DOW S&P Weekly 29th November 2008

DOW and S&P Monthly

November lows support, and 4th Week reversal back towards the December 50% levels next week.

Recent support will disappear next month and any further weakness and the expectation is to move down into December's lows.

Once those December lows are reached I have the view of global markets making their way into higher prices in early January.



DOW and S&P Weekly

Monday's rally and HOOK bar over the Weekly 50% level.....

Dilernia principle HOOK:- This often results in a higher prices into Friday, confirmed with Tuesday remaining above the Weekly 50% level and the remainder of the days continue higher into Friday.

At this stage whilst US markets are trading above their Weekly 50% level, the bias is to continue towards the Weekly highs which match the December 50% level:- resistance.

DOW 5-day pattern

In last Week's report I was looking for 2 day down move and then a reversal upwards, but when Monday moved above support then the price action was to follow the 5-day pattern higher.

This resulted in the HOOK Weekly pattern on Monday, and the rest of the week was simply trading on the side of support as it follows the 5-day pattern higher each day.

In conclusion:-

I have the view of lower Prices in December and down into December's lows.

But I have a view that in the short term, whilst prices are above the Weekly 50% level then the market path is to continue towards the Weekly highs and December 50% level.

However, being a higher Weekly open I have the view that early next week there should be a 2-day reversal to re-test the Weekly 50% level.

If those 2-day's are able to remain above the Weekly 50% level, then there could be another higher Friday close by next week into the December 50% levels.

If price isn't able to remain above the Weekly 50% level after a re-test of it.... then early December could see bear-trend continue down into December' lows to complete my 2-month pattern.

DOW S&P 22nd November 08 Weekly

DOW and S&P Monthly

US markets have acted precisely since the breakout of the October lows in the first week.

1.Price has remained below the October breakout.
2.Price has retested the breakout to confirm it in the 2nd week.
3.Price has rotated back into the November 50% level in the last week of October.
4.Price has move in a 'thrust' pattern from the November 50% level down in November's
lows this week.

5.And currently November's lows are supporting the market.

My view is that price will continue down into December's lows, and form a robust support zone.

And in late December or early January begin a major swing back towards the Yearly breakouts, which coincide with September's lows this year. (3rd Quarter lows)

DOW and S&P Weekly

I think there is going to be a short-term bounce next week, but then continue down in December.

However:- my preferred pattern would be to see Monday and Tuesday drive down into the Weekly lows (next Week), and then from Wednesday up into Friday continue higher back towards the December balance point.

What's going to push the market higher is Financials, and banking stocks aren't ready for any moves higher other than short-term 3-5 day up moves.

December's lows complete the double monthly low pattern, which can provide a relief rally similar to when the double monthly lows pattern occurred in March 2008.

DOW S&P Daily 15th Nov 2008 Weekly

S&P Quarterly and Yearly

4th Quarter breakout forms resistance and the expectation of lower lows in 2009..

DOW and S&P Monthly


Expectation that Global Index markets would swing back into the November 50% level and then continue down into November's lows.

At this stage the expectation is that November's lows will form a robust support zone, but continue lower into December's lows.....

Dilernia Principle:- 2 timeframe wave pattern on the breakout.

Once December's lows are reached, then there is an expectation that market will swing back up to retest the Yearly low breakout (Septembers lows), and then continue down in 2009.

DOW Weekly

November's lows should be reached next week, which will coincide with the G20 meeting giving markets enough reason to reverse off their lows and swing back into the Weekly 50% level.

But because of the monthly 2 timeframe wave pattern, I've modelled a lower low in December before the market reverses back upwards.

With most breakout patterns price will come back and re-test the break before it continues lower.

We saw this with the October low breakout and now the continuation down, and I expect that market will swing upwards to re-test the Yearly breakouts and then continue down in 2009.

DOW 5-day pattern

Last Week's sell off was all about Monday continuing lower and then the breakout pattern on Wednesday.

Once Monday was trading below support there was an expectation of a 2 timeframe wave pattern down into Tuesday's lows.

And the rest of the Week in US markets was text book patterns....

Wednesday below the blue channel would result in a 5-day breakout.

Thursday would continue down into lower lows and then swing upwards into a higher Daily close.

This pattern was simply a 'short-timeframe' retest of the breakout, and then...

Friday would continue back down into the blue channel.

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DOW S&P Daily 8th Nov 2008 Weekly

DOW and S&P Monthly charts

October low breakout and expectation of price testing the November 50% levels and then continuing down into the November lows.

Last Week reversed into the Monthly 50% level and sold off....

DOW and S&P Weekly

Any continuation down will be defined by the Weekly 50% level.

At this stage price is trading below the Weekly 50% level, and Friday's trading is often a probability pattern which goes back and re-tests the 50% level and then continues down the following week.

If Friday was actually Tuesday, then I would favour more weakness down into the Weekly lows.

However Monday next week will actually be back above the Weekly 50% level.

Above the Weekly 50% level and the view is price is moving back towards the November 50% levels and Weekly highs.

Basically any down trend needs to sell off on Monday......

Last Week's sell off began with a breakout of support on Wednesday.

In conclusion:- my view still stands that markets are heading down into November's lows

However:- if price doesn't break Monday's support,(Monday sell off) then the view is, price will probably end up back around the Weekly highs by Friday next week.

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DOW S&P Daily 1st Nov 2008 Weekly

DOW and S&P Yearly

US markets trading below 4th Quarter lows, and at this stage are struggling to get back over those lows.

At this stage it's too early to say whether US markets will continue up towards the 3rd Quarter breakout ( September's lows) but it's something I think will happen.

Once that happens then my view remains lower prices in 2009.

DOW and S&P Monthly Futures

11th October Weekly Report:- "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 and then another leg down into 2009

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

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


Since that Report the Market has reversed back up into the October low breakout and reversed back down.

This often occurs to verify the breakout, which more often than not leads to further weakness into the extended lows in the following month:- November lower lows

At this stage:- whilst price is below the November 50% level the expectation is that price is going to continue down into November lows.

DOW and S&P Weekly

Are US markets market going to continue up towards the November 50% levels early next week, or reverse down from next week and continue down into November lows?

I can't answer that until things begin to unfold... but a higher Weekly open and trading below the Monthly balance points, can easily sell down at the start of next week.

However certain things need to happen to verify any reversal.

Last Week was the first time that US markets have been able to 'HOOK' above the Weekly 50% levels and continue up into a higher Weekly close since August.

That's a good sign, but last time markets were above the Monthly balance points.

If there is going to be higher prices, basically Monday has to continue higher, and not reverse down from the 'Red' levels and close below the Weekly 50% levels....

That's certainly not a good sign for November.

But that favours my 11th October Report:- if price can move down into November lows, this will be the pattern that I think should finally get more Buyers appear pushing the market higher into the close of the 4th Quarter....

But will eventually lead to lower prices in 2009.

S&P 5-day pattern

Last week's rally was already modelled before it even started.

Once the 5-day blue filter crossed over from above to below on Monday... the breakout above the 5-day 50% level on Tuesday lead a rally to the 5-day highs.

This resulted in a HOOK pattern above the Weekly 50% level

And then the expectation were higher prices by Friday trading support each day:- higher weekly close by Friday.

DOW S&P Weekly 25th October 2008

DOW and S&P Yearly

Nothing has changed in what I've been saying for months, lower prices in 2009.

There is a 4th Quarter breakout (below 3rd Quarter lows), therefore the expectation remains that prices will remain below Septembers lows.....

DOW and S&P Monthly

October low breakout and expectation that November 50% level is the trend guide with further weakness down into November lows.

Exact levels will be defined after next weeks trading.


DOW & S&P Weekly

This week saw a lower weekly open a move back into the 50% level and then a rejection down towards the Weekly lows.

Next Week:- same pattern expectation


S&P 5-day pattern

"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"............ 11th October Weekly report

This week saw price follow the 5-day patterns precisely:- rotate...extend...rotate.

I expect next week to be no different.

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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