DOW S&P Weekly 18th October 2008

DOW Yearly

DOW trading in a range below the Yearly 2008 lows with the expectation that price will continue lower in 2009

S&P Yearly

Same expectation:- Price to remain below these lows in the 4th Quarter and then continue down into 2009 low.

DOW and S&P Monthly Futures

"October lows resistance (breakout forms resistance), and the trend guide for the 4th Quarter will be defined by the November 50% level.

Price will make it's way back towards the breakout of the 2008 lows late in this 4th Quarter or early in the first Quarter in 2009 and continue lower from 2009."

Previous Weekly report

At this stage the expectation remains that price will remain below October lows and then most likely move down into November's low:- Thrust pattern from the 50% level.

Once it reaches November lows, I'd begin to look for price to begin to make it's way slowly upwards :- retest the Yearly breakout lows (September's lows as shown above)

DOW 5-day pattern


"In the Short-term:- Hedge funds will continue to play around with the same 5-day pattern each day....

Because if price remains below the October lows and closes below the October lows on the last day of this month, then there is an expectation that price will continue down into November lows" Previous Weekly Report

And I expect the same to continue for the next couple of weeks until the end of October....

Day traders:- Simply Trade the 5-day patterns of support/resistance

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DOW S&P Weekly 11th October 2008

"The worse case scenario, which I didn't want to see is now playing out.

A Monthly and Quarterly close below the Yearly lows constitutes a breakout, which will lead to further erosion in stocks prices in the 4th Quarter...and a bear market of lower lows into 2010.

At this stage Prices are looking to go lower and will struggle to remain above the October 50% level, and probably sometime in the next quarter the S&P will end up around 1000 before any potential reversal up into the Yearly 2009 50% level, and then another leg down into 2009"

Previous Weekly report

DOW Weekly.....

I expected weakness in the 4th Quarter, and I expected another down leg in 2009, but I didn't expect the carnage that occurred this week.

Once last Friday closed below the Yearly lows (support) on the last day of the Month and Quarter the only way was down, with the DOW moving into 100% breakout of the range before finding any support in the market.

There are still over 2 months to go before this year ends, but where price closes in 2008 will determine how far markets go down into 2009.

As previously pointed out, the lower it closes in 2008 the further it goes down into 2009.

The only redeeming factor in this current price action is:- price will go back and re-test the 2008 breakout some time before the market continues down the following year

S&P Weekly

I normally have a fair idea on price action and the direction of the market using dynamic support and resistance zones within each higher timeframe.

The Previous Friday (3rd October) closed below major support zones, therefore I factored in that the 4th Quarter would continue down, but more often than not price moves in Monthly 'step' formations as it travels within the Primary range (Yearly).

Once price closed below the Yearly lows, my view was that global markets were heading down into the 4th Quarter lows.

The crash pattern didn't occur until price broke out of those 4th Quarter lows, and then it was a Free-fall:-Market CRASH

S&P 5-day pattern

Once the 4th Quarter lows failed to hold there were no more higher timeframe support levels in the market, and each day followed the 5-day pattern of rotating towards the 50% level and then extending outward towards the extreme each day.

My Market Crash didn't occur until Tuesday:- breakout of the 4th Quarter lows, but it wasn't helped by the previous Friday close below the Yearly lows.

Hedge funds had a field day due to the size of the trading ranges each day, with Friday having a 1000 point range from top to bottom.


S&P Weekly and Daily charts

So what do I Think will happen?

Long term:- Price will make it's way back towards the breakout of the 2008 lows late in this 4th Quarter or early in the first Quarter in 2009 and continue lower from 2009.

October lows resistance (breakout forms resistance), and the trend guide for the 4th Quarter will be defined by the November 50% level.

In the Short-term:- Hedge funds will continue to play around with the same 5-day pattern each day, and the Weekly ranges (green) shown in the Daily chart should be the trend guide for next Week.

I'm not going to pick the bottom in this market, the first sign will be a move above the 5-day 50% level, but will need to be confirmed with price trading above the Weekly 50% level.

Because if price remains below the October lows and closes below the October lows on the last day of this month, then there is an expectation that price will continue down into November lows.

If that's the case:- then around November lows could provide the ideal 'swing' low for a swing back towards the 2008 lows breakout

S&P DOW Weekly 4th October 2008

S&P Weekly Cash

In September US markets had reached their Yearly lows, and the expectation that any up trend in the 4th Quarter was dependant on the October 50% level.

The best case scenario was:- a 4th Quarter rise but will eventually lead to lower price is 2009.

The worse case scenario, which I didn't want to see is now playing out.

A Monthly and Quarterly close below the Yearly lows constitutes a breakout, which will lead to further erosion in stocks prices in the 4th Quarter...and a bear market of lower lows into 2010.

At this stage Prices are looking to go lower and will struggle to remain above the October 50% level, and probably sometime in the next quarter the S&P will end up around 1000 before any potential reversal up into the Yearly 2009 50% level, and then another leg down into 2009.



DOW Weekly cash

A Set-up:- is the best case scenario but will eventually lead to lower prices in 2009.

B Set-up:- is the one that will probably play out for the rest of 2008, and much less likely that any rises in the 4th Quarter.

But everything is leading to lower prices in 2009....

DOW S&P Weekly Report 27th Sept 2008

S&P Cash Weekly

US markets found their lows in September and expectation that the last Quarter of 2008 will continue higher and slightly higher in 2009, before continuing lower in 2009.

But the up move in the last Quarter is simply dependant on the October 50% level.

DOW and S&P Weekly futures

All Trends are defined by the 50% levels as price thrusts outward, and price is still below the monthy 50% level.

With a shift in time price can still continue lower in October, but that's not my view in the last Quarter.

My view has always remained, once the Yearly lows are reach the last Quarter will rise higher......

DOW and S&P Daily futures

And we can see a major shift in resistance in the next few days.

What was resistance for many months can quickly become support in October, but i'm not expecting any higher moves in October than those highs in the previous Quarter.

At this stage the view is for the next Quarter to remain in a large trading range between recent lows and previous Quarterly highs.

So get your 'swing-trading' hats on for the next 3-months.

DOW S&P Weekly Report 20 Sept 2008

DOW Weekly

The DOW and most global markets hit their Yearly lows this week, and as I've pointed out previously, once these lower levels have been reached the expectation is for global markets to begin to move upwards in the next Quarter and close higher at the end of this year.



S&P Weekly cash:-

In 2008 with the breakout of the December lows from 2007, there was a market structure for global markets to move down into their Yearly lows.

The movement of price down into 1158 was based on the highest timeframe 'dynamic', that being the Yearly, but price will often zig-zag within lesser timeframe 'dynamics' until it gets there, which is often based on each Monthly timeframe.

Now the lows have been reached in 2008, the first sign of confirming the continuation upwards will need to be verified by a cross over of the October 50% level next month.

Once that occurs, the view is for the markets to continue towards the 3-month highs.

As I have been saying for weeks, the markets had to come down lower in this Quarter before a 3 -month counter -trend move upwards, and finally that completed this week....

However, any UP move in the next Quarter won't stop the inevitable:- global markets will go down into 2009.

Therefore how high we close in 2008, determines how far we go down into 2009, and global markets will go down in 2009, as shown in the chart above.

DOW and S&P Futures

Therefore the September 50% levels are still seen as resistance in this month, but with a shift in the Monthly timeframe in October, if any up trend is going to continue higher then price should be supported above the October 50% level and continue upwards into a higher close in 2008.

Regardless of any up moves in the next Quarter, and the SPIN you hear that the bear market has ended, there will be another severe down move in 2009

DOW S&P Weekly Report 13 Sept 2008

"Down trend continues with the push down from September 50% levels, with a shift in the Monthly balance points:- Expectation for next week is to continue down into next Week's lows .

If the trend is going to continue down, it wouldn't surprise me to see a re-test of September 50% level in the Week of contract expiry and then for price to continue lower"

Previous Weekly Report

DOW S&P Weekly charts

US markets tested their September levels early in the Week and were pushed lower.

This Week is contract expiry which often can see higher prices, but I can't see higher prices in US markets based on Market dynamics during this month.

I still see more sideways prices action with hopefully lower prices in this Quarter.

S&P Daily

This Week US markets gaped open higher based on the news that the FED was bailing out Freddie & Fannie, but that didn't last long.

US markets were pushed back down into their Weekly lows:- Monthly 50% rejection.

S&P 5-day pattern

As pointed out in the Premium report :- look for 2-day set-ups using the yellow channels within the Weekly timeframe.

Trade the break on Tuesday down into the lows. Use Wednesday's 50% level to trade down again.

Thursday:- was simply trade either side of the Yellow filter, as after a 2-day pattern extension the 3rd day doesn't have a probability on direction.

As pointed out....if Friday was going to move higher then price would come down into support and bounce closing higher.

S&P Weekly CASH


Therefore more sideways action this quarter, with hopefully a push down into 1158-73.

Whether it gets to 1158-73 in 2008 or not, this is the level that I will feel highly confident in that the 2008 lows have been set and US markets can begin a 3-month upswing to close out 2008.

Otherwise it's more sideways price action until then....But if prices are trading above the forward 50% level in the new Quarter (October) then the bias is to continue higher in Monthly step formation over the 3-month period.

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DOW S&P Weekly Report 6 Sept 2008

"The interesting part of the new month is the shift in the balance point in September....

If US markets are going to continue higher it should start with another 'pop' upwards in September and finally breakout.

If the trend is going to continue down, as part of my overall view, then the shift in time has resulted in a shift in Monthly support.....

Below September balance points in US markets, and things don't look so good..."

Previous Weekly report

DOW S&P Daily

Down trend continues with the push down from September 50% levels, with a shift in the Monthly balance points, breaking of the Weekly lows.

Expectation for next week is to continue down into next Week's lows .

Previous Weekly low breakout and next Week's 50% level will be viewed as resistance.

DOW and S&P Weekly Charts

"US markets remain in a sideways Weekly pattern below the Monthly 50% levels, and still remain below these levels with the 4th Week failing to breakout above....

I'm still bearish on Markets, as most robust counter-trend rallies begin from the Quarterly lows, and that isn't the case at this stage, even though July's lows were 'BUY' levels, but only towards the Monthly 50% levels and exit 'longs'."

Previous Weekly Report....

The Friday close below the 3-week cycle lows isn't a good sign for any higher moves in this quarter....

If the trend is going to continue down, it wouldn't surprise me to see a re-test of September 50% level in the Week of contract expiry and then for price to continue lower :- 3rd Week sell as per previous Weekly report.

The bias is to continue lower, but things don't go down in straight lines... they zig-zag between dynamic support and resistance.

5-day pattern using the filter and high probability patterns this week.

It started with the 'POP' upwards early in the week using the Monthly balance point towards the 5-day highs, but then reversed down closing below support, which pushes lower the next day.

As pointed out in Thursday's report:- a break of support on Thursday and price is following Weekly pattern lower with a breakout of the 5-day lows...

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