DOW S&P Weekly 28th February 2009

S&P 500 Yearly Model

2008 Yearly low breakout @ 1210.

Dilernia Principle:- Breakout of the timeframe and price moves to the extreme of the next timeframe

The extension down into 2009 lows should reach by March or early in the 2nd Quarter.

DOW Yearly Model


September 2008 breakout which matched the 2008 Yearly low breakout @ 10400

We will be reaching the 2009 lows in March, But these won't be the lows for the Year, as there will be a lesser timeframe that extends slightly lower pushing the market below, as we can see in the 2nd forward timeframe (green channels)


DOW S&P Monthly model

Both Markets are pushing down into their March lows

I would look for support around March lows, as they match the 2009 lows, looking for a swing back towards the Monthly 50% levels and 'stall'.

But it's still too early to tell whether lows in Marchwill be the lows for 2009, as the 2nd quarter from April will extend lower.
DOW S&P Weekly

Next Week:- Weekly and March lows will probably support the market for a number of days, as did the February lows until the Friday break.

In conclusion:- Once the 2009 lows are reached US markets will be nearing their lows of 2009

There will probably be a slight extension lower in the 2nd Quarter, but we are starting to get to the end of this down trending market in 2009

Once that occurs in the 2nd quarter, I'll be looking for a rounding bottom that will begin to make higher lows....

And the first sign will be price trading back above the Monthly 50% levels some time in the latter part of the 2nd quarter or the start of the 3rd Quarter of 2009.

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DOW S&P Weekly 21st February 2009

DOW Monthly

DOW completes the 2-month thrust pattern down from January’s 50% level into February’s lows:-- DILERNIA PRINCPLE

I mentioned at the start of February that a move down into the February lows in the first 2 weeks of the month has the potential to reverse upwards 25-30%.

The completion is occurring at the end of the 3rd week.

We have three scenarios….

SET-UP A:- reversal off the February lows next week back into the March 50% level and then continues the down, as it follows the Primary cycles into lower levels.

SET-UP B:- for any 25-30% reversal to occur, the last week needs to bounce and swing back towards 8280 over the next 5 days.

If that occurs then there is the view of a slight push higher in March to complete the remaining percentage move.

At this stage it’s occurring a bit late in the month for me to be confident that SET-UP B is going to play out.

Set-up B is a retest of the 3-month highs in March and then the
market continues down into lower lows in the 2nd Quarter.


SET-UP C:- fails to hold February’s lows and continues down in another breakout pattern, similar to October in 2008.

Regardless of any bounce off these support levels in February, or even if Set-up B occurs, US markets are going lower in 2009, as they need to complete the Primary target in the low 6000’s



S&P Weekly

Expectation the S&P was following the same pattern down, and this was confirmed with the break of the Weekly lows this week.

Expectation that the S&P has a little bit more room to move towards 723, before it finds it's lows.

If the DOW has completed the move but the S&P hasn't, then there has to be a large drive down next week lead by Financials

Note:- there is a Weekly low breakout this week, and it's not often that the market will reverse UPwards the following week.

The normal pattern is for the Weekly range to remain range bound below the Weekly 50% level and the Weekly lows;- Monthly support

If that is the case SET-UP B is looking less likely to occur.

DOW Weekly

Based on last week's breakout of the Weekly lows and completion down into February's lows....

It's looking more likely that SET-UP A is going to play out, unless there is a late rally next Friday upwards.

DOW 5-day pattern

The view was always that the DOW was heading down into February's lows, but we needed a breakout to occur for the down move to gather strength.

This occurred on Tuesday with the breakout of the 5-day lows and the continuation down.

In conclusion:- Any bounce of February's lows will be short-lived as there is a view of lower prices in 2009.

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DOW S&P Weekly 14th February 2009

DOW Monthly

Expectation that US market should complete the double Monthly low pattern around February's lows.

Once that occurs I'll be looking for a reversal back into the March 50% level, and then look for any sign of a continuation upwards.

As pointed out a couple of weeks ago, once price has finally hit the February lows, I'm looking for a 25-30% swing upwards, but then continue lower in the following Quarters.

S&P Weekly

Higher weekly open and reversal back down, and should continue lower the next 2 weeks.

Even though the S&P had closed above the monthly 50% level last Friday:- Hook pattern and higher Weekly close....

I wasn't convinced the market would go higher.

Once below the February 50% level price continued the downtrend into the Weekly lows.

S&P 5-day pattern

"Any down trend and reversal within the Weekly timeframe won't be confirmed until price has broken the 5-day filter (blue channel)"

Monday continued higher, but once Tuesday broke the 5-day filter @ 845, then the reversal pattern was verified, and the rest is history.

And I'm expecting lower prices to continue next week.

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DOW S&P Weekly 7th February 2009

"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.

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"

Previous Weekly Report

DOW Monthly

DOW has moved back into the Monthly 50% level in the first week of February.

These 50% levels define the trend, and whilst below the expectation is to continue down.

I would have preferred US markets to have actually closed this week on its lows and be pushing lower next week before a potential reversal back towards the Monthly highs.....

S&P Weekly

Because when we look at the S&P on Friday, price has actually closed above the Monthly 50% level.

This higher Friday close was set-up with Thursday's Daily HOOK pattern over the Weekly 50% level, which leads to a higher Friday close.

However, in any down trend the most robust levels of resistance have always been the Weekly highs.

Therefore around 886 is still viewed as Resistance until broken, with the view price is still heading lower.

Above 886 and the expectation is that the S&P is moving back towards 930-45.

I didn't want to see US Markets move up this week, because it doesn't clarify the Monthly cycles.

A Drive down and a reversal off the Monthly lows, and I would have looked for a move back towards the Monthly highs:- 25-30%.

At this stage I now have to treat the Weekly highs as resistance until broken

S&P 5-day pattern

Any down trend and reversal within the Weekly timeframe won't be confirmed until price has broken the 5-day filter (blue channel)

It started with Support on Monday, a reversal off Thursday's lows and move upwards.

And then on Friday, had continued upwards as part of the Weekly hook pattern.

And that will continue next week.

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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.

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