DOW S&P Weekly 28th March 2009

DOW S&P Monthly

US markets continue to move upwards, and the trend for the 2nd Quarter is going to be defined by the April 50% level.....


DOW S&P Weekly

Any continuation upwards should complete the moves towards the Weekly highs.

That can happen early next week, but I'm factoring that over the next 2 days US markets continue to move sideways and then push upwards from early April.

Once those moves complete things begin the get tricky, as I'm not expecting too much more upside.....

S&P Monthly and Yearly

We can see in the CASH market the precise Monthly and Yearly lows on the S&P.

Those lows are extremely important, and any further upside can push towards 1037.

But that is more likely after a 2 month sideways pattern and the Month of MAY forms a double bottom above the April 50% level.

Then MAY should begin to move higher and JUNE should continue the move followed by a move towards 1137 sometime in the 3rd Quarter.

Therefore around the Weekly highs or even now I would be moving into CASH positions on stocks, especially Margin positions and TIME the new buying opportunity around MAY.

Because, if US markets reverse down from those Weekly highs and begin trading below the April 50% level later in the month, do not discount the market revisiting the Yearly lows one again.

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DOW S&P Weekly 21st March 2009

S&P Monthly

S&P completes the move into the March 50% level and stalls after reversing precisely off the double Monthly low pattern in March:- This is a text-book pattern.

These 50% levels are and have been major trend guides, as all trends originate from 50% levels and then extend outward.

But more importantly it's the Quarterly midpoint that's going to let traders know the trend direction:- does it continue higher or continue down into the Yearly low targets?

I still have a lower Yearly target to complete the Primary trend, but it wouldn't surprise me to see US markets move up from April and into the 3-months highs.

I mentioned week's ago that an early move down into the Monthly lows could provide a 25-30% up swing in the market, especially after a double monthly low pattern, and if that's the case that move would take it into April's highs.

DOW S&P Weekly

At this stage there is still over 1 week to go until April begins, and I'm looking for next week to simply move into a 5-day sideways pattern, with the Weekly 50% levels supporting price and the Monthly 50% level resisting price.

The potential to continue upwards in April should find support around the 5-day lows and Weekly 50% level and have a higher Weekly close.

If these lesser timeframe support zones don't hold, then the Monthly 50% level continues to be a major rejection pattern to lower prices from the 2nd Quarter.

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DOW S&P Weekly 14 feb 2009

S&P Monthly

As per Previous report, expectation a bottom was in place and that a counter-trend move would occur this week.

Probable move towards the March 50% level, if it's a valid low in the first Quarter then prices should continue higher from the April 50% level towards the 3-month highs....


DOW Monthly

Even though this bottom was a high probability double bottom, which normally sends the market higher:- 3-month highs...

The April 50% level is the trend guide.

I'm still factoring in lower prices in 2009, and most likely 2nd quarter lows would provide a much more robust bear market low than the current March Monthlylow pattern.

But we will come to that at the end of this month.

DOW 5-day pattern

Ideal 5-day pattern set-up started with the breakout of the 5-day 50% level into Wednesday's highs, and then the continuation higher from Thursday's support...

and into a higher Weekly close..

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DOW S&P Weekly 7th March 2009

S&P Monthly

S&P Reached the March lows @ 699 on Friday and with late buying up from the lows.

If US markets are going to remain supported over the next few weeks, Friday's lows were the most robust support zones in the medium term.

However, it's still not the lows for 2009.

We could move into another 4 weeks for support with a rotation up from these levels next week, or continue down in another breakout pattern sometime this month.

The first stage of any reversal upwards would be price heading higher from 695 and trading above the Weekly 50% levels next week.

DOW S&P Weekly

There was an expectation of lower prices into March lows, and there was early support this week on Tuesday around the March lows.....

but the Hook patterns below the Weekly lows sent both markets down into Friday's lows.

As pointed out, we need to see US markets move above Tuesday's lows next week (March lows), and then verify any up trend by price moving and breaking the Weekly 50% level.

S&P 5-day pattern

Breakout of the Monday's lows sent the market down into Tuesday's lows.

Tuesday followed with late Buying, which aligned with the March lows, however any follow through on the UP had to be verified by the 5-day 50% level on Wednesday.

Once that failed, the markets followed with 5-day 50% rejection patterns towards the lows, as each day had a market path downward into Thursday and then Friday.

Next Week:- the first stage of any up move to continue will be the 5-day 50% level next week.

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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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