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.

Day-traders simply follow the 5-day pattern set-ups found in the Premium Report

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DOW S&P Weekly 10th January 2009

"All we have seen is price rotate back towards the Monthly 50% levels, and the market remains in SET UP A.

SET-UP A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower, eventually pushing the market into lower lows in 2009.

There is nothing stopping SET UP A continuing lower in the first Quarter"

Previous Weekly report



DOW and S&P Monthly

US markets continue to follow SET-UP A:- with the January 50% level rejecting price and sending prices lower into Friday.

At this stage the only conclusion is for US markets and other global Markets to continue down...

DOW and S&P Weekly

This week's reversal pattern down was set-up nicely with Tuesday's failure to close above the January 50% level, and Wednesday's break of the previous day's lows resulting in the Weekly timeframe closing on it's lows.

Friday's lower close below the Weekly 50% level set-ups further weakness next week.

Unless there is another Daily HOOK pattern over the Weekly 50% level early next week, I would expect US markets to follow the pattern down towards the Weekly lows, as part of the Monthly 50% level rejection pattern.

S&P 5-day pattern

In the Premium Report this week there were some extremely nice trading set-ups for day and swing traders.

Tuesday's BUY support, but the most robust pattern was Wednesday 'Short' the break Support (yellow) with the view of price moving down into the Blue channels.

Thursday and Friday followed the 5-day filters precisely using the support set-ups to trade the daily trends.

I believe that during any given week there are only 2 high probability
set-ups, and it's those days that provide the best trades. The rest of the
week it is trying to minimise risk and stop over-trading.

This is the only report you'll find that strips the market down from
top to bottom, and provides the most comprehensive analytical view of global
markets that you'll find anywhere.

You will continue to be at the forefront of statistical reliability,
historical profitability and optimal price movements based on the Dilernia
Model, Methodology and Trading Principles. ©

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DOW S&P Weekly 3rd January 2009

DOW CASH Yearly Chart

End of 2008 and the beginning of the new Primary cycles for 2009.

Trading range between the 50% levels and the 2009 lows, but there can be lesser timeframes (Monthly) that can extend price further.

At this stage my view in the first Quarter of 2009 is SET UP B....

Is the probability of markets moving back towards a 3-point level of 'TIME' before the market continues lower.

In this instance, Price in January would be rotating back towards the Yearly breakouts from 2008, the first Quarterly 50% level in 2009, and also the 3-month highs in January.

If that plays out in the First Quarter, then markets will begin to unwind and continue down towards the 2009 lows in the 2nd and 3rd Quarters for 2009

S&P 500 Yearly Chart

Same expectation on the S&P....

Rotate back towards the 2009 50% level which matches the 2008 breakouts, then continue into new lows for 2009...

DOW and S&P Monthly charts

"We also notice in the forward timeframe (January) that there is now a higher low in the forward monthly timeframe, which often favours higher prices" Previous Weekly Report

This week saw higher prices, however all we have seen is price rotate back towards the Monthly 50% levels, and the market remains in SET UP A.

SET-UP A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower, eventually pushing the market into lower lows in 2009.

There is nothing stopping SET UP A continuing in the first Quarter......

S&P Weekly

As pointed out in the Premium Report on Tuesday......

Monday has 'HOOKED above the Weekly 50% level....

Dilernia Principle:- HOOK pattern favours higher prices into Friday.

This was also set-up because of the higher lows in the monthly timeframe in January, and the expectation of price rotating back towards the Monthly 50% levels.

Next Week:-

Higher Weekly open often favours a 2-day pullback in the new Week.....

Let's see how the market reacts after a 2-day pullback, especially trading below the January 50% levels.

Above January 50% levels and market is following SET UP B

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DOW S&P Weekly 27th December 2008

DOW Monthly charts

US markets are still in SET-UP A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower, eventually pushing the markets into lower lows in 2009.

This is the last week of trading for 2008, so it's important where markets close on the last day, as they will set-up the Primary cycles for 2009 and how far markets will go lower in the new year.

In the mean time next week's trading will still be defined by the 3-week highs, and SET UP B won't occur until there is a Friday close above those highs. (White line)

S&P 500 Monthly charts

SET UP B is the probability of markets moving back towards a 3-point level of 'TIME' before the market continues lower.

In this instance, Price in January would be rotating back towards the Yearly breakouts from 2008, the first Quarterly 50% level in 2009, and also the 3-month highs in January.

We also notice in the forward timeframe that there is now a higher low in the forward monthly timeframe, which often favours higher prices.

I still think all global markets will follow SET-UP B first before continuing lower in 2009, but if it doesn't markets will still go lower in 2009.

DOW S&P Weekly 20th December 2008

DOW Monthly Futures chart

US markets are still in SET-UP A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower,eventually pushing the markets into lower lows in 2009.

When we looks at the Aussie Market (click below) we can see that price has been supported around its November lows, but capped below its 3-week highs for a number of weeks now.

http://www.austindex.blogspot.com/


In the DOW and S&P, those 3-week highs have only just caught up with Price with this week's completion of trading.

The Market can only continue higher when there is a breakout of those 3-week highs.

If US markets can close above those 3-week highs in December, then the pattern of price rising upwards from January's 50% level towards the 3-month highs would be the pattern I favour.

This is simply based on price rotating back into the higher timeframe midpoints before the next trend continues lower in the new year.

For every breakout price will normally come back and test the breakout in the next Timeframe and then continue with the trend. A perfect example was October breakout and then the rotation back into the November 50% level, and then Drive down into lower lows in November.

In this instance price in January would be rotating back towards the Yearly breakout @ 10414, the Quarterly 50% level, and also the 3-month highs in January

The ideal set-up for resistance and then the next leg down into lower lows in 2009.

DOW and S&P Weekly

At this stage US markets are consolidating above their Weekly 50% level, and traders should trade on the side of those Weekly 50% level.

Note:- Those 3-week highs in both the DOW and S&P are extremely valid resistance zones, and have been all year"

With these 3-week highs resisting price and finally catching up with price this week, if US markets can't breakout of those highs in December, the bias would be to continue lower in 2009 which is what I think will happen eventually, as markets follow their Primary cycles in the new year.

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DOW S&P Weekly 13th December 2008

"Those 3-week highs in both the DOW and S&P are extremely valid resistance zones, and have been all year"



DOW and S&P Weekly

Last week's report and I had the view that US markets were rising up into the 3-week highs and hit resistance.

US markets then reversed down into the Weekly 50% level and found support on Friday.

As long as US markets remain above the Weekly 50% level I have the view that in the Short-term markets are rising higher towards the December 50% levels.

DOW CASH Yearly

The white line shown in the above chart is the 3-week highs.

We can see that the entire year the trend has been heavily dictated by those 3-week highs. Only briefly had price moved upwards in April but quickly reversed back down in May 2008, after reaching the MAY resistance tops.

And currently those same 3-week highs are resistance any further gains in this month after finding bottoms in the November timeframe.

And in 2009 we can see where the DOW will end up at.....

Make no mistake about it, the DOW along with the S&P will be trading around those 2009 lows:

Dilernia Principle follows 2-timeframe wave patterns, in this instance the Yearly timeframe.

DOW Monthly Futures

Currently the Market is in Set-up A:- drifting lower below the Monthly 50% levels and following the dynamic timeframes lower, as the 3-week highs pushes the market lower.

Eventually price will reach the 2009 Yearly lows, but it still won't be the lows for 2009. But i'll get back to that in a few weeks time in the new Year.

Set-UP B:- Is what I think will happen or hope to happen.

SET-UP B is based on a timeframe breakout.

A Timeframe breakout normally comes back and retests the breakout at the start of the new timeframe, in this instance the Yearly breakout @ 10414 in 2008, and the start of the new Yearly timeframe in 2009.

Therefore my expectation is that early in the first Quarter price will try to make it's way back towards 10414, and then continue lower, but first we still need to see a Friday close above those 3-week highs.

That price action meets the Yearly timeframe breakout.

Once that occurs I would be looking for the next leg of the down trend into the 2009 lows.

If SET-UP B doesn't occur soon, there is a possibility that SET-UP A continues and markets drift lower from January as the new Monthly timeframe continues the trend lower towards those Yearly lows.

DOW S&P Weekly 6th December 2008

DOW and S&P Monthly

Last week's trading was an extremely tight 5-day pattern, as was the case with most global index and currencies.

When we look at the Monthly timeframe using the Weekly charts, last Week's trading started on the 30th November and has now closed finally moving into December's timeframe.

Whether that had anything to do with the tight 5-day pattern is debatable.

I still have the view that most Global indexes will continue down into lower lows in December and complete the 2-timeframe wave pattern before any potential reversal upwards.

However, I've always maintained that for any trend to continue lower in 2009, price needs to swing back upwards and move back to the 3rd Quarter breakouts (September).

This will result in the retesting the 2008 Yearly timeframe lows to verify the breakout and then move lower in 2009.

DOW and S&P Weekly

Things begin to get interesting next week......

The important part on any trend continuating lower, or even any major trend reversal begins with the 3-week channels, in this instance the 3-week highs.

Any long term trend won't change unless there is a breakout above the 3-week highs, and then continues above the Monthly 50% level.

This normally occurs with a Friday close above the Weekly highs and the following week continues higher.

Any continuation of the long term trend (down) normally occurs with price retesting the 3-week highs and then rejecting downward, as it continues with the trend and market path lower Monthly lows.

Last week's view was a higher Weekly open and a 2 day down move. That played out and then the next 3 day's consolidated.


Next Week:- I have the expectation that US markets are moving towards the Weekly highs next week.

Around those highs and the view is resistance ( until broken with a Friday close above), with the expectation of a move down into December's lows to complete the 2-monthly timeframe pattern.


A breakout and Friday close above those 3-Week highs, and my view is that US markets are moving back towards higher Monthly close in December, as it goes looking to move back to re-test the 2008 Yearly breakout early in 2009.


The trend remains down and the expectation is that market's will continue down, but any reversal upwards in the medium term will begin with a breakout above those 3-week highs confirmed with a Friday close above them.

Those 3-week highs in both the DOW and S&P are extremely valid resistance zones, and have been all year.