S&P500 (e-mini ) 29th MAY 2010 Weekly

S&P Yearly, Quarterly and Monthly

S&P Trading around the 3-Quarterly 50% level and the MAY lows, and I expected a little more upside this week for a move towards the June 50% levels that begin next week.

As explained in last week's report there is a potential 2nd month down move in June from the monthly 50% levels, and some of the biggest sell-offs occur in the last month of the Quarter when price begins from the monthly 50% level.

3d Quarter 'thrust' pattern into the 2009 Yearly 50% level has completed from the March lows.

Any further UP moves would need to align with the 4th Quarter 50% level, and continue up from the 4th quarter 50% level and into the highs, which aligns with the Yearly 2010 highs.

If that happens then price can push back down into the Yearly 50% level in 2010 and consolidate for a number of Quarters during next year and move into a long-term sideways pattern until the 2nd half of 2010"...... Weekly report 15th August 2009

What happens if the S&P follows last year's forecast?

if the S&P 500 follows the same pattern and moves down into the 2010 50% level, that is 100 points lower or 1000 points in the DOW.

In conclusion:- It's too early to get comfortable with current support levels, as there are a couple of lesser timeframes that still have bearish patterns.

Note:- the Weekly timeframe will still remain within the MAY timeframe and won't begin until the week after, which may result in another 5-day sideways pattern

S&P (e-mini ) 22nd MAY 2010 Weekly

S&P Weekly

The past 2 weeks has seen precise text book patterns based on the Weekly low breakout @ 1173 and subsequent price action down into this week's lows @ 1055.

And as per Friday's Daily report....

"If and when those Weekly lows and Friday lows occur I'm expecting a larger swing pattern back towards the June 50% levels"

Therefore our support next week is 1076.25

and the rotation is back towards the Weekly 50% levels.

S&P monthly

Current support is valid during MAY and any rotation is towards the June 50% level.

Once price reaches the June 50% level there is a possible continuation down in the following month

Why?

Whenever there is a Monthly high reversal pattern they usually move in 2-month wave patterns.

Most reversal patterns occur in the previous month and then follow the trend down into the current month, find support and then the trend continues higher once above the monthly 50% level.

This reversal pattern started in MAY therefore June becomes the 2nd month.

Therefore any reversal back towards the June 50% level must be viewed as resistance until proven wrong.

S&P Quarterly and Yearly

The basic premise on the Quarterly and Yearly timeframes is that any subsequent weakness in June or trading below the Quarterly 50% level @ 1074...

and then trend is to continue down towards the Yearly 50% level @ 969 in the 3rd Quarter.

S&P (e-mini ) 15th MAY 2010 Weekly

S&P Monthly

S&P continues to trade below the Monthly 50% level, and at this stage we have an expectation that price is rotating down towards the June lows.

The current 'major' support levels around the 3-quarterly 50% level & MAY lows are extremely robust, and it doesn't necessarily mean that the trend will continue down into a double monthly low but there are a number of patterns in the lesser timeframes that will provide some pre-emptive moves.


S&P Weekly and 5-day pattern

Last week's price action was 'pre-emptive' as it played out as expected.

A number of precise text book patterns over the past 2 weeks.

Previous Week saw a Weekly low breakout and trend spike down into the
MAY lows.

Pre-emptive:- This week saw the 3-day counter-trend move beginning from the
Weekly 50% level and retesting the previous Weekly low breakout and then
a Thursday sell pattern with the expectation of a lower Friday close.

Normally Thursday has a much greater range on the
downside (trading below the monthly 50% levels once again), but Friday’s break verified the downward move into the Weekly 50% level and Friday’s lows"


Next Week:- Friday's 5-day low support can often provide a 2-day reversal pattern upwards using the Weekly 50% level as a guide.

However, I'm not sure that the market will continue much further from Wednesday.

The reason being is that a Weekly breakout (1168-73 previous Week), will often extend down towards the Weekly lows.

Currently that hasn't happened, which means anything below the Weekly 50% level and the bias is to continue towards the Weekly lows either next week or it could take a number of weeks to continue to drift down into the Weekly lows.

DOW S&P 8th MAY 2010 Weekly

DOW S&P Monthly

As mentioned a few weeks ago...(17th April)

"The UP trend won't continue until the start of the next month after revisiting the MAY 50& levels

or

# follows a double monthly low move into major support levels and the Quarterly 50% levels.(Yellow)

Don't discount this, because the US markets will revisit the 3-month lows during the year and it hasn't as yet. "

Treat US markets as part of a double monthly low pattern into June, using the MAY 50% levels as resistance.

That means, I'm expecting these levels to hold support during MAY, but possibly double dip into lower lows during June.

DOW S&P Weekly

There is a breakout of the weekly lows, which should continue down into the Weekly lows this week.

If that happens then we look for a swing back towards the MAY 50% levels.

Note:- If Monday closes higher but below the Weekly 50% level, I would normally look at this price action as a 'short' trade:- sell resistance and a higher daily open on Tuesday

However, I have also see these exact pattern continue higher and move into a 3-day UP move to retest the previous Weekly lows.

That means that by Wednesday price can be trading above the MAY 50% level, but from Thursday onwards look for a move back down into the lows.

DOW S&P 500 1st MAY 2010 Weekly

DOW S&P Monthly

Break and extend reversal pattern from April highs down into the monthly 50% levels failed to play out. Instead the April highs formed a resistance zone which now disappears and shifts higher in MAY

There is an expectation that price would continue towards the 2nd Quarter highs, but normally that occurs from the Monthly 50% levels in MAY.

Next week both markets align with the Red levels (single monthly 50% level & 3-week 50% level), and it becomes and each way bet on direction.

Whilst below those levels price is moving down into the MAY 50% levels:- and then it might take a few weeks for US markets to find support (3-week consolidation) and then continue upwards in June to complete the 2nd Quarter highs.

Or next week's continues upwards, as the April high resistance levels disappear and the MAY highs align with the 2nd Quarter highs in the S&P @ 1230.75

Daily report out on Monday

DOW S&P 24th April 2010 Weekly

DOW S&P Monthly

Double top high in the 2nd quarter has failed to materialise with Friday's close above the April highs in the DOW.

There is still 1 week to go until MAY begins, but at this stage the target of 1230 in the 2nd quarter for the S&P 500 is going to be reached much quicker than I expected.




DOW S&P Weekly

The entire double top scenario played out accordingly until Wednesday's failure to continue down into the 5-day lows, and with Friday's close above the 5-day highs this is likely going to push the Markets upwards on Monday.

Based on the Weekly timeframe & range, it might take another 2-weeks until 1230 is reached as price remains within the 5-day range.

There is still a slight chance that the 3-week lows are tested before 1230 is reached, but price would need to be trading below the weekly 50% level.

Daily report out on Monday.

DOW S&P 17th April 2010 Weekly

DOW S&P Monthly

2nd Quarter target in the S&P is 1230 and we can see the MAY highs are now aligning with the upper target.

However, we are now trading the completion of the break and extend pattern during this quarter and the expectation that price is moving back towards the 3-month 50% levels.

The most robust set-up for a continuation of the down trend is a double top on the DOW early next week @ 11082...

And the holding pattern is until the start of MAY.

The UP trend won't continue until the start of the next month.

There are three possible patterns....

A. moves down into the MAY 50% level and then continues higher, as per 4th Quarter in 2009

B. moves down into the April 50% level and then consolidates for a couple of weeks below and then continues back towards the highs, as per first Quarter in 2010.

C. follows a double monthly low move into major support levels and the 3-Quarterly 50% level.

Don't discount #3, because the US markets will revisit the 3-month lows during the year and it hasn't as yet. We saw a similiar pattern in the Aussie market in the first Quarter.


Therefore:- depending on the how many contracts traded the bias is to hold into the the first target @ 1139 and then into the close of the month.

If there is a breakout of the 3-week lows next week, then there should be another 'short' set-up using the 3-Week 50% level the week after.