breakout from the previous year (2008) and match Quarterly highs and then most likely reverse down in 2010.

The current high in the 4th Quarter is matching the 2008 breakout, and in my opinion should reverse back into higher timeframe 50% levels coming into the end of 2009 and/or early 2010.

DOW S&P Weekly

In a normal UP trend price would come down into the Weekly 50% levels and then continue with the trend. Once that occurs price will continue with the 2nd month wave pattern into the December highs.

The most robust pattern would have been a down move early last week on Monday and Tuesday last and then make a higher highs into Friday and push upwards into the December highs. This would complete the 2-month wave pattern in this 3-month cycle and we begin to look for larger cycle rotations back down later this month or early next Year.

Instead last week pushed upwards early and then reversed back down into the Weekly 50% level on Friday finding support.

What's the chance of the market moving higher?

Whenever the 3-week lows match the monthly 50% levels, these become robust support patterns that will often push the market higher in the following month. This exact same pattern occurred 2-months ago September and into October highs.

However, a major reversal pattern will always be confirmed when both levels break:- monthly 50% levels and 3-week lows.


In the short-term:-

The 50% level @ 1089.50 on the S&P 500 will define whether Monday pushes upwards and back into the 3-day cycle highs...

0r below 1089.50 price moves down into the 3-week lows, and Tuesday aligns with the start of the new month (December 50%)

Basically you don't want to be holding longs on the S&P on Tuesday with price is breaking SUPPORT.

S&P 500 Futures 21st Nov 09 Weekly

"Even though there is an expectation that price can continue towards 1126 in the 4th quarter, that might not happen next week,

The most robust pattern for any higher moves towards 1126 would be a choppy 5-day sideways pattern with the bias to drift down into the weekly 50% levels by next Friday...

And then continue higher the week after that using support"

Previous Weekly Report

SPI Monthly and Weekly

S&P 500 hits the Weekly highs and drifts down into a lower Friday close.

The question is now whether the S&P 500 continues upwards in December to complete the move @ 1126...

Or there is a similar pattern as October, and a last week reversal pattern down into the monthly 50% levels once again.

At this stage I'm treating the market as a reversal pattern until Tuesday.

If the market is going to go down then Monday should once again spike upwards but then drift back down into the same levels as Friday's lows.

If that happens then Tuesday could end up a trending down day and heading down as a mirror image of 4 weeks ago.

What about the move towards 1126?

If Tuesday continues down into 5-day lows, which will probably match the Weekly 50% level @ 1076 and price reverses off these levels and closes in the middle of the 5-day range....

Then my view is that markets remained supported with a bias to continue upwards into December.

S&P 500 Futures 14th Nov 09 Weekly

S&P Monthly and Weekly

Expectation that last week’s SET-UP B would continue with a 3-day rally into the highs and then begin to hit resistance levels once again.

As my previous report mentioned, upside target in the 4th Quarter is 1126, and we can see a shift in the weekly range towards those highs next week.

However, even though there is an expectation that price can continue towards 1126, that might not happen next week, as there is a possibility of another 5-day sideways pattern around these levels:- higher timeframe resistance.

The most robust pattern for any higher moves towards 1126 would be a choppy 5-day sideways pattern with the bias to drift down into the weekly 50% levels by next Friday...

And then continue higher the week after that using support.

S&P 500 Futures 7th Nov 09 Weekly

S&P monthly

The previous week’s reversal down and close above the 3-week lows and November 50% levels were part of the B Set-up….

B Set-up is price continuing higher within the 4th Quarter and moving back towards the monthly highs once again, with the upper target around 1126

S&P Weekly

Even though there was an expectation of SET-UP B occuring, I need to verify any higher timeframe support using lesser timeframe patterns the validate the trend.

That had to be a cross-over of the Weekly 50% level and change of the 3-day cycle to verify support:- Thursday.

Next week is simply trading on the side of the weekly 50% levels with the expectation price is heading higher.

I would have preferred Friday to close on it's lows and then use a lower Monday open to trade longs using a number of 50% levels as support for a 3-day UP move.

However, the new week will begin from a higher Weekly open, which often begins with a 2-day reversal pattern, but because there are no lines of least resistance until much higher prices, then if it's above 1061 it's going up.

Below 1061 and it's part of a 2-day stall pattern