DOW & S&P MonthlySET-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 cyclesBecause 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...
DOW S&P WeeklyIn 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.
