# AMT Model & Methodology



## Frank D

*AMT model*

A generic Mathematical model applied to all stocks and 
derivatives. 

*Core Theory:* the rotation of price towards central 
zones (50%) and the extension of price as Time moves forward. 
Non-linear model and theory.


This model is designed to define probable ‘market paths’ and 
Market Risk by simply using a ‘model of expectation’ that 
whilst price is above or below the 50% there is a expectant 
path that price will follow based on weekly, monthly, Quarterly
 and Yearly timeframes.

*Model of expectations:*

Support and resistance moves with each new timeframe, what exists 
in one timeframe will not exist in the next.

Support and resistance as per defined by the AMT model is 
dynamic not static.

*Short term:*

If price falls under and closes below the 3-month 50% level based 
on the lower timeframe i.e weekly the expectation is it will 
follow a 2-month wave based on the AMT model.

A 2-month wave is NOT 60 days, it’s based on the higher 
timeframe (monthly),  the current month expected price move into 
the following month based on the AMT model and market dynamics.



*Apply AMT model.

Why?  * 

I want to define most probable paths on timeframes starting from
 the Primary into the daily.

When it comes to technical analysis the first plan is to
 always determine the Primary Trend and then consider the
 multiple higher timeframes. Without an understanding of this 
most will struggle. Without the concept of ‘Direction’ and 
‘Time’ you are guaranteed to fail, because Time effectively 
defines the dynamics of the market and allows us to have a 
better understanding of where Price is likely to go. 


Next part of the plan is combining both Time and Price, because 
with all trends price has a natural flow that rotates 
between central zones and extends onward as Time moves forward. 
This relationship forms levels in the market that hinders Price
 from moving in straight lines, it moves between support 
and resistance. As Time moves forward support and resistance moves 
along with it. Knowing where support and resistance zones lie is
 a critical cog in the wheel of trading, because it’s these 
levels that become part of our trading plan. The levels
 are now ‘probability patterns’ with a realistic expectation that 
the same pattern will repeat. 

 Probability is the extent to which something is likely to 
happen, or in some cases used extensively in areas such 
as statistics and mathematics to draw conclusions about the 
likelihood of potential events occuring.

Probability theory is the mathematical study of 
phenomena characterized by randomness or uncertainty. 
More precisely, probability is used for modelling patterns under
 the same circumstances. Random variables or in this case 
‘price patterns’ then become a mathematical function that
 maps outcomes of random expectations, it does not describe 
the actual outcome of the pattern, but rather describes
 the possible, as-yet-undetermined outcomes in terms of
 real numbers.

*Apply AMT model on Weekly charts.*

Looking for Primary Dynamics based on Yearly timeframe (Yellow)
Looking for Secondary Dynamics based on Quarterly timeframe (green)

50% levels are major support zones, each new Quarter
 provides dynamic levels of probable paths that price can
 follow.






..............................................SPI Weekly chart

*Model of expectation:* whilst price is trading above the
 50% levels of both the Primary and the quarterly 50% levels 
then the expected path is for the market to move higher and 
follow the dynamic model higher.

*2nd part, apply AMT model to the weekly and Monthly timeframes.

*Same model of expectation exists in this timeframe.


AMT model: monthly dynamics (yellow)
                      Weekly dynamics  (green)                

Expectation Market is moving higher towards the Primary 
and Secondary dynamic highs in 2007

February: Trend strong until it breaks the 3-week lows  #1

Sell off occurs and sells into AMT model expected support 
for February and bounces #2 & 3

Expectation market will continue lower in the preceding month 
March (2-month wave)






March sells off hitting AMT model support once again  #4

Break of #5 and it follows the same pattern #6 #7 and #8

*As it continues with the Primary and Secondary trends much higher.*


What the AMT model has done is allowed me to have an expectation
 of where the market is moving within the Primary and 
secondary timeframes whilst defining the market using
 lower timeframes.

Just by this price action, recently the waves in Price have
 followed the AMT model precisely.  I don’t have to
 haphazardly guess the market, when it meets certain criteria I 
have an expectation that price follows market dynamics.


*SPI....*

SPI bounced off January 50% level and proceeded into a 2-month
 wave into February and we have sold off breaking the March
 50% level.

For those few days whilst price was below that 50% level then
 my expectation is to move down, however it didn’t, it bounced 
back above the 50% level became support and it has followed a 
two month wave upwards into April, which is following the 
Primary timeframe higher.







Each week (green boxes) I have probable weekly paths that is
 will follow, The resistance of this weeks highs won’t be there 
this week and can continue towards 6393 next week.

Above is the theory and a simple dynamic model based on TIME PRICE and MATH, that functions on probability not 100% guaranteed predictability.

AMT model is not about predictions; it’s about trading
 observed patterns under certain criteria.


Apply systems and I then increase my edge of knowing what to do
 on shorter timeframes, different trading strategies for 
different markets. I’m a buyer and holder of stocks, and I
 trade short-term derivatives.






Any time the market moves down based on LONG systems.  Ie 
Thursday  I know that there is a high probability that the next
 day will rally, Friday on the SPI is an example of this. If I 
take longs on close (Thursday) I’ll hedge a small parcel of Dow 
on shorts just in case the market does tank. 






*In conclusion:* I’m working with a Dynamic model using 
systems that provide expectation knowing that there is a 
probable path the market follows and trade accordingly with
 systems.


*Frank Dilernia.*

*AMT model and Methodology (c) Frank Dilernia *


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## Frank D

*ES....*







Next week i'll post something on intra-day trading.

*Frank Dilernia*


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## reece55

Frank

All I can say is a big thank you for generously sharing your methodology here.

Trading the index is something that I personally would like to start doing more of. Your posts are an insight into generating a profitable method to do so.

Cheers
Reece


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## >Apocalypto<

Cheers Frank,

You're a true selfless teacher.

Great stuff, great stuff.


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## Frank D

Everyone who has read the book knows that I focus on 3 types 
of traders, and try and make traders into those three types,
 the long term investor who continually accumulates stocks and
 never sells, the medium term stock trader who trades a minimum 
3-6 months, and the short term derivatives trader.

I pull no punches when it comes to short term trading, it’s 
the hardest and most fail, if you want to succeed in the 
markets, traders should focus medium to long.

Below is NAB showing the weekly charts and the Primary
 dynamic ranges.

Ideally for a long-term investor accumulating stocks around 
the primary 50% levels is the best strategy using the AMT model, 
or a strategy I use is buying stocks around September-October 
each year regardless of price action or the AMT model.

Over 100 years, the statistical date that the market (DOW) 
rises into years end has been October 27th.







So in the above chart we can see NAB is coming into an 
Extended price target for 2007 using the AMT model.

When we look at the same price action on the rise (chart Below)
 we can see that each rise in each quarter is following the 
price action of the AMT model extremely close.

_“rotation into 50% levels and extends as time moves forward”_

Yellow is the primary timeframe (Yearly)
Green is the  seconardy timeframe (Quarterly)






A margin trading position I use is looking for prices to test
 the secondary 50% levels and hold for approx 6 months (2 period waves) 
and repeat the process.

Even though I’m using the AMT model, I’m applying different 
trading strategies, one based on stock accumulation and the other
based on medium term timeframes.

NAB didn't meet my BUY zone in 2007, however NAB did meet my 
buying strategy on investment in 2006 (never sell), and meet 
my margin trading and exit in 2006.

In my opinion, when it comes to stock trading, the ideal trading
 strategy should be approx min 6-months using the quarterly 50% levels 
as support zones and looking for the market dynamic highs as ideal 
targets.

In my opinion, those traders who want to day trade (short term) 
should focus on derivative markets and should focus more on swing
 trading techniques. However, my testing suggests that traders 
are short changing themselves by not being able to hold at least 1 
contract overnight and exitting the next day.


*Frank Dilernia*


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## Frank D

*SPI……*

Whenever there is a break of the 3-day cycle,  there are 'two things' 
can happen, the market moves with the new trend, in this case down,
 or moves into a 2-day counter-trend move, as what has
 happened.

When I apply systems, the ‘two things’ have favoured a rotation 
upwards with higher prices on Monday based on systems expectation, 
and with the next favoured down day on Monday, as per last
 week’s analysis/systems expectation.







The direction of the day is un-known, the *length of the day *
is unknown, however between today’s close and tomorrow’s open the 
market can be anywhere, a continued down move and break of the 
3-week 50% level this week will be the 2nd sign of weakness in the
 market using the AMT model.

#1 break of the 3-day lows
#2 continuation below the 3-week 50% level.


*Tuesday: *depending on price opening and systems, I’ll 
trade regardless,  but for the market to move back into a ‘BUY’ cycle, price
 needs to break above the 3-day highs once again 6299


*Frank Dilernia*


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## Frank D

Trading....

A 1 contract trader would use the exit zone today and remain on sidelines until the next day (6202)

a multiple contract trader (2+) would use the same zone and exit, and move last with either a breakeven stop from entry or run stops above today's highs in sycom.

With the 'hope' that tomorrow opens lower.

*Frank Dilernia.*

This thread is for educational purpose, and as per Wayne L recent 
request, no more $dollars, system results, and this is not and my aim is 
not to solicit. 

I post occassionally on the AMT model and go through stages of posting 
and then I disappear for 6 months. 

Hopefully some will learn new techniques or improve an aspect of 
their trading in the future, whilst there will be others who think it's a load 
of crap.


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## tech/a

Frank.

*Others could take a leaf out of your book.
Posting of charts and clear explaination leaves the reader with far more information and explaination for practical application of your ATM model.*
If others did the same there would be less flack and more sharing of info.

Posting a heap of dates
or long winded rehetoric while of interest doesnt help the reader beyond one of curiousity.
Wether a method is worth persuing further cannot be evaluated.Its impossible to see how to apply most which is presented.

*Your an exception*

Congratulations on your time and effort and success with your method.
Youve been around a long time and have stood the test of time.

Thanks again for popping in and presenting your work.


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## >Apocalypto<

Frank D said:


> Trading....
> 
> A 1 contract trader would use the exit zone today and remain on sidelines until the next day (6202)
> 
> a multiple contract trader (2+) would use the same zone and exit, and move last with either a breakeven stop from entry or run stops above today's highs in sycom.
> 
> With the 'hope' that tomorrow opens lower.
> 
> *Frank Dilernia.*
> 
> This thread is for educational purpose, and as per Wayne L recent
> request, no more $dollars, system results, and this is not and my aim is
> not to solicit.
> 
> I post occassionally on the AMT model and go through stages of posting
> and then I disappear for 6 months.
> 
> Hopefully some will learn new techniques or improve an aspect of
> their trading in the future, whilst there will be others who think it's a load
> of crap.




Frank,

I am in awe of what I have seen in your two topics.

You're clear to the point, really enjoy your posts.

I am not commenting much due to the only action required is to read, look, absorb!

Thank you very much for the time you take to display and explain your system, it has been a real eye opener.

Cheers
Joseph


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## Frank D

_First of all always look at your weekly bar chart and work 
down, think of a weekly chart as 1 bar, there are 5 days within
 1 bar, if the market is going to reverse down its more than 
likely going to happen next week.... The only expectation in the short 
term would be a reversal back into the 3-day lows. (US markets)_


When you look at charts and you are looking for market reversals
 or short term reversals over 2-3 days the best time is always 
the start of  the next trading week, especially on markets like 
the DOW.






A 2-3 day reversal is part of the 3-day lows catching up, 
normally on the DOW you would see a double 100 point move
 towards those lows, (not 200 points), but two separate 100 
point bars.

When you closely look at weekly chart (left) you begin to see 
how there is a high probability pattern that prices moves away 
from open, this is when you begin to factor in timing your trades
 as new week's begin. 

This is ideal for short-to-medium term trades 1-3 day swing traders.

*Frank Dilernia*


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## Magdoran

Frank D said:


> *AMT model*



*Applause.*


Now that was what I was looking for.  


Thank-you, and well done.


Magdoran


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## Frank D

*DOW….*

The first two days on US markets have consolidated without 
much downside movement, and even though there is an expectation 
that US markets are heading towards the 3-Quarterly dynamic highs 
I would still like to see those 3-day lows catch up with price. 

They are still currently @12766, another days trading and those 
3-day lows will catch up with price and only then would I think 
the market was going to go higher.






When we look at each short-term reversal on the DOW for the start 
of the next week, (left Chart) there is normally a 2 bar 
100-point move that retraces back into the 3-day lows.

So at this stage, *whilst price is below 13025 and the 
100-point closing price I still favour the same expectation.*






When I look at my weekly set-ups around these highs,
I favour  rotation down or consolidation over the weekly period and into 
the new week.

So at this stage I would view the DOW based on 13025, whilst 
price is below that I would look for a minimum 2x 100 
points rotation downwards.

For me to trade longs at these levels I would prefer to trade at the 
start of the new week, which lines up with the start of the
 new month of May and new monthly dynamics.







I will get a better idea by the end of the week, because if the 
US markets consolidate further this week, next months 50% levels
 can provide the next platform for any further rises into
 the primary dynamic highs for 2007.

*However the first sign of weakness will be the break of the
 3-day lows as is happening in the SPI.*


*SPI*


SPI moved lower this week after the 2-day counter-trend 
rally starting from Friday. The first sign of weakness on the 
SPI was last Thursday and the break of the 3-day lows, however 
there was an expectation that prices would move higher into
 Monday before the next down move.

2nd sign of weakness is the break of the 3-week 50% levels.






Currently the SPI is being supported at the 3-week 50% level.
(24 hour 6175, day session 6159)

I'll be back into Longs on Thursday....

However, with my expectation of US rotating down this week,
 there are probably more chances there are going to be 
lower openings on the SPI, and the upside follow throughs that 
we have expected over the past few weeks with higher opening 
prices will probably fail to eventuate.

A weekly close below 6159 this week and things begin to look differently.

*Frank Dilernia*


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## Frank D

US markets have continued higher after the 2-3 day stall earlier
 in the week, as it makes it’s way towards the quarterly and 
primary upper levels in 2007.

I personally would have like to have seen 1 more down day on the 
DOW this week before heading higher, but once it took out 13025
 and the 100 point high on Wednesday I knew that this week 
was following another bottom-to-top trading week.

*SPI...*

The Australian market has been tight ever since it closed below 
the 3-day lows, and those follow throughs of multiple up days 
are less and less, and Friday is following the weekly down
 pattern heading towards a weekly close on it's lows.






For next week Australian traders will be looking at the MAY 
50% levels that should clearly define the Trend, and by looking
 at the close of the weekly timeframe we are below the 3-Week 
50% for next week @ 6197, using the AMT model it is now step #2 
in market weakness. 

SPI would need a major push upwards back above the 3-week 50%
 and then 3-day highs for any UP trend to continue.

Ideally I would like to see some rotation back into the May 
50% levels next month step #3. (exact level confirmed on Monday close)

Wednesday Sycom Longs now stopped after partial exit on 
Thursday highs with manual trailing stops below 6176.

*Frank Dilernia*

PS...  I won't have any short set-ups unless there are higher prices early next week.


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## >Apocalypto<

Greatly enjoying this Frank, thanks for your time and effort.


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## Frank D

Weekly close puts the weekly 50% level @ 6204, and looks like there 
should be higher prices next week.






long only 1 overnight.

*SPI.. and the bigger picture.*

Each test of the 3-month 50% level is proceeded by a 2-month 
rally into the next higher timeframe dynamic highs, as has
 happened in April 2007.

The begining of the following month there is an expectation 
that price will go and re-test those levels within the month of 
MAY 2007.

A strong market will bounce off those levels and continue
 with another 2-month wave upwards towards primary highs in
 2007.





.............................................*SPI weekly chart*



A bearish pattern will see the MAY level fail to hold, and 
whilst price is below the May 50% levels, then the expectation 
is for price to head towards the major support levels @5654.

A bearish pattern will only occur if there is weakness in US 
markets and trading below the MAY 50% levels.

*Frank Dilernia*


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## Frank D

SPI opens above weekly 50% level.

Adds longs on open, partial exit 6226, holding longs into close/ tomorrow open.






Resistance around 6230, but still holding with hope that market continues higher and break the 3-day highs.



*Frank Dilernia*


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## Frank D

DOW has followed the similar pattern at the start of the 
trading week of a 2-3 day stall or rotation back into the 3-day 
lows.

The DOW isn’t in the same stage#2 bearish pattern as the SPI, as 
it is still trading above the 3-week 50% level, whereas the 
SPI continues to follow a weaker cycle after closing below the
 3-day lows, and following the previous analysis of less upside 
follow through and more lower opens.

At this stage the expectation on the SPI is a continued 
rotation back into the May 50% levels as it's trading below the
 3-week 50% level, whilst the DOW is yet to complete stage #1.







Yesterday my last long was covered at breakeven from Fridays 
entry, but I can’t and haven’t been shorting because I don’t
 have any systems that suggest shorting atm, so I’m still trading
 on the long side atm even though the AMT model is defining 
a bearish pattern.

*Frank Dilernia*


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## Frank D

Spi was drifting lower this week but I was still trading on the
 long side, and its good to see a follow through on the SPI today.

The first confirmed break out around above 6208 and now 
continued with the break of the 3-day highs @ 6227, with my 
overall exit @ 6255. (5-day dynamic highs)






Long 6162 add 6180
Partial exit on open today 6197

Partial exit hopefully 6254 today and then hold for Thursday open.

*Frank Dilernia*

PS. Not sure what my set-ups will be for Thursday but a higher 
open could have the first ‘short’ set-up in over 2 weeks.


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## Frank D

Whenever the 3-day cycle changes (breaks) the market can do two 
things, continue to rally into the end of the week without 
another down day, or move into a 2-day stall/ rotation back down 
to the 3-day break of 6227.

Yesterdays 5-day dynamic highs of 6256 have shifted to 6286 
today  (expected resistance)







Exiting last contract on open today.

Because the range bar set-up is still LONG, I would normally 
exit the higher open and wait or not trade again today, however
 with the market opening around expected resistance this
 morning, I’m going to limit my short to 1 contract at this stage
and let the day run it’s course.

Preferably, I would like to see an 18-point rally on open and then
 a reverse, I’ve seen this happen on many occasions, and if 
it reverses down from that point I’d have a high expectation 
(not guaranteed) that the top for the day (only) has been set.

*Frank Dilernia*


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## Frank D

*ES-minis*

ES has continued to be supported at the dynamic 3-week
50% levels, with the break above 1520.50 and the April-June 
level, the next push upwards is towards the MAY 2007 highs
 @1542.







*SPI*

April-June highs still providing some form of resistance, along
 with the 3-Week 50% levels supporting the market, an extended 
push higher and target is 5468-87







*DOW…*

The DOW is now in blue-sky territory, breaking above all 
timeframe dynamic highs, if the price action continues then the 
DOW can continue to move into the 100% levels, firstly 13715, 
and then 13902.







Back  in 2006, the exact same thing occurred, the breakout of 
the MAY highs, hitting the 100% level before reversing back down,
 so around 13715 on the DOW is something I would look to see
 if there is going to be the same price action repeating
 itself, however the follow throughs on most markets will 
be confirmed with breaks of 3-week 50% levels and weekly closes
 below them.








*Frank Dilernia*


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## tech/a

> SPI
> 
> April-June highs still providing some form of resistance, along
> with the 3-Week 50% levels supporting the market, an extended
> push higher and target is 5468-87




*6468-87 Frankie!!*


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## Frank D

*25th MAY AMT report*

www.datafeeds.com.au/AMT25-1.pdf

Frank Dilernia


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## Frank D

*forex trading...*

First of all start your analysis with the AMT model so you have
 an idea about the trends and the cycles of the market. 

I’m going to use GBP as an example. Below is the recent price 
action of the GBP using the AMT model and the daily charts, and
 we can see the market being defined by the 3-day cycle, with
 the crossover of the 3-week 50% level in early MAY pushing
 the currency lower, until recently.








 A couple of things to remind yourself with, most weekly
 patterns within the trading month will rotate but with 
1-major trending week, and most trading days will rotate with 
1-major trending day within the trading week (5-days) 

 If you have an expectation that market is going down at the
 start of the trading week or as I expect at the start of 
the trading week  if price closes at the extreme of the trading 
week, a 2-day reversal back into the 3-day lows/highs then you 
would want to try and find levels in the market that will 
provide the highest probable swing point based on Primary 
ranges.

Let’s use 90 points for the GBP as its Primary Range.


When we compare the 90-point range and swing points compared to
 the daily charts in the AMT model you can see where there 
are major alignments and reversals as it moves with the 
weekly timeframe.(5-days)

Each open of the 90 point Range bar gives you a line in the
 sand that defines risk, so whilst price is moving away from 
that open you have an expectation that price has to travel 
90 points.







A Primary range can take 1 day or can take a number of days
too complete, which is normally based on volatility and the market 
you trade. Rising weekly trends have much less volatility. In 
up trending markets, you'll probably find 1 trading week 
per month with increased volatility before markets settle
down once again. You'll normally find 1 trading day per week that is 
normally double or more the ATR.

This is why 1 week in the trading month stands out and traders 
find themselves doing much better, before markets contract and traders find 
that rewards and losses increase because markets become choppier.


Now I don’t know what type of trader you are, but most forex
 traders will hold for a very limited time, and using the 
90 point range alone might take a while for each range to
 complete, however it allows you are a trader to monitor a number
 of markets and only trade or get interested in trading
 once price moves to the extreme.

For example, if you want to trade the GBP you would wait until
 the 90-point level completes before applying your short 
term trading systems or techniques. Whilst you are waiting for
 GBP to complete, EURO or JPY might come along.

Once in a trade you might not want to hold for the entire 
90 points especially if it hasn’t reached the completion in
 1-day, for example the recent 90 point high on GBP is now into 
it’s 4th day, but whilst it’s below the open, you should be 
either focusing on shorting or remaining on the sidelines.


When you introduce a secondary range of around 46 points you can
 see how there is now a movement of price based on 50-.618% of 
the primary range. The Secondary Ranges are normally found around 
.618 of the ATR. 

As a trader it makes it difficult to only trade 1 contract, 
because it doesn’t allow you to make the most of robust 
profit objectives, meaning it would be ideal to be able to exit
 1 contract at the secondary range whilst holding the 2nd for 
the completion of the primary range. 

At least with the secondary range you should be getting 
constant ranges completing within the course of the trading day,
 whilst the primary can take 1 or a number of days.






For example you are a 2 lot trader, your focus is on trading the
 46 and 90 point bars, so your initial exit will be the low of 
the 46 point bar and hold the last contract into the low of the 
90 point bar using the current price action.

Price action is random and has a random outcome, because if 
your trading rules using Max range return using both these 
ranges will be 136 points. (46+90)  However the current price 
action in the market has allowed you to re-enter the 2nd 
contract once again at the top of the 46-point bar, so your 
return so far is 46+46+46+ then maybe 90 points. This is why I 
like consolidating markets after any trending day.

That is using an example of Max return, but in real return you 
will need a filter, so if you are using 22 point reversals, 
then your max return will be 24+68 points.

You might then find that you’ll only get 1 or maybe 2 ideal 
trades per week on each market, focusing on trading the extreme
 of the 90 bar range.

As an individual you would want to be developing or have 
some trading rules based on entry, exit, stoploss and so on, 
and that might not necessarily be based on ranges bars, you 
could have a simple system using shorter timeframes, but I bet 
the best trades will occur around the extreme of the range,
 whereas the choppy markets and greater losses will occur around 
the middle of the same ranges.


Then it's a matter on monitoring a number of Forex markets and be patient.


*Frank Dilernia*

*(c) AMT model*


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## >Apocalypto<

Frank,

I am glad you raised FX in a AMT model as I was curious about seeing it done.

Thanks for consistently updating this thread I am reading all your posts, again i say thank you for your time and effort in explaining your methodology. 

Really great stuff. 

Cheers


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## Frank D

*SPI Trading….*

This is a perfect example of AMT model and Primary Range 
Trading on the SPI….

Using the AMT model price looks weak, it’s trading below the 
3-week 50% level, yesterday stalling at the 50% level and 
heading back down to the recent lows.


Using the Primary Range bar, the expectation still exists that 
price needs to complete the upside move to 6319.








On Friday, traders had long positions at the lows @ 6251, trading
 2 contracts, the first exit was the R44 high @ 6276 (+25), 
with still 1 contract held and next exit the R87 high 
@ 6319.

However the AMT model stopped price reached that zone and there 
was another push lower into another R44 entry @ 6265 on Monday.

Even though the AMT model is showing signs of weakness, 
traders still want to be trading with the expectation that price
 is moving towards 6319.

Now that up move might happen today, or it might take 4 days 
to complete, but each time is moves down it is giving traders
 an opportunity or the potential to make more money than just a 
R44 and R87 completion. This time is give traders and opportunity 
to Make R44+R44+87 based on 1 primary range.







Of course the returns won’t be 44 points because it never
 always turns on an exact point, but it gives you an idea about
 the movement of price over a number of days.

2nd trade exit R44 high @ 6290

R44 is your secondary Range based on .618 of the ATR over 90 days. 
A range bar of 44-49 points is ideal, the larger the more rewards if you choose 49 points.

At this stage, with the 3-day cycles and 3-week 50% levels forming
 a major resistance zone using the AMT model, the R87 high might take 
much longer to reach or it might not at all, but it gives traders an idea
 that sometimes the best trades might only happen once or twice
 a week.

*Note:* the R44 entry (6313) around the lows of the R87
 on Thursday would have gotten you out in Sycom at the R44 highs 
@ 6333 before being stopped out in sycom on 2nd contract. And 
then re-entering longs on open on Friday around the R44/R87 lows.

this is a simple technique of using Ranges within markets, whether it's 
the DOW, ES, or Forex, and allows trader's the ability to read and 
analyse price action better within the weekly timeframes.

*Frank Dilernia

(c) AMT model*


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## Edwood

good shout Frank - you got your 319


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## Frank D

*SPI Trading prt2*

 The swing completed the move upside using the Primary range 
@ 6319, trader’s using the R44 and R87 ranges if only trading 
2 contracts should now be on the sidelines.

 The push upwards today can continue much higher if the US 
markets continue higher also, however the R95 on the DOW in
 early trading should give traders an idea about the direction
 for US markets, becasue any push higher and the swing is towards the 
3-day cycles or another random 87 point upswing on the SPI can occur
this week.






R44 is the lower end of the secondary range; these ranges 
swing between 44 and 49 points. When I test the ranges
 I find R44 a more robust range because it will trigger
 more often compared to the R49 range, but traders might want
 to look at the R49 and decide that it is better to trade using a slightly 
larger range.

 For some traders who are only trading 1-2 contracts, R49 might
 help in maximising some profits, espesically when prices are moving away
 from the Primary range extreme.








For example price is coming in an R44 low, however it needs to travel 
another 5 points before the R49 range is complete, and the same applies
 to the upside and exit, there will be a difference of 5 points on the 
upside. So on 1 trade, there is a 10-point difference between entry and
 exits.






*49 point ranges*


Let’s look at Fridays trading using the R44 entry @ 6251 entry 
and first exit at 6276 (+25)

Using an R49 range Entry is the same @6251 but exit is 6281 (+31)


Monday’s entry on R44 @ 6265, on R49 it’s 6260 (+5) and exit is
 also (+5). 

*Those two trades using a slight difference in Range has returned 
an extra 15 points (+375) 1 contract* 

What is ideal about trading the .618 of the ATR and using Range of Price
 is that you have an understanding that price travels a certain 
distance within the day and it gives traders a clear exit strategy
 without fearing the market or getting out too soon, even if you are just
 a day trader using different trading trading techniques.

*Frank Dilernia* 


AMT Market Dynamic Model  © Frank Dilernia


----------



## Frank D

*DOW...*

Tuesday’s trading was critical if there was going to be any 
further weakness in US markets price had to continue down from 
the R95 high and just continue lower for the rest of the day, but 
this price action has been happening for months now, that the
 start of the trading week will see a 95 point down move before
 support come in pushing the market upwards, last week it took 
until Thursday, this week it occurred on the first day. 

This price action suggests that US markets will probably be
 well supported coming into contract expiry, extremely rare to 
see any major weakness prior to expiry.






*ES-minis*

3-week 50% level continues to support the market. This dynamic 
50% level obviously moves with time and plays a valuable roll 
in giving traders an idea where the support exists in each 
weekly timeframe.







*GBP...*

The GBP on the daily chart had taken until the 6th day to
 complete the .90 point bar on the downside, but all of a sudden
 the move down is now looking for more bearish due to the break 
of the 3-day lows along with the 3-week 50% level.

At this stage the preference is to remain on the sidelines and let
 the trading week complete before trading again, and then look
 for the next primary range extreme in the new week.






*Frank Dilernia*


----------



## Frank D

Spi is currently trading between the 3-day highs and the
 3-week 50% level.

With the R87 high @ 6319, traders should have an expectation 
that price is moving lower over another R87 range. Once again this 
can take 1 day or a number of days. Most likely any upside move
 will occur if US markets move higher tonight







Yesterday’s rally and around the highs triggered shorts on the 
r44-49 bars, but what traders needed to confirm was matching 
R23 shorts in today’s trading. @ 6323

This occurred in the R23 upswing, and the R23 will remain short
 for the rest of today.

Normal system results will mean that traders should exit 
both contracts at the R44 or R49 lows today  6291-6286, but
 trader’s shouldn’t be going long on the r44 lows because the
 R23 remains short. 

 Traders trading 3 contracts hold until the R87 completes
 with trailing stops around today's entry.






*Frank Dilernia*


----------



## Frank D

*SPI trading....*

This is a bearish pattern on the SPI, a failure at the 3-day 
highs pushing lower and completing the Primary range in 1 day
 @ 6248.

Trend is down, the new month begins on Friday, and the
 expectation is that price is heading towards the June 50% 
levels.

There are no longs at the R87 lows today, it’s either exit @6248 
or hold into close.






*Frank Dilernia*


----------



## Frank D

*SPI Trading…*


US markets rallied off the 3-week 50% levels sending the SPI
 higher overnight.

On open today all SPI systems will go long on a higher open, so
 the swing target is based on the R87-92 upswing @ 6321-26.







On open the R23 will go long whilst the R44-49 will be 
offloading contracts, that means any trade on open will be 
limited to 1 contract (unless trading the daily system 3 contracts)

Normally a higher open can fade the open 23 points, but to 
be trading 2-3 contracts or more it will need to move back down 
from open 44-49 points before going long, or it’s 1 contract on open 


But the expectation is that price is moving towards 6321-26 today in 
morning trading, a break above the 3-day highs expectation that market is moving another 87 point upswing







*DOW…..*

 DOW expectation is still to move towards the 100% of the break 
at 13710, which aligns with the 3-week top after bouncing off the
 3-week 50% level.

This upper level is very critical, but the week needs to complete
 to get a better idea whether this is going to be a top on the
 DOW if it repeats the same price action as in 2006.







*Frank Dilernia*


----------



## Frank D

Exit is the R44 high @ 6352, but can't go short because 
shorter system will remain long all day.






The market can continue higher for the rest of the day or overnight, the 
next swing point will be based on an R87-92 high around  6406-6411.

But the next entry on longs can only occur if there is a down move of 
44-49 points, or ideally around R87-92 lows in the new week.

*Frank Dilernia*


----------



## Edwood

interesting levels Frank - fwiw I have 6,353 as a 4.236 extension of 1 / A of the move out of this low

I reckon its all controlled by some greater force! 

ignore the count, work in progress


----------



## Frank D

Edwood,

I’m just working with the .618 of the ATR, I know on most days the 
market will move 44-49 points, with the rest of the time Sycom pushes 
the market further, and occasionally there are days like yesterday that 
the primary range will complete in 1 day.

There are going to be days when nothing aligns because of lack of
 volatility, and there will be days when everything turns on a dime. There 
will be crappy weeks, but on most occasions there will be one 
outstanding week within the month that pushes up my own profits.

This is just an educational post on trading the SPI by simply using
 2 contracts and using ranges bars. The below results are just 1-2 contract/s 
using the R44 as an exit, when there is certain alignment, 
as shown in this thread.

Strategy is always finding a point in the market and take out profit
 whilst letting any other contract/s  run, and imo working with .618 of 
the ATR is ideal for the first exit or entry points in the market.

When I first wrote my book, that ATR was 27 points, now it’s 
44 points because of the increase in size, so the ability to make more 
money increases because the ATR of markets have increased, not 
because my method or system is better than anyone else’s.







Even trading just 2 contracts can make traders good money, more money 
by increasing position size. And by working with a number of range bars
 it decreases the noise of using smaller price based indicators, but you 
need to be working with much wider stops.


The rewards are always random because price action is random, for 
example the long on open and target of 44 points, which was basically 
1-bar straight up 44 points. Fantastic. However what happened if the 
Bar moved down 23 points before reversing upwards, as happens on 
many occasions, that Long potential is only 21 points until the R44 is 
reached

I never know what the market is going to do, other than get in on 
triggers and get out @ pre-determined zones based on Range 
completion. 


*This is my philosophy on Ranges bars….*


When we analyse markets we try and define three different cycles 
or trends that are based on Primary, Secondary, and
Intermediate structures. In this case, the Yearly timeframe 
followed by the Quarterly timeframe followed the monthly 
timeframe. Then you move into lesser timeframes, Weekly and 
Daily.

Range bars or movement of price follow a very similar pattern
based on those three components, Primary, Secondary
and Intermediate, with lesser range bars. All play their 
part, whilst our part is finding a certain range that fits our
own individual style.

For example, most index markets have a primary range around
87-95 points, regardless of which market it is. It has only
been recently with the increase of the Australian market that 
this larger primary range has become more robust and occurs
more often. So if you are a trader or a swing trader you want to
be starting with the Primary Range.

The Secondary levels are normally found around .618 of the ATR. 

This is why I use a number of range bar to filter the best possible trades; 
the primary (R87-92) the secondary R44-49, and Intermediate R23, and 
then use these ranges based on 5-day patterns. 

Trade Long from 5-day lows; trade shorts from 5-day highs when there
 is alignment, or stay out and be patient.

 Because I still believe that there is only 1 or 2 good trades per week 
based on swing patterns for future markets, whereas stocks should focus
 on trends and longer term.


*Frank Dilernia*

PS. I'm going away on holidays so this will be my last post for a while.


----------



## Edwood

Hi Frank - thanks very much for taking the time to post in such detail  and for giving me a closer look under the bonnet.

Have a good break away, hope you get some good R&R - let me know when you return

Ed


----------



## Slick Rick

Would someone mind expanding on the specifics of the '50% level'?

Apologies if I missed it.


----------



## Slick Rick

Not after anything detailed, just some clarification.

Cheers.


----------



## Frank D

*2nd June AMT report*

DOW,GBP,ES, Er2, SPI

www.datafeeds.com.au/AMT2-6june.pdf


*Frank Dilernia*

_____________________________________________________________

----- Original Message ----- 
From: frankd@fdtradeco 
To: Undisclosed-Recipient:; 
Sent: Wednesday, June 06, 2007 11:35 AM
Subject: AMT report

*AMT Report…           6th June 2007….
* 

This week we were looking for US markets to reverse back down 
from their Primary range extremes and back into their 3-day 
lows. This was part of any expectation that occurs when 
markets close on their Friday highs, and aligning with Primary 
range extremes.

* DOW….*

 The DOW sold off into the 3-week 50% level, finding support
 but trading below the 3-day lows. The 3-day cycle is bearish,
 but unless the market continues lower on Wednesday breaking the 
3-week 50% level then I will continue to think the market
 is supported.

 The easiest way to define the support from Wednesday is use the
 OTD level @ 13592.






These tops on US markets were the exact same dynamic tops in 2006, and
 further weakness needs to continue lower otherwise trade with support.

*ES-minis…*

All US markets have followed the same pattern on reversals from 
the top and back into the 3-week 50% levels before the market
 is supported once again.

 Unless Wednesday continues lower there is a good chance the 
markets will continue to be supported into contract expiry.








*SPI...*

The SPI is following the same pattern , stalling and rotating 
down after the completion of the Primary ranges on Monday’s 
Spike.

 The probable path on any swing down is once again 87-92 
points, with any extended move into Sycom. This put's the SPI 
around 6325 for the best possible swing upwards, this will line 
up with approximately the 3-week 50% level.

 These past 3 days is an example of things moving extremely 
slowly, as 1 priamry range bar can take 1-5 days to complete.







----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Wednesday, June 06, 2007 1:20 PM
Subject: AMT report


*SPI.......*

 The Downside move on the SPI completed to an exact low 
@ 6325 and now supported at the 3-week 50% level. If this market 
is going to move higher then this is the most logical place 
any upswing is going to happen  from

Normally when there is an R23 upmove in early trading and a 
perfect top before the lows are taken out the market is 
normally depressed for the rest of the trading day. I don't
 expect too much up move in the day session, if it's going to 
swing higher it will normally happen in Sycom.

 The R87 down move completed @ 6341, there is probably a 
resistance level forming there for Wednesday.

First exit  R44 upside in sycom.






*Frank Dilernia*


----------



## Frank D

*DOW....*

 The Same price action is repeating on the DOW in 2007 once 
it reached the same dynamic zone as in 2006.

 This break of the 3-week 50% level is the first time in 
3-months, the expectation is a rotation back into the 3-month 
50% levels, a bearish pattern will see that 50% level fail to 
hold in June.

Short term, treat this weekly timeframe as 1 bar, with any 
upswing in the short-term use the 50% level next week as in 
ideal resistance level, as occurred in 2006.

The 3-day highs should give traders an idea about swing patterns
 and any strength in the market next week.







*SPI……*

 SPI in sycom is going to be dictated by what occurs in US
 markets, if US markets continue further weakness next week 
the probable market path is the June 50% levels.

 Failure to hold is bearish pattern below that level, with 
the expectation markets are moving into July lows.

 Short-term, around the same zone as 2-weeks  ago using the 
3-week dynamic lows could provide support for any short term 
counter-trend move, but keep in mind that this is a weekly 
timeframe and the 1 bar timeframe can continue lower into the
 close of the trading week.







*Frank Dilernia 


AMT Market Dynamic Model  © Frank Dilernia*


----------



## Frank D

*DOW & ES* 

DOW and ES along with most markets are moving in a weekly 
timeframe (1 bar) straight back into the June 50% levels.  

 Once 3-week 50% support levels cracked on Wednesday the 
same pattern is occurring in 2007 as in 2006 after reaching the 
same dynamic highs. 

 The expectation of a short-term upswing on Thursday failed once
 the 3-week dynamic lows support zones failed and we move into 
a weekly trending Bar; down.

 As I mentioned previously, there is normally a market path 
for Price to follow based on dynamic timeframes, as long as
 traders understand support and resistance.

 Rotation patterns are back towards the June 50% levels, 
these levels can be major support zones, and can provide a 
swing back up, if we work with a weekly timeframes then next week
 is an ideal time, but that will be confirmed on this weekly close.

 Because a weekly close below these levels and the expectation 
is that Market can move into a 2-month bearish pattern back 
into July low levels, as previoisly mentioned.







*SPI….*


The SPI has certain points in the market that on many
 occasions become support and resistance, however overnight it
 is going to be dictated by what occurs in US markets.

Yesterday provided the ideal swing point low again using the R87 
lows, with good buying support, but today the market will gap
 lower once again, and there is still 100 points to go before 
the rotation down is complete.

Because the lower open is occurring below the low R87 @ 6240
 then upside can be limited in Friday’s trading.






*Frank Dilernia

AMT model (c)*


----------



## Frank D

Not expecting much upside in today's trading, each lower swing
 point for Wednesday and Thursday provided Longs, Today on
 Friday isn't the case, my exepctation for today's trading is 
to remain flat or further downside. 

Not trading longs on open today, let the week trade out. 








*Frank Dilernia*


----------



## Frank D

US markets completed down moves this week into major support zones, 
and with SPOT contracts expiring this week along with September 
futures running at a premium of 100 points this normally will support the market and push cash market higher.

*Full report....*

9th June 2007

www.datafeeds.com.au/AMT9june.pdf

*Frank Dilernia*


----------



## Frank D

Push up early on Monday for US markets before being capped at 
their 3-week 50% levels on Tuesday and then being pushed down
 once again. The DOW from its R95 highs on both Monday and Tuesday.

 This is the same price action as in 2006 and if it continues 
prices should go lower than last weeks lows. All global markets 
are following the same price action with September futures now 
under those levels. A weekly close below the monthly 50% level
 and the expectation is a continuation lower into July.

*DOW…. * Simply use the 50% level as the overall ‘trend’ guide for markets







*SPI….*

First day back for the trading week we were looking for the 
upside completion @6285, with the market opening @ 6247 this 
allowed traders to pick up more points in early trading, however 
once it moved back below 6285 it has followed the same weaker
 price patterns as most other markets.






Any upside today and the resistance level is 6220 for day 
traders.

Price patterns often repeat in global markets and this is the 
exact same price pattern as the 2006 sell-off confirmed with this
 push down from the weekly 50% levels this week. 

My expectation is for continued weakness in the weekly 
timeframes with short-term counter-trend moves in the 
daily timeframes into July's Dynamic lows that align with the
Quarterly 50% levels. (major secondary support)

*Frank Dilernia*


----------



## Frank D

June contracts will end today on US markets, and with 
September running at a premium into expiry this help drag the
 cash market upwards into Thursday's expiry.

*DOW…*


Price has stalled at the 3-day highs, however with US markets 
now trading above the weekly and monthly 50% levels and also
 trading above the Quarterly highs, traders should get a better
 idea on how well the market is supported at the close of 
this trading week and the start of next week.






*ES-minis.*

Gives traders a clearer picture with the completion down into the 
3-month 50% levels last week and now trading back above 
the intermediate timeframe 50% levels.

As previously mentioned simply use the weekly 50% level as
 your guide and the same applies next week.







*SPI…..*

Followed the US markets higher overnight in sycom, and today’s
 open will complete the R87 @ 6260, not giving much chance to 
‘day-traders’ to capture an up move like Monday unless they open
it lower again.

 Daily system is adding more longs on higher open 
(normally offloading) so an extended push higher today back
 towards the 3-day highs is an expectation.







*Frank Dilernia*

PS. These Daily reports will now be emailed to subscribers before
market open. cheers


----------



## Frank D

*ES….*

Primary timeframe dynamic high (yearly) reached, and a perfect
 top with major resistance forming. Bearish divergence in 
the preceding month of July with lower top.

All global markets have the same bearish divergence for 
July.






*SPI….*

Secondary timeframe dynamic high (quarterly) has capped the SPI 
for a number of months now, providing ideal swing trading.

There is a major shift in timeframe support and resistance at
 the end of the next week. All global markets have been 
supported above the previous 3 months highs, this support 
will disappear and shift forward, at the same time resistance 
will disappear.

Bearish Divergence in July…






Same divergence occuring in the preceeding month when markets dropped two days before the end of February this year.


*Frank Dilernia*

*(c) AMT Dynamic trading model*


----------



## Frank D

*US markets*

Highest probability of a 2-day directional move on US markets
on Tuesday. (2-day trending period)

Direction unknown, but trade on the side of Midnight close 
on US markets as a Risk level. If markets are going to follow 
the divergence of July then Tuesday has the highest probability 
of heading lower.

Early US price action in the day sessions should set up the next 
2 days, whether it rallies or sells off, simply use 13483 as 
your risk level 

*SPI…..*

Has followed a weaker pattern into the close as per this 
morning report waiting on direction of US markets….


www.datafeeds.com.au/AMTDaily26-5.pdf

*Frank Dilernia

(c) AMT Trading Model:*

*This is not trading advice*


----------



## Frank D

*ES-minis….*

 So far so good on the down move, price is heading down from 
the 3 week 3 50% levels 1518.50

A bearish weekly pattern should  ‘hopefully’ trend down for
 the entire day….






*DOW...*

 Upswing in early trading and heading down from range high, 
same expectation head down from the 3-week 50% 13508






The market can do anything, but I'd be surprised to see the 
market head higher today when they push it down from the 
3-week 50% levels coming in a monthly divergence for July.

*Frank Dilernia*

Going to bed now hopefully I'll be smiling when I get up and not see 
US markets trading above those 50% levels.


----------



## Frank D

----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Wednesday, June 27, 2007 7:02 AM
Subject: AMT daily report

AMT Daily report   27th June….


*DOW*

The same pattern occurred last week; a doublebar up move 
followed by a double bar down move, if this is going to be the 
same then the DOW should hit 13359 before any buying support
 comes in.

2 contract traders on the DOW should hopefully be exiting 
1-contract around R50-55 points as it moves away from OTD 
and letting the last contract run into Primary range completion,
 or hopefully today into the close of the day.







----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Thursday, June 28, 2007 8:30 AM
Subject: AMT Daily report 

AMT daily Report 28th June 2007

*DOW….*


The support zone on the DOW @13559 provided the platform for 
a counter-trend move upside, but it travelled much further than 
I expected in US markets, so those who held into end of day
 would have been chuffed. 

A weaker pattern would have stalled around the first bar 
primary highs and consolidated for the day with the next drive 
down on Thursday.

The expectation is for a trending weekly pattern on the downside, 
so a drive back down can still eventuate but most of the best 
sell zones occur around the primary highs, that means a further 
push upwards into 13571.

 if  the market is going to come down then price shouldn’t spend too
 much time above that level, and I’d be weary on trading 
shorts above that level.









*ES….*

 Weekly resistance level @ 1518.50, if the market is going to 
come back down then it should head back down from this level 
on Thursday. The AMT levels normally provide robust resistance
 and support levels.






The risk level on ES is 1518.50, with any push down price would
 need to head back down into 1511 and continue lower, the only 
thing that favours a push higher is another Primary range on 
ES should push the market towards 1524.25, US traders should
 know which direction the markets is heading by the time the 
market opens on Thursday.






*Frank Dilernia*


----------



## Edwood

great calls the last couple of days Frank - one day early on the call for the trending day but excellent stuff all the same   gotta be happy with that


----------



## Frank D

Edwood,

In the reports I try and show levels in the market that have 
the highest probability of reversals based on the ‘daily 
timeframes’ so traders have an idea that there is an 
expectation that support and resistance has a follow through. 

Depending on how many contracts you trade there are mini point 
moves based on 55 points, so if you are trading 2 contracts
 you focus on a first exit 55 point then into larger ranges.
 If there is a major pattern based on alignment 
(AMT model expectation) then hold into the end of the day. 
Once you get your initial exit out, then let the day takes 
it's course as long as you are trading in the direction of 
the Primary Range bar.

But for the 2-lot trader its always-based on first and 2nd 
exits, anything other doesn’t matter. If you are a 3-lot trader 
then it makes it easier to hold into end of the day. I always
 talk in minimum contracts of 2 lots.


Looking at both charts for Thursday I don’t have any shorts at 
this stage of the day unless it moves higher, or even if it does 
come down on Thursday, a high probability pattern 'short' might 
not appear until Friday or next week.







The ES chart is exactly the same, the BUY up from lows, but 
traders would have exited on the first 13 point rally , after
 that there was no alignment for the rest of the day, and there 
are no shorts in the market at this stage.

Regardless of any ‘forecasting’ I do, there are always levels in 
the markets that provided the best possible zones to trade 
from. It's not about 'prediction', it's about trends and 
support-resistance,

If I’m a day late or a day early when I you do the reports 
that are 12 hours or a couple of days in advance for US 
markets those levels still exist, it's just when and how fast 
they get there that matters.

But you’d be surprised how Aussie traders in our day session 
or early evening can get set before the US opens. 

*Regards,
Frank Dilernia*


----------



## >Apocalypto<

Frank,

thanks for all the time you spend in this forum sharing your methodology with us. I greatly enjoy your approach and reading your posts.

It's a great thing that traders like your self do this as it adds the depth in the forums.

Cheers
Joseph


----------



## Frank D

*DOW...*

Yesterday the sell zone was 13572, (R55 high was 13580). The
 trader looking to short this point would have exited on 
55-points down and remain shorted. From this point the trader 
has banked his first exit profit and can go to bed running
 stops above the days highs.

A trader who monitors the market all day can use the next 
upper level @ 13614 as the next sell zone, but this time it’s 
more risky because it’s breaking the 3-day highs, the trader
 might want to sit out the next trade or trade less contracts.






Looking at the overall picture on US markets, I would have liked 
to have seen a bit more weakness in today’s trading or coming 
into the close of the day, there’s 1 more day and then a major 
shift in monthly and quarterly giving new levels based on a shift 
in time.

*Frank Dilernia*


----------



## Frank D

*ES… * 

US markets have stalled at their 3-day highs and with drive down 
on ES into 1515 will put it back under the 3-week 50% levels. 

A failure of the 3-day highs and move back under the 3-week 
50% levels isn’t a good sign for the market.






I have no idea what they will do on Friday to close out the 
Quarter; normally I wouldn’t expect another drive down in the
 same trading week.  There is normally only 1 larger trending
 day within the weekly time, with next week providing the next
 major trending day, but the expectation is a pullback  into 
the next 3-month 50% level currently 1499.

 These 50% levels are major support zones, a break  of those 
50% levels and I’d expect more weakness.

There are no high probability trades for Friday on US markets

*Frank Dilernia*


----------



## Frank D

Wild night on US markets.

*DOW*

#1 Thursday Expectation that prices had to complete the 
downside. 2 lot trader holding from Thursday would have exitted at lows.

#2 once Thursday completed around the lows, Friday found support
 as buyers came rushing in driving the prices back up. (OTD is open trading dynamics or support/resistance)

#3 back into Primary Highs, hitting upper sell zone of 13614 
and down she goes into another double range low.







Overall picture on US markets, whilst trend is above secondary 
50% levels (monthly; Quarterly), trend remains strong. The
 only weakness is that price remains or is consolidating around
 the intermediated timeframe 50% levels (weekly) , which can last for 
a number of weeks.  

And if this volatility continues then precise swings in the 
market should hopefully give traders nice support and 
resistance levels to trade from. This trading will suit 
swing traders much more than momentum traders for the time
 being using OTD levels.

With the Major divergance for this month; I would have thought that
 more weakness would be in the markets especially this week. I've have 
seen in the past that this price action can remain choppy for a number 
of trading weeks before any further up move, whilst price remains above the
monthly 50% levels.

It would suit me fine because that's my trading style; * UP trending 
weekly patterns* are hard to get back into the trend after you
 have exitted, with the next best trade coming in the following week.

Index Markets normally have an UP bias, so it's easier to get into 
down trending/consolidating markets because markets will rebound
 more often. UP trending markets once you get out of the trend the next 
best entry will normally occuring the the follwing week after a 2-day 
pullback into the 3-day lows.

*Frank Dilernia*


----------



## Frank D

A Rising weekly trend and volatility drops considerably, not 
ideal for Day traders.

If the expectation is that the weekly timeframe continues 
higher into Friday then unless it pulls back traders will find 
it hard to get back into the trend. (swing traders)

Ideally in a rising weekly trend we would like to see a 
2-day pullback before the trend continues.

*DOW….*






Using statistical ranges of the DOW the most logical zone for
 the pullback to begin is from 13682, today’s high (don’t
 trade shorts above this level) 

Ideally the best zone would rise from (support) 13568 
normally starting from the following day. Pullback aligns 
with timeframe 50% levels. 

‘If’ the market follows this pattern, then 13568 would need to
 hold and then for the next up move to begin starting from the
 next days trading.

*Frank Dilernia*


----------



## Frank D

*ES…*

If traders are looking for a level for the start of any
 2-day stall/rotation back down before the weekly trend
 continues then 1539.50 is a satistical probability level for this 
to happen.

Trading shorts above this level for the remainder of the 
week has 'greater' RISK.






Ideally a 2-day stall rotation allows swing traders to get back 
into weekly trends

*Frank Dilernia*


----------



## Frank D

*ES….*

ES coming into the open of the trading day, expected
 resistance zone is 1539.50

There has been a slight push upwards into  @ 1540.75, with 
a matching lesser range confirming probability 'sell' zone.   

parital exit @ 1536.50  then move 2nd lot to stops above highs. 







*DOW…*

 Has pushed upwards and trading just above 13682, I would
 have preferred to see the DOW below this level with the 
expectation that there is going to be a 55 point down move before
 US markets actually opened.

Partial exit 55 points down with stops moved above highs.

Hopefully ES will drag it down.

*Frank Diernia*

This is not trading advice.

As pointed out in another thread, because my posts seem like to be giving 
advice this will be my last post on trading set-ups

cheers
Frank


----------



## Frank D

That was a short-term pullback into the 3-day highs within
the weekly timeframe.

Friday can close where it wants to now, ideally 1 more 'stalling'
day would be ideal before the next week begins.






*Frank Dilernia*


----------



## Frank D

US markets moving in a 2-day stall within the weekly timeframe.

Strong trending weekly trends would normally see Buying support
around 13667 and then a continuation of prices on Wednesday into the
 close of the trading week. 

The only thing that is a concern is the lower 50% level for next
 week, normally that is a forewarning of a weaker days into the end of the 
weak, or more a choppy trading week than a trending week.







*Frank Dilernia*


----------



## Frank D

*DOW*

   Upper reversal level from 13760, start of the rotation within 
the weekly timeframe. 

First support level 13667 provided a 55 point up swing 
before continuing down into the next @ 13616 (AMT risk 
level for Wednesday) and rotation back into the 3-day 
lows.

Alignment with weekly 50% level  and still in a 3-day BUY 
cycle.

*Only thing that is concerning is the diverging 50% level for 
next week which isn’t a bullish sign for the current trading
 week. * 






*Frank Dilernia*


----------



## Frank D

*DOW*

On Tuesday the expectation was a rotation back into the 3-day 
low, however Tuesday  has ended up being a down trending day
 with support failing, this weakness was probably due to the 
fact that the proceeding weekly 50% level is diverging 
downwards, which isn’t a good sign for the current trading week.


AMT Risk level for Wednesday trading below 13616

There was some Buying support around 13616, failing to rise 
55 points and taking out the lows pushing price down into close.








No idea how the trading week will pan out, a consolidating 
choppy trading week will see slightly lower prices on 
Wednesday before moving in a 2-day counter-trend into Friday (support 13511) 

A down trending week will see July lows break (13511) and head down 
into Friday.

The diverging 50% level and now trading below the current weekly 
50% level and the 3-day lows we don’t need to be Einstein to 
work out that the short-term trend and cycles are weak, the 
only thing traders can expect whilst price is still trading 
above the monthly 50% level is a 2-day up move into the end of the 
week.


*Frank Dilernia*


----------



## Frank D

*AMT report 14th July*


www.datafeeds.com.au/AMT7thJuly.pdf

www.datafeeds.com.au/AMT14thJuly.pdf


Educational articles not trading advice, just my view on current markets
 from next week onwards.

*Regards,
Frank Dilernia*


----------



## >Apocalypto<

Cheers for your input Frank, great stuff.


----------



## Frank D

*DOW….*


Looking for a rotation down into support this week on the DOW
 before the next move higher, this completed on Wednesday, now
 it depends on what happens on Friday to see if there is a 
confirmed close above 14118, for another move higher.








However the market didn’t reverse down until higher prices 
on Tuesday,  

Friday OTD 14402 down move 55 points
Monday OTD 14444 down move 55 points
Tuesday OTD 14496  down move, but this time is continued down 
95 points.






The down move and OTD levels did exactly the same, provided 
55 point up swings with the last one @ 13900, providing the up 
swing and continuation higher. This lined up with the weekend
 report.

This is why it’s important to have first lot exit strategies 
when trading, because on occasions there are players that come 
into the markets around those levels pushing the market 55
 points before it continues with the short term 3 day trends.


*SPI….*


Looking for a rotation down into 6365-6351 for the next up move
 to occur, using the daily set-ups the best day for this to 
happen was today when the daily system aligned with today’s open
 @ 6350, hopefully there is a continuation into a minimum move 
of 6402.






The partial exit on the SPI was 23 points up @ 6371 from open 
and now *2nd lots can be run with breakeven tops from entry * and 
hold into 6402 (87 points up from yesterdays swing lows, with 
3rd lots into higher prices tomorrow.


*Frank Dilernia*


----------



## Frank D

_The *AMT model (Dilernia Model)* gives traders an idea 
about market dynamics and probable market paths into the 
future, it’s about looking into the future to provide and idea 
about the present._

Below is a chart of the Australian stock market in 2006 and 
now 2007, we can see 15 weeks of sideways trading in 2006 after
 it had reached the Primary range highs before the next up move,
 and we can see another major consolidation period once again 
around the same time after it has reached the primary range highs 
in 2007

The 2006 breakout was confirmed with a few weeks of 
consolidation above the primary highs, so if this market is going 
to kick up into 2008, we need to see higher prices and 6376 
becomes a support zone with a confirming break above the 
3-month highs. 

At this stage the view is more consolidation.







With reporting season just about to kick into gear the 
expectation is the market is going to move higher towards the 
July-September highs, however when we look at the forward 
Quarter from September-December there is a lower top. 

I’ve called 
it *‘Dilernia-Drops’*, because it is forewarning that
 there could be a drop just around the corner into the end of 
this Quarter. It doesn’t favour higher moves. * We use 
the Dilernia Model of looking into the future that might give
 a forewarning of the Present.*

*A ‘Dilernia-Drop’ * is for the current Quarter and into
 the end of the timeframe, we have seen these ‘drops’ 
forewarning reversals in the markets in forward monthly
 timeframes,with *two monthly Dilernia-Drops this year providing
 the timing for the two biggest drops this year*, and just this 
week in US markets on the weekly timeframe.






It doesn’t mean there is going to be a massive drop, it just
 means that the bias is to move lower or sideways into the end 
of the quarter before any higher move, but that down move can 
happen anytime in this quarter.

How far it moves on the downside or closes in this quarter 
should give traders an idea about the strength and market path
 of the last 3 months into 2008 and beyond.



*DOW….*


There is nothing to suggest that there is going to be any
 weakness in US markets other than resistance around these 
July highs before the extension upwards into August. 







*ES….*

The only drop in US markets was for the current trading week, with
 a Dilernia Drop on the weekly timeframe providing the move
 back into the 3-week 50% level (weekly support).






If that is the case then the 3-week 50% level should provide 
the support levels back towards the highs next week or 
a consolidation at least into the end of of July into 
August.


At this stage with July highs providing resistance, US markets 
look to be in sideways pattern until August, whilst here 
in Australia I’d be weary investing around these highs 
after reporting season is over and consider it once again at 
the start of the next quarter.

*Frank Dilernia.*


----------



## Frank D

*Dilernia Report*


www.datafeeds.com.au/DilerniaReport25thJuly.pdf


Technical view of US and Australian Markets

*Frank Dilernia*


----------



## Frank D

*Dilernia Report*


www.datafeeds.com.au/DilerniaReport26thJuly.pdf

*Frank Dilernia*


----------



## Frank D

Intermediate timeframe support 6218  (monthly 50% level for July)

Trading below August 50% level

Secondary Timeframe support 5949 (quarterly 50% level)

Most rallies began from timeframe supports, and
 most consolidation/reversals occurred from timeframe dynamic
 highs.

So far the market is just rotating back into central zones of 
larger timeframes as it always does, with the Trend of 
August defined by price trading either side of it's 50% level.

*Dilernia Drops * currently favouring further downside in forward Month






Technical Analysis using Dilernia Dynamics & Principles

*Dilernia Model  © 2003-2007*


----------



## Frank D

*Dilernia Report*

DAX is another Market testing and breaking 
important timeframe support levels.

www.datafeeds.com.au/DilerniaDAXreport.pdf

*Frank Dilernia*


----------



## Frank D

Now we can see how important the Quarterly support levels are
 going to be. These levels on the SPI have defined the strength
 of the secondary trends for a number of years.

Support off this level and consolidation above it would 
favour another move higher into 2008.

Use lower timeframe levels for trend direction in forward months and 
short term weekly patterns.






*Frank Dilernia*


----------



## Frank D

--- Original Message ----- 
From: frankd@fdtradeco 
Sent: Friday, July 27, 2007 7:15 AM
Subject: DILERNIA REPORT


*SPI*

Market will try and close the Gaps today, 6147 and could go
 as high as 6192.

 However, where is your support???

  Today is high risk trading and might be an idea to sit it
 out until next week.

 For those who don’t care, I’d use 6065 as your RISK LEVEL 
TODAY with parital exits 44 points from swing lows.







*Frank Dilernia*


*Note: 44 points up from lows was 6093.*

87 points up (primary Range) @ 6137 will go close to closing the Gap..

 The market will try and fill the Gaps within 1-2 days 
using Primary ranges. 

Fading the gap on Primary ranges is an ideal trading strategy, once gaps 
are filled then those levels are important RISK levels in coming days. 
(next week)


----------



## julius

Dear Frank,

Would you be able to provide some further details about calculation of dynamic highs & lows as per AMT model?

(apologies if you've answered this before on the forum, I obv missed it )


----------



## Frank D

Julius,

I have written heaps of articles over the years, best to have a read.

http://www.datafeeds.com.au/AMT_articles.html

____________________________________________________________

Counter-trend Move back into August 50% levels.

Bouncing off July Dynamic lows 6003 using the Dilernia Model







*Frank Dilernia*

Dilernia model (c) 2007


----------



## Frank D

Early this week I was looking for a move back up to the 
August 50% level on the SPI, this was reached just after midnight
 on the first August and we can see prices rotate back down
 and follow the August dynamics lower.

Whenever there is a cross over the 50% level, there is 
an expectation price will move into a 2-period pattern down, so I
 would expect lower prices in August after reaching timeframe 
50% levels on rotation/resistance.

Support that exists in July dynamically shifts lower in August.

The interesting part of the August lows is that it is matching
 the 200 M/A average, and there is a cluster of support 
levels around the 200 M/a, along with the Quarterly 50% levels.

If the market is going to head higher, the SPI needs to 
stabilize around the 200 M/A (August lows) and continue to consolidate 
for a number of weeks before any up trend can continue.

If we get support and consolidation for a few weeks then
 swing traders should do extremely well into the end of the 
Quarter, as prices rotate between support and resistance and large 
Range days continue.






If it keeps going down, it keeps going down []

*Frank Dilernia*

Dilernia Model (c) 2007


----------



## Frank D

_In 2006 we can see the same pattern sell-off into Quarterly 
50% level and then into May lows before the market was supported 
and consolidated for 2 months before this next up move.

The exact same pattern that is occuring now in 2007






If the same pattern happens in 2007 then swing traders should 
do extremely well in that ‘consolidation phase’.

But Market dynamics is slightly different, as August lows are 
much further down, however the same price pattern would do nicely 
on the SPI if it can bounce next week these July lows (6007) 
and back into August 50% levels around 6140 before the next
 wave down into August lows. 

The same pattern as 2006. (Dilernia Weekly Report 28th July)_






Market has completed the 2-period down move into August lows @ 5922.

The same pattern as in 2006....

This rotation down into Quarterly 50% levels and 2-monthly 
extended down move happens every year, it is what occurs from 
now that will give traders an idea how the rest of the quarter
 plays out, because a Bullish market should move into a
 multi-week consolidating phase using these levels as support 
zone. don't be surprised to see prices head straight back up to 
50% levels.

That is going to depend on what happens in US tonight, and how
these lower levels play out for the rest of the Quarter, because 
there is going to be a lot more hurt if this quarterly timeframe 
goes straight down into much lower levels over the next 2 months.

*Frank Dilernia*


----------



## coquin

hy frank, could you tell me where i can find your book?
did you write your system in any software language?

thnks
bye


----------



## coquin

hy again, i've seen your book in your site, could be ship all around the world?
i live in Italy.
ciao


----------



## Frank D

Coquin,

current book is sold out.

I'm in the 'slow' process of writing a new book won't be ready for a couple of months.

*the trader trading *_'principles of successful trading'_

i'll let you know when it's ready

cheers,
Frank


----------



## Frank D

*DOW:*

_Next Week: I’d like to see DOW bounce early next week, move 
up into the August 50% levels before the next move down from 
the start of August into August lows. (28th July)_


The US markets just reached their 50% levels on a 2-day up swing 
on Thursday. The 2nd period down move into August lows has 
just started on Friday for US markets.

If Traders want to make Price base anaylsis of the SPI they need
 to have an idea what US markets are doing, US Markets will 
push around the SPI overnight, maybe when US markets might 
find support around August lows any up trend at the earliest 
will begin from September with a confirmed cross over on 50%
 levels, otherwise trend is down.

Always look for 2 day counter-trend moves with 3rd day sell-offs
 as weekly timeframes close down. It is the exact same tactic used 
on rising trends,  2 day reversals back into 3-day lows 
before uptrends continue.

----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Friday, August 03, 2007 7:29 AM
Subject: DILERNIA Report 3rd August

_If The DOW is going to follow a weaker pattern then price 
should stall around the 3-week 50% level (today’s highs) and
 drift back down into the end of the week._















_The same on ES, about to hit resistance around weekly and 
monthly 50% levels, with the expectation of rotation down._












The market is trending down, however lower opens will often 
provide upmoves back into the 3-day cycles, this is always
 expected at the start of the trading week, but the strength of 
the trend will always be determined after that move completes.

The first sign will be a break and close and the 3-day highs then 
a move back above 3-week 50% level.

Until then, enjoy the volatility and Daily ranges for 
short-term traders and be patient when entering long term
 stock positions.

*Frank Dilernia*


----------



## coquin

Frank D said:


> *the trader trading *_'principles of successful trading'_
> 
> i'll let you know when it's ready
> 
> cheers,
> Frank




yes please keep me informed...
i'm very interested.
thanks
bye


----------



## Frank D

*Dilernia Reports*


www.datafeeds.com.au/DilerniaWeeklyreport4august.pdf


www.datafeeds.com.au/DILERNIAREPORT7thAugust.pdf

*Frank Dilernia*


----------



## Frank D

_following this mornings report....._


----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Tuesday, August 07, 2007 10:29 AM
Subject: Dilernia Report 7th August 2007


Discreationary shorts on open to trade Gap fill, exit 5953 and 
move to neutral positions. (stops) above today's highs or 
breakeven from entry if there is a bounce off R22 lows @ 5968.

Expectation gap will fill @ 5947,   an 44 points down from highs 
is 5946, so there is a cluster of support here for anyone looking
 to trade longs, confirmed longs wound be trading with R22 hooks
 to move back into highs.

Don't trade longs below 5947 today.








----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Tuesday, August 07, 2007 11:47 AM
Subject: Dilernia Report 7th August 2007


Expected support 5947 reached and R44 lows.

confirmed supported would need to see a R22 hook off these 
levels, and then continue higher back into an R44 high.

Day traders buying off 5947 can partial exits @22 points up 
from swing lows and run open position into R44 high or double 
22 top.  (if R22 swing high is reached move stops to below todays lows)

*Not sure how the rest of the day into tomorrow will fair because 
the DOW is drifting lower after reaching 13494, can only expect
 much higher moves if US markets break 50% levels tonight.*

*Frank Dilernia*


----------



## Frank D

Partial exits around 95 points swing lows @ 13420, stops now above 
3-day highs holding rest







*Frank Dilernia*


----------



## Frank D

*SPI...*

Yesterdays expectation on SPI was trade either side of 6004, 
with the expectation that gap needed to be closed @ 5947 
first before the up move could continue into 6050.

Today the open aligned 6004 with the Rally into 6050, where there 
is major resistance, and it doesn’t help when the market rallies
 44 points because on most 44 point rallies sellers like to hit 
the market or cap it.

However a break on this and the next up move will be into 6085 
and then continue higher based on primary range bars and breakout.

 No shorts are taken at this level, it’s partial exits with
 the expectation the market is going to move higher.

The only weak pattern is if the market stalls at this level 
today and then breaks back below 5998 tomorrow.






Yesterdays report on US markets highlighted the higher weekly low 
in the forward weekly timeframe forewarning another up day 
resulting in a break of the higher timeframe 50% levels.

Mostly weekly patterns that start from weekly lows (Monday) 
breaking a 3-week 50% level the expectation is that markets 
move from one level into the next, so the expectation is that 
price can make higher highs back into 13875 on the DOW and 
1526.50 on ES.

If Wednesday ends up closing below 13493 on DOW, based on 
2 day rally 3rd day reversal, then market will probably be 
choppy into end of the trading week, with next best trading 
set-up next week

*Frank Dilernia*


----------



## Frank D

Expectation market would continue higher today, with the break
 of the range pushing market towards 6085.

6084 was an exit zone today, but not a  shorting zone. Even though 
my system shorted at the highs it was more for profit 
protection because the model favours higher moves.

It doesn't happen often but the rotation down into an R44 low
 which aligned with breakout support provided another long into close and exit at 6084 again.






*Frank Dilernia*


----------



## Edwood

good shout for 6,085 Frank I see we hit 6,087 twice today for HOD


----------



## Frank D

*Dilernia Report (SPI)*

www.datafeeds.com.au/Dilerniareport9thjuly.pdf

*Frank Dilernia*


----------



## Frank D

Frank D.... 1st August 2007 (recap)

_If the market is going to head higher, the SPI needs to 
stabilize around the 200 M/A (August lows) and continue to consolidate 
for a number of weeks before any up trend can continue.

If we get support and consolidation for a few weeks then
swing traders should do extremely well into the end of the 
Quarter, as prices rotate between support and resistance and large 
Range days continue.

Market has completed the 2-period down move into August lows @ 5922.

The same pattern as in 2006....

This rotation down into Quarterly 50% levels and 2-monthly 
extended down move happens every year, it is what occurs from 
now that will give traders an idea how the rest of the quarter
plays out, because a Bullish market should move into a
multi-week consolidating phase using these levels as support 
zone.

8th August 2007

“The only weak pattern is if the market stalls at this level 
today and then breaks back below 5998 tomorrow.”_

www.datafeeds.com.au/Dilerniareport10thAugust.pdf


*Frank Dilernia*


----------



## CanOz

So much for 5988...its headed for the daily pivot S1, 5959! Well, thats on the Aussie200 anyway.

Nice work Frank.

Cheers,


----------



## Frank D

There is a current thread running on Dr Doom predicting we are moving into 
a bear market….

https://www.aussiestockforums.com/forums/showthread.php?p=189929#post189929

Here are my thoughts...

I made the analysis at the start of this year that the market will run up
 in 2007 and into Quarterly tops before the market got hit and probably
 move down before the next up move in 2008.

I don’t think we are going into a bear market, I think in 2008 we will
 back around the highs or even making new highs….

Crash patterns and bear markets are two totally different things, and at
 the moment it’s neither. It’s a pullback after a run up, we have just run
 up further than normal so the pullback looks more server.

A ‘crash’ pattern is if the SPI hits 4860-4900 (2007 50%) which is a 
perfect time to start moving back into equities, and my opinion the 
market will back to where we are now or higher in 2008. 

I’m not suggesting the market will even go that low, but I know my 
timing of re-entering stock positions on margin and it will be this year.

Bear markets need to move in a multi monthly sideways pattern in 
1 year and then break lower the following year.

So if the rest of 2007 moves sideways and consolidates around the 
current range (without reaching 4890) and is stuck in a channel for a
 number months coming into 2008 then I’d be concerned if the market
 takes out the 2008 yearly 50% levels.

If that’s the case then look for 2 years down.

I’m looking to buy back in when the market is aligned with my methodology 
and model with the expectation markets will back around the highs again.

I won’t be looking to BUY if the market is in a bear market, and we
 are certainly not in one now or the forseeable future regardless of all 
the bad news floating around.







*1st January 2007*

_Years ending in 7 are notorious for experiencing some of the heaviest selling because of some outside influence that has spooked the markets. I’ve never been a ‘market-bear’ and never will be a ‘bear’ because I think any selling in the markets is just an opportunity to buy at cheaper prices, but in 2007 I think that once we move up into the higher quarterly extensions in either Jan-March 2007, or July-October 2007 then I’ll be looking for any hint of sustained weakness with confirming change of 3-period cycles. Most of any selling comes around the same cyclical patterns in the trading year. From past experiences and if we subscribe to the markets often repeating themselves then those patterns are around extended highs in the first or the 3rd Quarter of the year._

_Any weakness in 2007 will probably be just be a minor hiccup within the decade bull trend, just like May 2006 when markets tumbled before heading higher into the end of the year.
*
 If there is a hiccup in 2007 then there will be a scapegoat or something to blame, *but just as I’m painting a bearish picture for this year, it also allows us the potential too enter the market at cheaper prices.  It seems a contradiction, but falling markets helps to increase our wealth because it gives us to opportunity to buy at cheaper prices_

*Regards,
Frank Dilernia*


----------



## >Apocalypto<

Frank D said:


> There is a current thread running on Dr Doom predicting we are moving into
> a bear market….
> 
> https://www.aussiestockforums.com/forums/showthread.php?p=189929#post189929
> 
> Here are my thoughts...
> 
> I made the analysis at the start of this year that the market will run up
> in 2007 and into Quarterly tops before the market got hit and probably
> move down before the next up move in 2008.
> 
> I don’t think we are going into a bear market, I think in 2008 we will
> back around the highs or even making new highs….
> 
> Crash patterns and bear markets are two totally different things, and at
> the moment it’s neither. It’s a pullback after a run up, we have just run
> up further than normal so the pullback looks more server.
> 
> A ‘crash’ pattern is if the SPI hits 4860-4900 (2007 50%) which is a
> perfect time to start moving back into equities, and my opinion the
> market will back to where we are now or higher in 2008.
> 
> I’m not suggesting the market will even go that low, but I know my
> timing of re-entering stock positions on margin and it will be this year.
> 
> Bear markets need to move in a multi monthly sideways pattern in
> 1 year and then break lower the following year.
> 
> So if the rest of 2007 moves sideways and consolidates around the
> current range (without reaching 4890) and is stuck in a channel for a
> number months coming into 2008 then I’d be concerned if the market
> takes out the 2008 yearly 50% levels.
> 
> If that’s the case then look for 2 years down.
> 
> I’m looking to buy back in when the market is aligned with my methodology
> and model with the expectation markets will back around the highs again.
> 
> I won’t be looking to BUY if the market is in a bear market, and we
> are certainly not in one now or the forseeable future regardless of all
> the bad news floating around.
> 
> 
> 
> 
> 
> 
> 
> *1st January 2007*
> 
> _Years ending in 7 are notorious for experiencing some of the heaviest selling because of some outside influence that has spooked the markets. I’ve never been a ‘market-bear’ and never will be a ‘bear’ because I think any selling in the markets is just an opportunity to buy at cheaper prices, but in 2007 I think that once we move up into the higher quarterly extensions in either Jan-March 2007, or July-October 2007 then I’ll be looking for any hint of sustained weakness with confirming change of 3-period cycles. Most of any selling comes around the same cyclical patterns in the trading year. From past experiences and if we subscribe to the markets often repeating themselves then those patterns are around extended highs in the first or the 3rd Quarter of the year._
> 
> _Any weakness in 2007 will probably be just be a minor hiccup within the decade bull trend, just like May 2006 when markets tumbled before heading higher into the end of the year.
> *
> If there is a hiccup in 2007 then there will be a scapegoat or something to blame, *but just as I’m painting a bearish picture for this year, it also allows us the potential too enter the market at cheaper prices.  It seems a contradiction, but falling markets helps to increase our wealth because it gives us to opportunity to buy at cheaper prices_
> 
> *Regards,
> Frank Dilernia*





A excellent and objective point of view Frank.

I also read in the truth of the stock tape, that Gann also said that patterns of distribution require months to form.

Cheers
Joseph


----------



## Frank D

*Dilernia Report*

www.datafeeds.com.au/DilerniaReport13-8.pdf

*Frank Dilernia*


----------



## coquin

sorry Frank, can I ask you which kind of technical software did you use to create this chart automatically?
is one tool of fibotrader or something else?
do you sell it with the book?

let me know
ciao


----------



## Frank D

*Dilernia Report*

SPI, DOW, ES, ER2, DAX

www.datafeeds.com.au/DilerniaReport16-8.pdf

*Frank Dilernia * 

Coquin,

If you need to ask questions just private message me here or send me an email @ frankd@fdtradeco

cheers
Frank


----------



## Frank D

*SPI..*

Below is the SPI chart, I’ve circled lower opens and gap rallies 
and Gap sells in the market based on the open of the trading 
day, and the Primary Range alignment.

Right at the bottom of today I have a gap rally???  It doesn’t 
show on the Chart, but let’s look at the R87.






Each rally or reversal in the market was followed with a 
‘Gap’ in the Primary Range.

The down move from this week (6004) there were no gaps in 
the market, each day open rallied 44-49 points reversed and took
 out each R87 low resulting in trending down days following 
the weekly pattern lower.

 Even though there were gaps in the Day session, there were no 
gaps on the R87 until right at today’s bottom…








*So what happens today, they close the market down for 1.5 
hours, open the market on a lower gap, and we have a Gap 
rally!!!*

Once it moved back above 5553 and took out the ‘Hook’ the
 market went like a rocket and never looked back.

I would like to see the market settle around 5650 before the
 next swing upwards.


*Frank Dilernia * 


*Market Dynamic Model   The DILERNIA model   ©  

OTD Open Trading Dynamics  © Frank Dilernia 2003-2007*


----------



## Frank D

_That push down on Thursday on US markets and today’s rebound 
off major support levels will probably send markets in a 
massive consolidation phase into September. I don’t think those 
lows will break lower again this month… (Spi) Yesterday’s drop 
into 5650 and my view is that the market will rotate back to 5950.

 Ideally I would like the market to come down Friday and form a 
base and rise up from a lower weekly open, this will give traders 
a much better option to capture any advance up move. 
(August 17th 2007)_







Monday opened above the 3-week 50% level @ 5749, it was above 
this level for the first time in a few weeks, with the break of
 the 3-day average highs (5784-805) sending the market back towards
 major distribution zones on the SPI around 5950.

I’m still looking for consolidation into September with 
massive swings in the market on a daily basis…..

*Frank Dilernia*


----------



## Frank D

*Dilernia Reports*


www.datafeeds.com.au/DilerniaReport22ndAugust2007.pdf


*Frank Dilernia*


----------



## Frank D

Market closes above the 3-weeks highs at the close of the trading week @ 6190...(24 hour market)

Market Risk level next week 6186... not expecting too much
 downside, any rotation will be back into the Friday's lows 
6071 which will be the 3-day lows and move into a
 consoldiation phase into end of the week and into September. 

Further rotation down more than likely to occur from September,
 and Whilst trading above 6185 push upwards into 6255 before 
looking for reversals in the market.







Most reversals off lows occured at the same level each day. All Buying support came off double R44 lows each day as it continued to follow the weekly trend higher






Above shows Dilernia Pivots using R44 ranges bars, each level is 
clearly defined. The trader never trades against the Risk level. The trader 
are trading as close to support or resistance with the expectation price
 has to move 1 44 away until the range completes. 

Previous days pivot plays an important role on trend direction.

Thursday's pivot was 6138, it opened at this level and pushed upwards
 44 points, and then down 44 points once it crossed over. 
Friday sell-off occured from Thursday's pivot 6138 into Fridays Pivot 
low. (Information should be in new book (not finished yet)

Whilst price is either above or below the Risk level price has to move 
1 min 44 point direction before it completes and continues with the Trend, 
it takes the guess work out on trying to pick the direction on 
intra-day moves and removes a lot of the noise.


*Frank Dilernia*


----------



## julius

Frank,

Whats the ETA on the new book?

Can we preorder?


----------



## Frank D

Hopefully the book should be ready by the end of September. i'll let you know when.

Due to Asic I can’t post the Dilernia Report in this forum or give my view on Markets because they think I’m giving specific trading advice. I gather Asic was informed of the Dilernia report and my posts because someone ‘dobber’ thought it was appropriate to inform them. In fairness I’m not licensed so I can’t do it.

So my posts from now on will be like every other technical view, thus being delayed. A bit like Elliot Wave, subjective, always lagging and late.

The Dilernia Report will continue for buyers of the book, it will be free for first month as an educational tool so traders get an understanding the contents of the book and how it fits in with markets on a daily basis.

As long as I don’t give BUY and Sell recommendations, and the report is only part of an educational tool and follow up to the book, then it’s OK. Just like  Darryl Guppy does with his report.

I find it strange that I’ve called the market as I seen it for years, accurately and precisely, given heaps of free educational tips on trading, introduced so many to different ways of trading that has robust parameters and set-ups, which now many traders use directly or indirectly around the globe, and it was never a problem before. But once you start charging for a report someone feels threatened and they jump all over you. 


The contents of the book will give an insight to principles of successful trading, whether you are a stock or futures trader. Objective, Clear and Precise

Brent Penfold is writing a new book, there will be an entire Chapter devoted to the Dilernia Model.  Also my new book will be priced much cheaper than the previous one along with a free Daily Report on Trading.

Thank you for your support.

Regards,
Frank Dilernia


----------



## wavepicker

Frank D said:


> . A bit like Elliot Wave, subjective, always lagging and late.





Hello Frank,

would you care to expand and eloborate on EW being late and lagging???

Cheers


----------



## tech/a

*Frank*

Firstly it wasnt me!
But have a take on this.



> I find it strange that I’ve called the market as I seen it for years, accurately and precisely, given heaps of free educational tips on trading, introduced so many to different ways of trading that has robust parameters and set-ups, which now many traders use directly or indirectly around the globe, and it was never a problem before. But once you start charging for a report someone feels threatened and they jump all over you.




In the building industry I'm a staunch enforcer of Builders liciencing.

I have one.
It costs me squillions to have mine,my companies,and my supervisors correctly licienced and compliant.Let alone the constant learning and keeping up with the building code.

I compete against unlicienced builders who dont conform to Building practices and dont compete within the industry with myself or any other licienced builders on a level playing field.

If I was in an industry which needs to be licienced and I was competing with someone who believed that they should be able to do as I do without being licienced---I'd be Pissed---as if your were the holder of the licience you to would be.

Your passionate articulate and a leader in your field Frank,unfortunately the realities of the world of regulation catches us all.
keep it up--love your work and will buy your book.


----------



## CFD

Sorry to hear that Frank, put me down for a copy of your new book. Unfortunately this will give me a greater understanding of your posts just when you are not allowed to make them!


----------



## julius

Sorry to hear it Frank.

I hope you'll continue to contribute to the forum in spite of this - the information you have provided here for free is amongst the best I have come across in print or on the internet.

Many thanks for all of the time you've invested in sharing your knowledge & insight, it is most appreciated.


----------



## Frank D

*John,*

I totally understand the rules and regulations regarding ASIC, it just means I’ll stop posting my views on the market .

There is nothing wrong in posting a chart showing support and resistance levels without giving advice on ‘BUYING’ or ‘Selling’. I’ve spoken to ASIC about this. 

~~~~~~~~~~~~

*Cheers CFD and Julius!*

~~~~~~~~~~~~


*Wavepicker….*

The Three most important technical parameters in the market are Price Time and Volume.

Most methods worth their value have at least two of those parameters, the majority won’t have three. 

Elliot Wave has only 1, it is missing two of the most important parameters in technical analysis. 


The EW Methodology is purely based on price and price waves with no ‘time’ or volume components used in the theory, Therefore it’s lagging because ‘time’ is the only thing that can be calculated into the future, Elliot wave is missing important parameters in technical analysis.  

For many ‘Time’ is still a component that is confusing or they don’t know how to fully utilize it. I’m not talking about Gann and subjective analysis, I’m simply talking about timeframes and trends based on Weekly, Monthly, Quarterly and Yearly. 

It’s not about the Price traded but the Time of the trade!

A lot of people still don’t understand this term either.


Elliot Wave isn’t a forward looking methodology, you can argue this until you are blue in the face, it’s a lagging methodology because its entire theory is based on past ‘Price’ action. I’ve spent a few years with Elliot Wave in the 90’s, it looks good on a chart with all the fancy 5 wave patterns, but those patterns can only be calculated after the event has taken place. It’s certainly not a Dynamic trading methodology.

*Incorporate Elliot Wave with some form of ‘Time’ component and you’re on a winner, if you can do that, then you can call it the Wave-picker cycle model, however it needs to be an objective Model along with clear and precise trading rules, that everyone can use. When those patterns occur then everyone should be doing the same thing. Time and EW need to be combined as one and not separated to be a far more robust trading methodology.*

 EW on it’s own is not a generic model that everyone can use, it’s too subjective. 

Market Profile is another subjective methodology but it’s a completely different methodology, but at least it incorporates Volume. In saying that, there are successful traders who use both forms, but you might as well use previous support and resistance levels and cut out all the junk in between, it will be far less confusing, hence why I think MP is far more valid than EW, especially for day trading. 

For long term trading you might as well use previous support and resistance and a simple trailing filter as a stop, as Tech A demonstrates in his long term model.


There is nothing wrong with Elliot Wave, most methods should only be used as trading tools, but a number of different Elliot wave traders will give a number of different opinions.  There are no generic trading rules, only Theory rules. Try teaching Elliot Wave to a newbie and it will take years trying to figure out how to best utilize the theory. 

Trends, Support and Resistance is what the trader needs to focus on, and money management. 

A Price-‘HOOK’ around previous support or resistance level will say more about the market than EW.

Elliot wave traders only surface after the events have taken place and then make subjective calls about was has happened based on patterns that have already occurred. The current price action is a perfect example. The most recent Elliot wave analysis in this forum is lagging the market by three weeks and continues to be subjective. 

You have to be a very good trader to fully utilize EW, and that comes with years of trading experience under the belt. 

People starting out would be better to use support and resistance and stop wasting their money on EW seminars. Wasn’t it recently that you went to an introduction course on EW and the GURU teacher spoke about the ‘currents and the river’ to describe price action, and only to make you pay $1000’s to do the trading course.

If it’s not black and White then go back to the basics.


Jusy my View...

Frank


----------



## wavepicker

Hello Frank,

Firstly I thank you for taking the time to respond to the question.   

I have not looked at your AMT methodology yet and hope to in the future. ASIC can be a bit too hard sometimes and obviously someone has taken you to task.

You mentioned the three most important technical parameters in the market:-
-Price
-Time
-Volume

Essentially this may form the basis of the AMT method??

In my own experience (including Magdorans), the following parameters in this order are the most important

-Pattern
-TIME
-Price level

Volume is used more as a confirming mechanism.

For the most part I don’t disagree with your comments regarding Elliott Wave, except that I was taught to incorporate Volume Analysis with EW analysis and RN Elliott himself also used some form of volume analysis(although quite primitive and also generic to what other TA schools teach).

With regard to EW being lagging, I might have to disagree here. Yes it’s true that EW is dealing with past patterns, and these patterns have to complete (or at least be partially developed) in order to form an interpretation of the type of pattern one is dealing with. By identifying the TYPES of patterns that are being formed or have been formed, then it’s possible to come up with possibilities of the types of patterns and their magnitude that may follow.(ie look at forward timeframes) Various types of patterns repeat over and over with similar types of moves that may follow them. (I am not implying certainty here just that this is something that may happen more often than not) 

Most newbies spend too much time trying to count waves and trying to figure out which wave they are in. This is only of secondary importance and only relevant to determine the degree of trend one is dealing with. The keys are in the patterns, and one starting out should focus more on pattern analysis. Approaching EW from this angle is a better option IMO, Two posters with whom I have been involved with in this forum  are learning  EW in this way and have picked up very quickly (within 1 year)

The analysis IS subjective, but any TA methodology is subjective to some degree. Remember we are dealing with probabilities of future patterns, there are no certainties and we are looking for circumstances from which to trade. 


Frank D said:


> Elliot wave traders only surface after the events have taken place and then make subjective calls about was has happened based on patterns that have already occurred. The current price action is a perfect example. The most recent Elliot wave analysis in this forum is lagging the market by three weeks and continues to be subjective.






This is not always the case. Some classic examples of EW have been posted on this web site by various Elliotticians, well before we had any hard moves

In the XAO analysis thread EW charts were posted on the 15th July saying a high probability pattern was in place that would lead to a significant decline. 

See the following thread:

https://www.aussiestockforums.com/forums/showthread.php?t=4888&page=30

and refer to the following posts:

#597, 603, 607, 676, 679


A target for the DJIA even indicated on that chart in question. That target was 14000(There is a red number 5 at 14000 on post #603).  Magdoran even chose the date 16th July. Post #679 on the 25th July identified the move down as the most “significant” of the year, BEFORE the really hard moves down started. The rest is history. These patterns were based on EW analysis, the hard moves down that followed were forecast using EW analysis, and when this call (among many other calls that we have made on this forum) was laughed at and questioned by certain posters. As far as I can find in this forum there were no other systems/methodologies that made mention of the happenings before the big move down. One may say this was a one off and that we just got lucky, but throughout this forum over the last 2 years there have been numerous equally as good calls to such as in:-

-Gold (May last year) to the week
-Silver (May Last year) to the week
-Feb 2007 Stock market top to the day (Exact price and day was identified by Mag 2 months ahead)
-various stocks i.e. ZFX, OXR, TLS

but to name a few

BHP and RIO, two of the market heavies had long term patterns in place as far back as a year ago, that gave a good probability that their last “blowoff” move upward would be their last. I am unaware of any other method that could have identified this phenomenon 


These results speak for themselves and IMO are well beyond chance.


I fully agree with your comments regarding the use of time. For years I struggled with EW analysis in isolation. (That is not to say that EW is grossly inadequate in any way if used on its own using price and pattern). However the introduction of Cycles Analysis- incorporating a channeling type method and decomposing price data into dominant cycles has helped immensely. This is done for various timeframes i.e daily, weekly monthly, as such the one knows if the major cycles are currently up or down in a particular timeframe. For instance, the monthly chart in the XAO is showing cycles that are pointed hard down at present, but the dailies are still rising, thus giving one the added knowledge that this rebound maybe a countertrend and that more downside will follow  in the weeks/months ahead.

As well as this, a realization that minutia in the market(in terms of time points relative to fixed cycles ) actually repeat into the future at various degrees of trend.( I am still trying to learn this and appreciate Mag for his help and knowledge in this area- I call him the master of time!!) This has allowed me to view the market dynamics with a fresh pair of eyes over the last few years. Reciprocally, Mag has benefited from a further understanding (on top op of his own) of EW patterns, thus at times quantifying the potential of big moves following key dates he has identified. 


In the end it really depends which method(s) one is comfortable with using


Regards

Wavepicker


----------



## Frank D

*Wavepicker,*

As you say, you struggled with EW until you began using TIME parameters. But those Time parameters are completely separate from EW.

From your work and others, the component of time is a precise parameter in the market, nothing can change TIME, a month is a month, a week is a week, the only thing that changes is one month ends the next begins, therefore it’s the only thing in the market that is constantly moving forward.

This conversation is a totally different area that go on for pages, which I don't really want to be a part of.

~~~~~~~~~~~~~~~~~


*Back to the market…..*


_not expecting too much downside, any rotation will be back into the Friday's lows 6071 which will be the 3-day lows and move into a
consoldiation phase into end of the week and into September. (25th August) _


This week has seen a sideways pattern and perfect Spiral-points on Primary range.

August resistance disappears at the close of today and swings around into a lower ‘support’ zone next week

Expected test this level next week…







Can't post my view on next weeks trading because i'll get into Trouble!

*Frank Dilernia*


----------



## tech/a

People you can argue the Pro's and Con's of various methods infinitum.
But application of analysis is in my veiw far more important that Time,Price,Pattern,or volume.

If traders cant apply analysis it has no value,regardless of the components of that analysis.

Unless ofcourse you analyse for the sake of analysis.


----------



## Edwood

Frank D said:


> Can't post my view on next weeks trading because i'll get into Trouble!




personally I can't see what the problem is Frank, this is a free BB, no-one here is paying you for advice.  surely if someone wants to give a free opinion of potential behaviour then that's their business.


----------



## Frank D

Last week saw the market move up on the last day of August
 and push higher into the August highs of 6255 (weekly charts). 

Once 
the monthly timeframe ended the timeframe dynamics shift and we 
have new levels, with any extended up move sending the market 
upward and higher, *this will occur because future contracts
 are running at a premium to the SPOT contracts, so the closer
 the market comes to expiry the higher the market will be.*

 However, firstly I’d like price to come back into September 50% levels.






When markets close on the their highs on Friday there is
 an expectation that Monday or Tuesday will rotate back down 
into the 3-day lows, with the extended push down depending on how 
US market act in early September (tonight or tomorrow)

Weaker US markets will send the SPI back into 6070, strong 
US markets and the SPI will make higher highs into Friday.







Friday rallied from a lower Spiral point, next spiral point 
on Monday pushed the market down 44 points into the high of 
the Dilernia Pivot before bouncing and moving into another higher 
Spiral point at the top on Tuesday.

 This time the Dilernia pivot changed into resistance and Tuesday looks 
like the spiral top along with pivot resistance is the first stage of a 
greater rotation back down or back into the 3-day lows.

This will depend on US markets over the next couple of days.

*Educational post, not advice*

*Frank Dilernia*


----------



## Frank D

_1st September 2007.._

_*The DOW * is trading above the Quarterly 50% level, and
 if it’s going to head all the way back towards 13740, then 
it’s going to move upwards next week from 13340._

_Exactly the same expectation on ES, 1471 is the critical 
and defining level for September, above and it’s going to be 
a trending week upwards towards 1510.25._


That is the reason why today or tomorrow on US markets was going to 
be the day on further rises in US markets, the change in monthly cycles, 
from August 50% resistence, to September 50% support as it 
rotates back upwards along with December contracts running at a premium.











US markets are sometimes much more orderly using the Dilernia 
Model espeically the S&P.

*Frank Dilernia*


----------



## Frank D

SPI has done the higher open and sell-off from the higher spiral-point @6353 and pivot high.

The standard rotation of 44 points has completed, lower risk level 
6322, previous pivot high, whilst trading below this level expectation 
market is heading back into 6279






3-day lows are 6240

Frank


----------



## Edwood

another one of those gap-&-runs off the turn again I see Frank which you highlighted the other day


----------



## Frank D

Edwood,

If the weekly timeframe closes on its highs or lows I always look for
 a rotation back into the 3-day lows or highs (swing) trade. I want to 
sell higher opens and buy lower opens depending on the trend.

I also like trends to develop from lower weekly opens, not higher 
weekly opens as is the case this week, *and I also like major trends
 to develop from lower Monthly opens, not higher monthly opens, as is 
the case this month.*

As the old adage goes buy, low sell high. 

Day trading….

There are swing points in the market each day that selling or buying 
appears based on the ATR of the market, but the ‘follow-through’ 
doesn’t always occur, however a chunk of the ‘follow-though’ appears, 
that chunk is 44 points, it is a money pattern and potential $1100 per 
range per contract. I talk about money patterns in the book, as long as 
price is moving away from the spiral point the money pattern has 
to complete, As was the case, not only from yesterdays highs, but also 
once it started trading below 6322, it had to move down another minimum 
44 points.

 As long as the trader gets a partial exit around those ranges using 
primary range (spiral points) then the rest of the direction can continue, 
as occurred yesterday, or it doesn’t, as it occurred on Monday and 
Tuesday.

The Spiral point and I’ve described this before is one of the most
 important patterns in the market…. Why????  because they become
 ideal entry points; important because of least capital risk, and 
important because they’re closest to your initial stop loss point.  


For instance, today will be the first lower open and lower spiral point
 this week, this becomes a high probability pattern with a 
continuation upward a minimum 44 points, last week each lower spiral 
point provided perfect lows and continuation of the upward trend. 

However, last week the expectation that there could be a move towards the August highs @ 6255.

This week the expectation that there could be a rotation back into 6071, 
so lower spiral points are still probability patterns to go long from, but if 
the SPI does head down into 6071, I won’t be going long below the 
Spiral point. So the Spiral point becomes an entry but it also becomes a
 risk level so my stop becomes robust.







Three scenarios today:  

#1 lower open and market moves up 44 points and continues higher into 
6278 tomorrow

#2  lower open moves up 44 points and reverses back down and takes 
out lows and continues lower.

#3 heads lower from 6209

If it heads lower, I’ll be stopped out, and I know I won’t trade again today.

*Frank Dilernia*


----------



## Frank D

SPI opened much higher than expected, but the push down into
 6201 completed the Spiral point, so whilst price is trading or moving 
from that level the expectation is a 44 point move @ 6233 and 
extended move will take it to 6279...

However the pivot is 6224, so a reversal from a 44 point swing point high 
and trading below the Dilernia pivot, I don't want to be trading longs again 
today, and the spiral point low of 6202 becomes invalid on Thursday 
if price reverses back down into 6202

Basically if you want to be 'shorting', a R44 swing point high and drop 
back under the pivot gives you a good reason to short, or not to be 
trading longs again today.

But from now the outcome is random, I don't know whether price is going
 to make an major move down, or consolidate between the pivot and 
the Spiral low and head higher later.

But regardless, going long and parital exit around the R44 highs, I don't 
care what happens the rest of the day, but it gives others ideal levels in the market to manage intra-day risk







*Frank Dilernia*


----------



## Frank D

_With every reason to move higher this week due to the change 
of monthly timeframes this consolidating pattern and 
sideways movement this week has now a *‘dilernia-drop’ * in
 the forward trading week.  It is not a foregone conclusion but
 a drop in the forward week often sends the market down into 
the close of the trading week. If this is the case, then *
if Friday prices are trading below the September 50% level 
then downside expectation would be towards the 3-day lows and
 3-week 50% levels. * (7th September)_







*DOW*...

Prices pushed down into the 3-day lows and 3-week 50% level
 and supported, and with the break of the 3-day lows the 
expectation is that there should be a rotation upwards next
 week. Probability occurs after a change of cycle that the 
market will rotate up 1-2 days….

*How far that 1 day rotates is important because, a ‘hook’ and 
close back inside the 3-week 50% level @ 13235 can send the
 market back upwards towards the September 50% level again and 
3-day highs, as occurred the previous week. * (13235 as support).






This also aligns with a lower weekly open next week, because 
if markets are consolidating and moving in a sideways pattern, 
*then a lower weekly open and the bias it to close upwards 
into Friday next week.*

There is a lot of talk around at the moment that 55 days out 
from the start of the downside move, a 2nd wave of selling hits
 the markets, most ‘crash patterns’ have historically followed this pattern, as pointed out by others.

55-days from the highs as pointed out is September 12, this 
aligns with an up-day on Monday, but how far Monday moves upward 
is critical, *because the 3-week 50% level is going to 
define the trend for the rest of the week (resistance)*


*ES*







Prices followed the Dilernia drop into the 3-day lows, and 
the exact same set-up next week as the DOW for next week, the
 September 50% levels and especially the 3-week 50% level 
should give trades a fair idea about the direction of the
 market, after a 1-2 day upward rotation (random length)

*Educational post*


*Frank Dilernia*


----------



## Edwood

Frank D said:


> Edwood,
> 
> If the weekly timeframe closes on its highs or lows I always look for
> a rotation back into the 3-day lows or highs (swing) trade. I want to
> sell higher opens and buy lower opens depending on the trend.
> 
> I also like trends to develop from lower weekly opens, not higher
> weekly opens as is the case this week, *and I also like major trends
> to develop from lower Monthly opens, not higher monthly opens, as is the case this month.*
> 
> As the old adage goes buy, low sell high.




morning Frank, thanks for your comments the other day, apologies for not coming back sooner have been a bit tied up lately.  Put me down for a copy of your book when you get it finished, looks as tho it will be a good read

cheers, Ed


----------



## Frank D

*DOW & ES*

US markets both completed the 2-day upswing from a lower 
weekly open, both stalling at the monthly 50% levels.

DOW 13340 & ES @ 1471

The weekly 50% levels in both markets will play an important
 role for the remained of the week, because a rotating 
weekly timeframe, which closes higher on Friday will be
 supported, as happen last week.  

A weaker weekly timeframe will sell-off from the monthly 50%
 levels an break back under the weekly 50% level and continue 
down.

DOW 13235  ES  1464.







*SPI*

Market rotation going on from lower daily opens and higher 
daily opens, with todays higher Spiral point @ 6325, any
 rotation down towards 6184 if any weakness in US markets
 tonight.







If 12th September is the doomsday using historical patterns, then 
we should all know by tomorrow the likelihood of markets 
coming under pressure once again…

Or it’s just the case of the markets moving in a 
multi-sideways weekly pattern and more consolidation and 
swing trading for a few more weeks, which I much prefer!

*Frank Dilernia*


----------



## Frank D

_Once the monthly timeframe ended the timeframe dynamics shift
 and we have new levels, with any extended up move sending 
the market upward and higher, *this will occur because 
future contracts are running at a premium to the SPOT contracts, so 
the closer the market comes to expiry the higher the market will
 be. (4th September)*

*I also like trends to develop from lower weekly opens*, 
not higher weekly opens as is the case this week, ….as the old 
adage goes; buy low sell high. (September 6)_


Last weeks trading on Global markets is a perfect example of 
markets rising into Expiry as future contracts are running at 
a premium, and the weekly timeframe starting from a lower open 
and moving upwards into a higher weekly close.






For US markets, it was a case of waiting for the Hook and move
 back inside the weekly 50% levels and continue upward back in
 the highs once again.







I’d be happy for markets to continue and rotate for a number of
 weeks after expiry, because if markets continue to move 
upwards into the end of the trading year without more down 
'weeks', then volatility with begin to dry up.

Up rising weekly trends and trading ranges drop, and we move 
back into 4 days of small range days with 1 large trending-day 
that keeps the Daily ATR in balance.

*Frank Dilernia*


----------



## Frank D

Today September futures expire, and we move into December 
contracts.

The same pattern of higher prices as it chases the forward 
future contracts is playing out once again. Just another 
re-occurring pattern so that forward modeling of future events 
can be made.

Modeling pattern is the move towards October-December highs in
 the next Quarter, and as already pointed out before, expected 
higher prices in 2008.

Any rotations down occurring from higher weekly opens/monthly 
opens after expiry, and my support zone is 6135 in the next
 Quarter, and then looking for a new move higher into 2008…. 






*Frank Dilernia*

Just another 'better-guess'


----------



## Frank D

----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Thursday, September 20, 2007 6:49 AM
Subject: Dilernia Report


_Higher open and we have another spiral point on open.

Daily system short on higher open.

First partial exit is normally at the end of todays trading, 
and hold for next day open. However, Traders can use a partial 
exit zones @6409 (gap) or the R87 lows from swing highs today 
for swing or position traders.

If holding overnight moving stops to above today’s highs. (exit 
next day's open)

*Day Traders...*

 Higher open and looking to trade the short side again from 
higher spiral-points and Dilernia pivot…


Even though the expectation is for a large gap rotation back 
down into 6407, intra-day there will be support zones with 
most likely support zone will be around 6432. 

This is the high of the previous R44 bar so partial exits are
 around 6433-35 _ 






My partial exit was 42 points down from swing highs @ 6342 and 
now running it into the gap with stops above todays highs

*Frank Dilernia*


----------



## Frank D

*Dilernia Principles:

A break of the 3-month 50% level and expectation is that the market will move into a 2-period timeframe move into the next dynamic extremes:* In this case the September high







*The trader trading *_" principles of successful trading"_ has been completed and has been sent to the printers. 

It should hopefully be ready to be shipped in a couple of weeks.

Regards,
Frank Dilernia


----------



## julius

Hi Frank,

What are your thoughts on the current SPI movement - expectation the market may test the October 50% levels before continuing toward the quarterly highs?


----------



## Frank D

My view is for the SPI to continue higher this week. Remember the last day of August when the August highs were 6255, and the market rallied over 100 points on the last day to reach those highs, then I’m not going to discount that happening this week also. 

Whether it gets as high as 6635-55 or not, the weekly pattern suggests a higher close than the open on Monday.

I can’t see anything technical that suggests weakness in US markets or the SPI this week, other than one down day.

The only thing I’m looking for is how US markets react this week after last weeks trending rally into Expiry. *If this week moves in a sideways pattern and closes near the center of the trading week, then there is a potential for the market to reverse back down from next week*


So if that happens, then it could match a rotation, which aligns with the start of October.

Lets see how this week completes, and then see what the price action for next weeks probability patterns are, whether day trading or medium term (longer term analysis)

cheers
Frank


----------



## Frank D

SPI continues upward, and as Weekly trends move higher 
the volatility drops considerably, however the same patterns 
still appear but at a much slower rate.

Each rally has started from a 44-point swing low early in the 
day, and each minimum up move has completed the ‘money pattern’ 
from swing lows following the weekly trend.






*Frank Dilernia*


----------



## Edwood

Hi Frank have been keeping one eye on the daily range today - noticed we dropped 23pts off the open, then up 43, and we've since come back through 22 again....  guess I'd better start watching it regularly then!

thanks, Ed


----------



## Frank D

A drop in volatility in rising markets and the intra-day swing of 22 points is going to be much more prominent now compared to down trending markets.

22-point swings can be used to great advantage when buying the dips, as long as you have an idea where the market is trying to move towards, what’s the trend, and the direction of the market within the ‘current’ weekly timeframe.

If next week ends up rotating back down from a higher weekly open, then buying 22 swing points intra-day won’t be much good.

I have an entire chapter devoted to intra-day price action and ‘range trading’ for derivative markets….

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

_----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Thursday, September 27, 2007 8:15 AM
Subject: Dilernia Report 27th Sept part 1

SPI continues to climb upward towards the September highs, with the next spiral point @ 6602.

Therefore the early expectation is that the SPI will complete this range.

Depends where the market opens, but expectation is that 6602 should be filled

I would expect some kind of support around yesterday’s highs
A lower open today and moves up from 6572 and rising into 6602, then keep in mind 44 points up from lows…_

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Why 6602? *(spiral point*)

Because it’s 87 points up from yesterdays lows….

You can see the 50% ranges of each, 22 points move into 44 points, which move into 87 points…

What’s the high of today?… 6609…which is 44 points up from today’s lows. 

Bang the money pattern again..

The ranges are important, but so is the direction, the trend, support and resistance. Like a big happy family.


Cheers
Frank


----------



## Frank D

_----- Original Message ----- 
From: frankd@fdtradeco 
Sent: Thursday, September 27, 2007 10:37 AM
Subject: Dilernia Report 27th Sept part 1


44- points up is 6609

The same analysis applies,.. 44- points up, then use 6603 as a guide if wanting to trade down.... (higher risk trade)  

*i.e.  higher spiral stop open and coming down... (Dilernia pivot)* _







Each 87 points (spiral-point) will normally produce some selling around the highs, or some buying around the lows. It doesn't mean there is going to be a major reversal from a spiral point, it just means 'Risk' has increased around those levels....But most 'reversals' in the market will occur from a spiral top.

 therefore 3 things can happen for an intraday trader.

1. trade into the Spiral point(completion) from a lower open and exit. 
2. Trade shorts from a spiral point using partial exit tactics on the way down
3  or don't trade.

Tactics can be trading 44-point moves, or splitting up the partial exits into 22 points and then 44 points. It all depends on how many contracts you are trading. You need to adjust tactics and exposure based on market volatility and market direction

As the old adage goes 'trade with the trend'....You'll make money trading with the trend. However you don't always need a trend to make money. There are always exhaustion points in the market, but you need to minimise exposure. It's not always wise to trade max exposure on every trade.

I've always been told, every trade starts from a trend or is a trust out of a congestion area,  that might be the case when trading equites,but it's not always the case when trading derivatives.

There are always players that like to come into the market around certain ranges trying to push the short-term trend in the opposite before the overall trend continues. It's those points in the market that allow the trader to enter, exit or not trade at all.

You heard me say this many times before.... 

"_I’ll be introducing and identifying a ‘new’ pattern that has a statistically significant chance of price follow through. These patterns are called ‘Spiral-Points ©’: they are dynamic support and resistance levels that define the direction of the market and the high probable expectant outcome. Spiral-points are ideal for day trading derivative markets; they are an excellent timing tool to get you in and out of the market, thereby allowing you the potential to capitalize on intra-day moves. Spiral-points are extremely important because they become ideal entry points; important because of least capital risk, and important because they’re closest to your initial stop loss point.  

There are a few market patterns that occur with such unbelievable regularity that traders must become aware of them. No one, to my knowledge has engaged in more in-depth research (in this area). The principle concept is simply support and resistance. It’s one of the most important elements of technical trading. Why? Because it eliminates most of the guesswork and allows you to make logical, well-supported trading decisions" (2005)_*


Frank Dilernia*


----------



## Edwood

66pts from low to high (44+22) then down 21


----------



## Frank D

Edwood,

I wouldn’t analyze it that way:- you’ll end up with paralysis by analysis, but you can see the patterns intra-day.

I would analyze it this way…market expectation is heading towards September highs 6655….

Market open from yesterday swing lows, completion of 44 points @ 6617.

Whenever the market opens in the middle of the range from the previous day, the expectation is that the 44 point range has to complete (6617)

 This puts it above the ‘spiral point’ and yesterdays pivot (6603), with re-occurring pattern towards 6660:- 87 points up. Trying to trade shorts above 6603 today is open to risk with next spiral point at 6660  (not talking about scalping points here and there)






SPI completing the 2-period wave extension in September.

Normally these highs are viewed as resistance zones, however because it’s the last day of the month this level extends forward into October, so the target is valid but the resistance has moved upward. With any further advancement toward October highs in the next Quarter 7000+

So the question now…. Does October reverse down before it goes up, or does it contiune up before it reverses down…?

That all depends on US markets and Friday’s trading.

US markets are still short of reaching their September highs @ 14124,if Friday is going to follow the same pattern, then this will drag the SPI  higher overnight.






The DOW and ES are trading above their 3-day highs, so technically the price action remains bullish, and with no ‘drops’ in any forward timeframes then there is no forewarning of any weakness.


The only thing I’m looking for is how US markets react this week after last weeks trending rally into Expiry. As I mentioned a few days ago... _*If this week moves in a sideways pattern and closes near the center of the trading week, then there is a potential for the market to reverse back down from next week*_

Whenever a 3-day cycle changes, the next day can actually rotate back down into the middle of the 5-day range. If this pattern occurs on Friday, then I would favour a move down next week.

If the weekly pattern closes in the middle of the 5-day range, then my expectation is that the US markets will begin a push down next week back into the 50% levels of their higher timeframes, which will drag the SPI back down. This normally happens when the open of the trading week and the close of the trading week occur around the center of the 5-day range

However, it would be very hard to see at this stage a major rotation back down into  higher timeframe 50% levels on the Aussie market. There are no higher timeframe ‘drops’ in any forward timeframes to suggest a major rotation down.

Regards,
Frank Dilernia


----------



## Frank D

DOW and US markets have continued higher at the start of the
 new month, hitting resistance and stalling. 

Still can't see any major weakness in the markets with 
any forward 'drops', other than periods of consolidation.







*SPI...*

Wednesday Risk play 6684 if looking for Gap closure






Personally I wouldn't want to be trading longs below 6684 today.

I'm sure there would be some support around the September high
 price which aligns with the Monday high 'gap', but I would 
prefer to be trading longs around the 50% level of the 
5-day range or tomorrow. (hopefully lower open)

Frank


----------



## Frank D

SPI daily back into the 3-day lows. (6607) Once it broke 6684 
today, (1 day late) the rotation down followed the trending 
day down. 

These lows need to be verified by a higher open tomorrow, based 
on US markets rising overnight. 

Up day on US markets need to be strong, because a flat ‘up’ day 
in US markets and ‘drops’ are forming for Friday’s  Trading… 

Any further rotation down next week and lower 50% levels are 
levels of interest.






*Frank Dilernia*


----------



## Frank D

*DOW, ES, Er2, & SPI  Weekly Report*

www.datafeeds.com.au/DilerniaWeeklyReport.pdf

On holidays for next two weeks, so no updates. 

Frank Dilernia


----------



## Frank D

----- Original Message ----- 

Sent: Tue Oct 9 6:40am
Subject: Dilernia Report 9th October


_*DILERNIA REPORT 9th October*

US Markets

Both ES and the DOW are currently supported at their weekly 50% level.

The weekend report was looking for a push up into the weekly pivot highs before the reversal back into the weekly 50% level. Because the opposite has occured, this suggests the trend still remains strong.

Tuesday’s open will provide traders with the potential of a break above Monday’s high and continue towards the weekly highs.

*
SPI*

Daily system will be adding contracts on lower open today

Above 6648 and expectation the R44 will complete.

September highs 6655 (monthly breakout)_

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

*DILERNIA REPORT 10th October*

*US Markets*

Both ES and the DOW opened higher on Tuesday and have 
continued towards the weekly pivot highs, confirmed with the 
break of Monday’s highs.

All Global markets are trading above their September highs : - ES 1468 & DOW 14124.

It is extremely hard to see any weakness in US markets even at 
these highs. At this stage I would view US markets with daily
 ranges that have an UP bias but those ranges will become smaller. 

Further push upwards towards 14309, with last weeks highs as 
support on DOW (14190)


*SPI*

Daily system will be exitting contracts on today’s higher open
 to be neutral.


*Risk 6765*

Gap open on Daily range, the expectation that the gap will fill and could continue down into 44 points...(trading below 6765)

*Downward:-* below the pivots and expectation is that 
44 points will complete. There is obviously going to be 
some support around the previous 2-day highs, so any ‘shorts’ 
look for 22 point moves, with the hope of it contining down into
 R44 points (system matching)


 Trend remains up, above 6765 expectation:- *September higher breakout of 6655, and market dynamics in this quarter pointing to 7000+.*


----------



## Frank D

US markets are still trading above their September highs : - ES 1468 & DOW 14124.

ES continued with an UP bias and small trading range, whilst the DOW rotated back down into the 3-day lows. 

The interesting part of this price action is both markets have now ‘drops’ in the forward weekly timeframe, which suggests further weakness into Friday:- normally a rotation back down into the 3-week 50% levels.

However, things need to be verified, and that normally comes from a break of the 3-day lows, Or in this case Wednesday’s lows on the DOW.


This is the first time in a long time in US markets that there has been any forward 'drops', and it's something to keep and eye on, even though the trend remains UP and still confirmed by the 3-day cycles, along with the expectation price is following the October extremes.

However 'drops' are forming the view that momentum can quickly change, but price action needs to be verified


----------



## Frank D

*US view above...*


SPI will open up around 6754, which completes the 44 points down from yesterday's highs. 

Bullish markets often see these lows provide the entry for the continuation of the trend upwards (44 points), as was the case on Tuesday, but I personally don't want to be trading longs below 6765 today without matching systems, and 'drops' in US markets.


----------



## Frank D

Push down early in the day completing the 44 point low @ 6754.

Nothing stopping this market:- Looks to be heading towards 7000 much faster than expected.....as long as US markets remain above their 3-day cycle lows.

Use same pivots tomorrow.


----------



## Frank D

US Markets opened much higher, and the price action followed the drops resulting in a large trending down day back into the 3-day lows.

Both markets have now ‘drops’ in the forward weekly timeframe, which suggests further weakness into Friday:- normally a rotation back down into the 3-week 50% levels.

However, things still need to be verified, and that normally comes from a break of the 3-day lows, which it did, but price action still remains trading just above the 3-day lows.

If Friday is trading below those 3-day lows, let the market run its course, hopefully into the 3-week 50% level, and then look for a rotation upwards next week after the change of ‘cycle’ :- short-term 1-2day reversal before it decides it's direction for October based on next weeks 50% level.


----------



## Frank D

*SPI*

Higher weekly open on the SPI and expectation of a 2-day stall rotation down. 

2nd day of the rotation breaks the 3-day lows (6744) and heads 
into the weekly 50% level @ 6690. This is the first time is a 
number of weeks that the 3-day cycle trend has broken. (first 
sign of confirmed weakness)






Whenever there is a break of the 3-day lows, the expectation is 
that the next day will swing upwards and move into a 2-day 
counter-trend move. 

That will depend on how far the market moves down today,
 and tomorrow’s open, based on US markets.

 However I wouldn’t want to be trading longs below 6744 today…







*Looking at US markets…*

Last weeks drop, then 2-day up move, and this week’s break of the
 3-week 50% level on Monday, and it is the first time that 
weakness is confirmed on both the DOW and ES…


Whilst price is trading below both 50% levels the trend is 
down.







The only bullish price action would see a daily ‘hook’ back 
inside the 50% levels, then the expectation is that the market 
will swing back towards the 3-day highs on both markets, using 
the 50% level as support..,this will drag the SPI higher.

 Otherwise with all markets trading below the previous 3-day lows this 5-day (weekly) trend is down….


*Note:* 2-day counter-trend move has a random length, it 
can consolidate around these lows, or it can easily make it's 
way back towards the recent 3-day highs...

*Note:* there are no higher timeframe (monthly) showing forward drops suggesting major weakness in global markets. It's simply looking at the current price action and making judgement calls.

Sold 30% of margin positions today, still 70% held on leverage.

*100% committed and holding on long term portfolio. (never sell)*

Frank


----------



## Frank D

_Whenever there is a break of the 3-day lows, the expectation is 
that the next day will swing upwards and move into a 2-day 
counter-trend move. 

That will depend on how far the market moves down today,
and tomorrow’s open, based on US markets.(yesterday)_


Yesterdays break of the 3-day lows of 6744, and the day 
range remained below the break, and continued down as US 
markets pushed lower from their break overnight. However, today 
the expectation was for a counter-trend move back upward…..








 ----- Original Message ----- 

Sent: Wednesday, October 17, 2007 7:56 AM
Subject:  SPI Report 17th October

Today’s lower open, and the overall short-term trend is 
bearish. This can lead to a weekly ‘bar’ that closes on it’s lows 
as it rotates back towards the monthly 50% level.

*However a break of the 3-day lows and the next day there is 
an expectation that there will be a 2-day ‘stall’ rotation. In 
that case this favours a move upward.* 

And looking at the ‘lower’ R87 Spiral point @ 6705, any up move 
and the target is the R87 highs, which is 6772… (today/tomorrow)

Yesterday there was a lot of support around 6705 (pivots), this 
is also the R87 lows, so the expectation is that the market to 
move higher on open, look for R44 completion @ 6750, and then 
use previous pivot of 6744 as a trend guide for remainder of 
day with the expectation market is moving higher into a 2-day rotation upward. 

(random length and depends on price action in US markets)


----------



## Frank D

----- Original Message ----- 
Sent: Wednesday, October 17, 2007 11:47 AM
Subject: SPI  

* 
SPI*

Market rallied on open completing the R44 upside @ 6750... A 
bullish market would have remained above 6744 and continued 
higher towards the 87 high.

This reversal and back under 6744 and price action is 
bearish.

 The R44 move down will complete @ 6717, so there could be a 
day range that rotates around these 44 point lows, as part of
 the stalling day, but trading below 6744(3-day low) after the
 early upmove is a 'weak' trading pattern.







Use same pivots tomorrow along with 44 point moves..(new pivots will be drawn on the completion of this last 44 point range first thing tomorrow) 

Todays price action confirms this 5 day (weekly pattern) is favouring
futher down moves towards higher timeframe 50% levels (monthly), but 
at the same time I can't discount tomorrow moving higher as part of the 
2nd day of 'rotation'.

That will depend on where the market opens based on US trading. 




*US Markets.*

Tuesday:-  US markets followed the rotation down, after the break
 of the 3-day lows and the 3-week 50% level. Both US markets 
rotated back down into previous 3-week 50% levels finding support.

Very similar price action on US markets as what is occurring in 
the SPI:-  down bias based on the weekly ‘bar’.

Because of no larger timeframe ‘drops’ forewarning a major down 
move in global markets, I view the markets with buyers coming 
into the market trying to prop it up, before it rotates down as 
it follows the weekly trend down. 

'Drops' normally provide swift down moves, this rotation down 
looks far more orderly;- rotating days.

Today on the SPI is a classical example of this, and I’m sure the 
US markets will do the same. 

*Until there is a ‘daily’ close 
back inside the 50% levels ('hook')then the bias is down….*






6744 has been a guide on the SPI this past 2 days, and I would treat 
the 3-day lows in US markets the same way.


----------



## Frank D

2-day rotation playing out, hitting resistance around upper pivot @ 6790, but not necessarily a ‘sell’ day, this will be confirmed tomorrow.

A bullish 2-day swing can see the market head back towards the 3-day highs…. a weaker pattern will see a lower open and break back under 6744 tomorrow….


----------



## Frank D

2- day rotation ends, as it head back towards the 3-day 
highs.

 Tomorrow is my ‘sell’ day.  

That sell can be from a higher open tomorrow if US markets 
move higher, or from a  lower open.  

There are no major drops in the markets forewarning swift down 
moves on monthly timeframes, but just like today, the daily 
range has a random length, the day might only travel 44 points or 
it could travel down much further.

 Risk levels tomorrow of 6847, and 6790. 

 As long  I don’t fight the daily trend confirmed with the 
Risk levels.






Frank


----------



## Frank D

----- Original Message -----  
Sent: Friday, October 19, 2007 7:22 AM
Subject:  SPI report 19th October

*SPI*

Thursday:-  part of the 2-day counter-trend move upward after 
the change of the 3-day cycle.

Friday:- After the two day counter-trend move there is
 an expectation that the 3rd day will move with the trend defined by 
the 3-day cycle. In this case down. This is confirmed with 
'drops' in the weekly timeframe, which normally sends the
 market down.

Daily system goes short today.

Depends on the open of the trading day, but the expectation is 
that price will come down and complete the R44 low @ 6785.  

Last week, these r44 lows would send the market upwards, as 
they provided the 'lows' for a number of days last week. It
 could still happen, and that is why traders should respect 
price trading above 6790, and try not to fight the trend.


*Scenario:* I favour down moves, but not whilst price 
is trading above 6790.  (after R44 completion @ 6785). The 
daily range has a random length, it could only be a 44-point 
range today, or it could be very similar to yesterday and have 
a much greater length...


----------



## Frank D

*US Markets*

Break of the 3-week 50% level and markets have moved down into the higher timeframe 50% levels.  Price action using the Model defined the market path of price, however the ‘speed’ of any move is the unknown factor.

Expectation for this 5-day  weekly pattern was a ‘down’ bar.

A weekly down bar has a random length, this week full-filled the price action of market rotation back into ‘support’







At the start of next week the expectation is that the market will move in a ‘2-day’ counter-trend move upward, using these higher timeframe levels as support. 

However the first expectation is that there could be a push down first into the 3-week extension before support is confirmed and a rotation back into the weekly 50% levels next week.







Normally these higher timeframe 50% levels would support the market. This is also confirmed with the  ‘lower’ weekly open.  

These monthly 50% levels will be confirmed by a lower ‘Weekly’ close (support), and rising upwards from a lower weekly open. (next week)

The big difference between other times are: -  price is not rising upward from a  double monthly low pattern with the expectation price is rising higher into a double monthly high pattern, as we saw in July:- 2-monthly period wave pattern rising upwards into August/September

This ‘Time’  it’s coming down from a higher monthly high pattern. So certain factors need to be confirmed.  I do expect some support/consolidation around these lows, but again the 3-week 50% level will confirm market resistance and further upside gains.

The weekly 50% level will define the strenght of the trend.

Once again it’s not the price traded but the ‘time of the trade’ that’s important, as price rotates and extends, as time moves forward.

Everyone that knows my work, knows that I look for repeatable patterns. This price action from the break of the weekly 50% level down to the monthly 50% levels is a repeating pattern. 

However I’m not screaming out that I’m looking for a 2-month down pattern. It’s too early to say this will happen. At this stage my expectation is a slight push down on Monday with the extend 3-week lows used as support. 

The support should be confirmed on Monday, but rising upwards from Tuesday with a counter-trend move back towards the 3-week 50% levels before it hits resistance once again.


The Markets have had only ‘Weekly’ drops’ forecasting weaker weekly patterns. We have just experience this, now let’s confirm the rest.

Next weeks support is based on  monthly and Quarterly 50% levels, but only after the support is verified from lower weekly lows @ 1491 on ES, 13403 on DOW

*SPI*

Compare price on the SPI to the US markets and there is a massive drop to it’s own higher timeframe 50% levels, all the way to 6260. 

*Now the only way the SPI is going to go down to that level is if US markets continue down after the 2-day reversal pattern next week. But that is a 'path' the SPI can take during this month of October*

Daily system will exit on lower open on Monday to be neutral position.







*Frank Dilernia*


----------



## Edwood

good shout for Friday as a sell day Frank


----------



## Frank D

*US markets:-  *

Push down early on Monday, down into Support 
and now moving in a 2-day counter-trend move.







*Dilernia Report 20th August * 

_Daily system will exit on lower open on Monday based on sycom price

Why exit the shorts if there is a possibility of further down moves?

Because of the ‘gap’ on the R87, on most occasion a lower open 
like this will see prices try and close the gap on the upside 
from Monday. (gap 6678)

As price isn’t opening near any ‘pivots’ the Risk level will
 be the ‘open’ of the trading day. This is because of the 
‘Spiral’ point on both the R44 and R87.

With the expectation price will rise into the pivot lows of 6631
 and continue higher overnight_








Lower open on the SPI on Monday is following the US markets 
higher and also rising upwards from lower Spiral points on 
Monday.

This up move from the lower weekly open is also supported around 
the 3-week lows @ 6599. Whilst price is trading above those 
lows then the weekly trend is UP. 

However, not every day within a rising weekly trend moves up. 
That will depend on higher daily opens and what happens in
 US markets. 

At this stage ‘Weekly’ support in confirmed, but my view is 
only short-term 2-3 days, and I would expect at least a couple 
of weeks of consolidation before the next trend develops 
from November.

As long as price remains above certain levels then that’s
 the current view.







*Frank Dilernia*


----------



## Frank D

Gap down on the SPI this morning ended up working out much 
better. 

Sometimes the gaps overnight don’t work in favour of 
‘range completion’ for day-traders, but the 30-point lower
 open today worked perfectly….







----- Original Message ----- 

Sent: Tuesday, October 23, 2007 9:58 AM
Subject: SPI report


_Opened much lower than expected, but the expectation 
still remains that the r87 will complete from yesterday’s swing 
lows.

(day-traders) Partial exits @ 6658 and take the day off/ and or 
gap 

*Whilst price is above 6631 trend is up....2-day counter-trend move

**Risk is 6631*_


----------



## Frank D

*Weekly Principles*:- Whenever the Weekly timeframe closes on its lows, the expectation is that the next week there will be a 2-day rotating/stalling period. On most occasions this is a reversal towards the 
weekly 50% level. 

There are instances that there will be 1 weekly timeframe that closes down against the trend within the monthly timeframe before the following week resumes the trend…(*the trader trading ‘principles of successful trading’)

* The book is now available to pre-order… please click link  

http://www.datafeeds.com.au/futures.html

*SPI*


This is what is occurring in most global markets. There were 
only weekly ‘drops’ forewarning weekly timeframe weakness last week, 
and that has occurred. Now we are trading upwards from lower 
weekly opens, and today’s higher open will complete the first expectation of 
the reversal into weekly 50% levels @6730

Now it gets tricky…. 

A lower weekly open and the expectation is that Friday will close higher,
 so the expectation is a series of higher highs into Friday. However, not
 every day closes higher in an UP trending weekly ‘bar’. There will 
be instances of down days, especially from higher opens. 

The 3rd day is always critical, because it can continue to move 
higher towards the 3-day highs during this week, which are still @ 6829, 
or begin to move back down because of price still trading below the 
3-week 50% level and also the 3-day cycle is a ‘sell’

What do you notice about today’s open???

*It’s opening in the middle of the 5-day range. Day trading in the middle 
of the 5-day range is one of the hardest areas of trading. It can be 
choppy, and it can be a ‘tight’ trading range’ that often frustrates traders.

Sometimes it better to sit it out on these days and once again trade the 
next day.

However, ‘day-traders’ have the pivot levels as shown below in the range chart*

*Frank Dilernia*


----------



## Frank D

*the trader trading ' principles of successful trading'
*

*SPI.....*


Nice push up early in the trading day hitting ‘Dilernia-Pivots’
 on the high @6760 and rotating down.

Two bearish patterns:-  failure on the 3rd day around pivot 
highs and trading below the 3-week 50% levels.  

However, there is an expectation that there will be lower closes 
in an UP trending week. This is one of them, and it depends on 
US markets tonight and where it opens tomorrow.

Bearish pattern will see a lower open tomorrow below 6628, or 
price needs to remain below 6628 tomorrow, this would probably 
full-fill a lower low next week (2-period weekly low pattern in 
the forward trading week.)

A higher open on the back of higher prices in US markets and 
the Weekly UP trend will probably continue higher. 
(further report tomorrow)






*Frank Dilernia*


----------



## Frank D

*SPI...*

Nice set-up today, push down into a perfect 44 point @ 6651 and into
 pivot lows, and now with this R44 ‘hook’ and trading above 6691 
hopefully set-ups up for further gains today-tomorrow.  That depends on 
US markets tonight.

But in the middle of the 5-day range can be choppy and can remain
 range bound for today.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

----- Original Message ----- 
Sent: Thursday, October 25, 2007 8:14 AM
Subject: SPI report


*Technically:-  *the 5-day pattern is bearish, it's still trading below the
                         weekly 50% level and in a 3-day 'sell-cycle'

                     It's opening once again in the middle of the 5-day range, 
so  trading can go either way on open and could be choppy.

*Probability:-  *A rising lower weekly pattern from Monday has 
the potential to rise higher into Friday or make higher highs.


Depends on the open of the trading day, but whilst price is trading above 6691 the bias is to rise (Risk 6691 on open)

*Trading Day:-  *Random length, could be an inside day after 44 point completion, as it’s trading in the middle of the 5-day range. 

Or a 'bullish set-up' can follow the probability pattern of  making higher
 highs on Thursday breaking the 3-day highs and heading towards
the next Pivot where Daily system will exit, as long as price remains
 above 6691


----------



## Frank D

*US Markets:- 20th October*

_At the start of next week the expectation is that the market 
will move in a ‘2-day’ counter-trend move upward, using these 
higher timeframe levels as support. 

These monthly 50% levels will be confirmed by a lower ‘Weekly’ 
close (support), and rising upwards from a lower weekly open. 
(next week)

However the first expectation is that there could be a push 
down first into the 3-week extension before support is confirmed
 and a rotation back into the weekly 50% levels next week. 
The support should be confirmed on Monday, rising upwards
 from Tuesday with a counter-trend move back towards the 3-week 
50% levels before it hits resistance once again._







*Today On US markets:- * the weekly 50% level on the DOW 
formed resistance sending the futures down 180 points before 
the weekly UP-trend kicked back into gear.

*Friday:- * trend will be simply trading on the side of the
 50% level. Consolidating trading week would probably drift 
back into the 50% level of the past 5 days closing out the 
trading week in the middle of the range.

Above and expectation of higher high into Friday, before
an expectation starting next week of a 2-day rotation back 
down.

*SPI:-*

Copy and paste yesterday's report  (Risk 6664)

*Frank Dilernia*

*the trader trading 'principles of successful trading'*


----------



## Frank D

*US markets* verified support off higher timeframes 50% 
levels this week, and then followed the Weekly timeframe into 
higher highs on Friday. (_Previous week verifies support and 
next week rises up from lower Weekly open and higher prices
 on Friday)_

DOW expectation is a continued up move into the 3-day highs,
 before any short-term consolidation next week using next weeks
 50% level as support.

*Note: * Support needs to be verified i.e.   Price comes 
down into support, and the next day opens higher and follows 
the market path of higher timeframes towards the 3-week highs
 @ 14100+ 







*SPI:-*

Daily system/position goes neutral on Monday on Index. 

But expectation on markets is to continue higher in this Quarter.







*Frank Dilernia*

*the trader trading  'principles of successful trading'*


----------



## Frank D

*Objective trading rules:- * 

 Higher in 2008, as it moves in a 2-period quarterly timeframe higher:-

_Breakout of 2007 Primary high and expectation that the market will move higher towards the forward modeling pattern in 2008 _

* Medium term:-  * higher in this quarter heading towards 7000+

*Monthly timeframe:- * expect 1 week down period before support is confirmed and then heads higher the following week.

 This 1-‘weekly’ down period was forecasted with a precise rotation down using a ‘*forewarning model’ pattern called  ‘Dilernia-Drops’.* 

 Support verified using 50% levels and now expectation is that the market will move in a *2-monthly wave pattern upwards.* (Random length)

The only time this will come under Risk is if there are other ‘drops’ *forecasting reversal patterns in the market using higher timeframes or hitting upper extremes*. 

Or something ‘spooks’ the market, which no one will see it coming.

That’s the way my *objective view stands on global markets.*Even with sky high oil prices.


*Frank Dilernia*


----------



## Frank D

*SPI:- *

*Medium term:-*  expectation move towards 7000+ from November

*Short-term:-  *Expectation of a 2-day stall rotation back down (higher Weekly open/random length )

*Risk Pivots:-  *Stuck between 6796 and 6815, with expectation of ‘gap’ fill down (min move 44 points from swing highs),  

*Shorts *above 6815 open to risk today (day trading)


----------



## Frank D

*SPI……*


*Medium Term:-* Expectation to go higher in this Quarter 7000+


*Short-term:-* Part of the 2-day stall rotation back confirmed with system:- ideally down into the break of the 3-day cycle cycles @ 6767 and exit short positions to be neutral or continue to hold.

*Day trading:* - R44 completion @ 6793,  partial exits…  with Day trading risk above 6815 for the rest of today….

*Note:- A bullish scenario* will remain above the 3-day highs 6767 and either move higher tomorrow or gap open much higher tomorrow on the back US markets heading higher into the end of the trading week.

*A weaker scenario:-* is a continuation down, as part of the 2-day reversal back into the weekly 50% level 6714, which then defines the risk for the rest of the trading week.

A* 2-day rotation has a random length*, it can reamin above 6767 or it can come all the way back into the 3-day lows which are currently @ 6630, which aligns with the last day of the trading month….. 

*Support* needs to be verified, with the next day moving away with the trend after any 2-day rotation.


----------



## Frank D

*SPI* continues the ‘positive expectation’ of down moves towards the 3-day break @ 6768:- 

 * Where position traders can off load and go neutral, 
 * Or neutral on close today, 
 * Or continue to hold ‘shorts’ with the expectation that price
 is coming down further overnight.







_Why continue to hold shorts if you think the market is going 
to  7000+?…._

First day of a 2-day rotation has a random length, It's not a 
BUY day today, so either exit or remain short, and secondly 
US markets could come under pressure on any negative news.








US markets expectation of moving higher whilst trading above 
the weekly 50% level. It opened above on Monday and continued 
higher in both ES and YM…

However, forewarning pattern on weekly timeframes once again.
 This pattern can result in selling this week if trading below 
the 50% level, which can result in a random length that can last 
1-day or the entire trading week.

Weaker pattern will see a rotation back down into the lows of 
the past 3-days…as it consolidates into the end of the month (1 more day)

Trend is defined by Weekly 50% levels in both US markets.

*It all depends how US markets react to the Fed and % rates *

*The trader trading ‘principles of successful trading’*


----------



## Frank D

*SPI..*

Last day of the trading month and the Dynamics shift with the 
expectation that markets are moving higher in the next month.

We can see in the Weekly chart on the day session (below), the SPI 
is hitting upper monthly resistance, this resistance will disappear at the
 end of today's trading which will allow for prices to move higher towards
 7000+ in the forward month/s


A higher Weekly open and expectation is that price will rotate down for 2-days:- Yesterday was the first and  today is that 2nd day, and not helped by US markets now trading below their weekly 50% levels, and they have started the first day of rotation back down waiting for %rate ann.


SPI will come down and complete the range @ 6768, and bullish market will remain above the break of the 3-day high (6767) and head upwards.

A weak market (2nd day rotation), as another down day will have a random length, as pointed out yesterday, which can go down much further  due to the large gap to the 3-day lows, to close out the trading month.

*Frank Dilernia*

*the trader trading 'principles of successful trading'*


----------



## rub92me

Frank D said:


> *SPI..*
> 
> Last day of the trading month and the Dynamics shift with the
> expectation that markets are moving higher in the next month.
> 
> We can see in the Weekly chart on the day session (below), the SPI
> is hitting upper monthly resistance, this resistance will disappear at the
> end of today's trading which will allow for prices to move higher towards
> 7000+ in the forward month/s
> 
> *Frank Dilernia*
> 
> *the trader trading 'principles of successful trading'*



Hi Frank,
Thanks very much for your detailed analysis every day. I have a question about the above. Isn't the disappearance of monthly resistance you allude to rather artificial? Why do we wipe the slate clean when the next month starts? I guess I'm not clear on the significance of moving in to the next month aligned with what happens to be the Calendar month. Could we move back the start of the monthly cycles by say 3 days and come to a similar conclusion?


----------



## Frank D

Rub92me,

Market dynamics is based on Time and Price, that is the close of the timeframe, so you can’t move back 3-days and come to the same conclusion, because the timeframe hasn’t ended.

Why do we wipe the slate clean?

Because through my experience the market is based on cycles, trends, support and resistance.  And as each timeframe moves forward, those support and resistance levels move forward.  They aren’t static they are dynamic.

Someone might look at the market now and think it’s a double top and the market is coming down, I on the other hand acknowledge the resistance in this month, but also know through repeating patterns that the resistance won’t be there in November, and has less resistance to move higher.

But I also know that in shorter timeframes there are other cycles, even though the expectation is for higher prices in November. Not every day is an up day.

Then the question you need to ask yourself is:-  how am I going to profit by trading the bigger cycles? And that’s by trading and holding stocks over longer timeframes using Margin, whilst trading derivatives over 1-3 days.


Keep in mind there are much bigger cycles in the market based on Quarterly and Yearly timeframes. 

Frank


----------



## Frank D

*SPI:- *

Push down early filling the gap.

Day traders partial exit 6781, with the expectation market is heading
 higher with the shift if timeframes.  

Obviously US markets re-action to 
%rates will have a bearing on where the market opens tomorrow.

Risk 6752



*the trader trading 'principles of successful trading'*


----------



## Frank D

October resistance disappears today, and new levels on all global Markets

As everyone else is doing a blog, I thought I would do the same. 

 SPI, US markets, and will introduce forex down the track.

US blog should come out around 2.30pm EST

SPI should come out around 8am EST

You’ll find the Dilernia pivots each day, which often provide realistic
 ‘RISK’ levels, and also ‘swing’ points for traders to trade towards if 
holding overnight.

I’ll re-post blog here a couple of hours there after.


http://thetradertrading.blogspot.com/


----------



## Frank D

_forewarning pattern on weekly timeframes once again.
This pattern can result in selling this week if trading below 
the 50% level, which can result in a random length that can last 
1-day or the entire trading week.

Weaker pattern will see a rotation back down into the lows of 
the past 3-days…_ (30th October...)

*A Weekly 'drop' in the forward timeframe favors a 'weaker' 5 day pattern this week, the length of any 'weak' pattern is random, it can remain choppy or rotate down much futher.*


http://thetradertrading.blogspot.com/


----------



## Frank D

SPI hitting resistance zone of the lows of the past 3-days @ 6737,

However expectation is that 'gaps' are trying to fill on the upside.

Higher 'gaps' will fill if US markets bounce off November 50% levels.

US markets support confirmed on Thursday, and only if Friday rotates back upwards into a consolidating day, and doesn't continue down into a lower Friday.

If support is confirmed on Friday, then I would look for a similar price pattern on US markets as last week with an UP bias, using the Weekly 50% levels as definition of the trend.

The weakness in US markets based on 'drops' is only for the current weekly timeframe, and not larger timeframes

Friday support needs to be confirmed in US markets based on the 
Weekly close.

http://thetradertrading.blogspot.com/


----------



## Frank D

A bullish market in Australia would have normally seen today rally on Monday at the start of the trading week, but the 3-day lows and break of the weekly 50% level of 6716 is sending the market back down.

With a break of the recent weekly lows The next level down would be for the market to rotate back into the November 50% levels @6362

Friday I was looking for the 3-day lows @ 6737 as resistance, and then on Monday, I was looking for Gap closure today on the Upside, based on US support on Friday, but Aussie market doesn't like it, and is following the same market path as US markets down. 

No matching daily systems.....


----------



## Frank D

Day traders partial exit on R44 high @ 6660, swing traders would focus on a 
2nd 44 point move into close......


http://thetradertrading.blogspot.com/


----------



## Frank D

US markets cracked support today, and expectation is that the market is heading back down into October lows and then November lows...

Until US markets are back above the weekly 50% level in the forward trading week, the trend is down and will probably drag the SPI down into November 50% levels

http://thetradertrading.blogspot.com/


----------



## Frank D

Technically today’s trading worked well, the bearish pattern is confirmed by the break of the 3-week lows @ 6573, with the expectation that the market is heading down into November 50% levels.

Intra-day, the lower open provided the perfect entry. Not only for longs and ‘gap’ closure, but for traders wanting to enter shorts, around the Spiral point highs @ 6570 and trading below 6577.

Day Traders: Partial exit around today’s lows or R44 points down from swing highs @ 6528, with the expectation that market is going to follow further weakness.......



http://thetradertrading.blogspot.com/


----------



## Frank D

this would be nice today... past two days have lacked follow through rotating in 44 point ranges, but whilst it's below 6601 anything is a possibility today/tomorrow....

http://thetradertrading.blogspot.com/


----------



## Frank D

SPI completed the rotation back into 6506 and continued with the trend down following the 5-day dynamics and into the lower pivots.

Overall expectation of price heading back into the November 50% levels.....



http://thetradertrading.blogspot.com/


----------



## Frank D

5-day 50% level once again stalls the market @ 6544


Depending on what occurs in US markets tonight, but another weak pattern and expectation is to follow the market dynamics lower into the 5-day lows @ 6374, which goes close to matching the November 50% level rotation.


Last Thursday, the 5-day lows supported the market before selling off from the 50% level on Friday, and today the same pattern is occuring.... 



http://thetradertrading.blogspot.com/


----------



## Frank D

US report....


Both DOW and ES have completed their swing back into the weekly 50% levels.

These levels were viewed as swing targets from the lower Weekly open this week, and also resistance zones during this week.....

http://thetradertrading.blogspot.com/


----------



## Frank D

US markets reverse back down  into lows after hitting 3-day highs and Weekly 50% levels....

http://thetradertrading.blogspot.com/


----------



## Frank D

US markets on Monday were an each way bet, as long as traders traded on the side of the 5-day 50% level there was going to be a directional move either way....


_"However with this week ending, the higher weekly open next week can therefore continue down into another 5-day pattern towards those November lows as shown the Weekly charts:- *A higher weekly close followed by a lower weekly close as it heads down into November lows before major support is found in both these markets for this current month...*

The 5-day 50% level, as show above (red lines), are going to be a critical factor in next weeks trading because it’s going to set up the next 3-days of trading. Above and it will head back towards the Weekly 50% level.... *bearish pattern will just sell-off on Monday from the 5-day 50% level and head down *(Weekend report)"_ 

Monday headed straight down from the 5-day 50% levels and into the 5-day lows finding support on Monday.  Both markets are nearing their November lows on the Daily charts.....Full report on Tuesday's trading later...


http://thetradertrading.blogspot.com/


----------



## Frank D

US markets following the Dilernia model into Weekly and November lows.....

http://thetradertrading.blogspot.com/


----------



## Frank D

* DOW and ES-minis*

_"With the today's Dynamic lows lower than yesterday, I expect slightly lower prices on Wednesday before any rotation back upwards towards the 5-day 50% levels, and hopefully further gains....." (earlier report)_

Both US markets came down and re-tested the lows providing perfect enteries using dynamic support using three timeframes:- *Monthly Lows, Weekly lows, and Daily lows on both these Markets.*

For Those traders LONG it's now managing the positions in both markets.

Partial exit both US markets at these levels and move stops to below today's lows, and hold for a potential break of the 5-day 50% level tomorrow for a swing back towards the 3-day highs and Weekly 50% levels

This week's trend is going to continue to be defined by the 5-day 50% level, so there needs to be follow through tomorrow....

Full report later.....

http://thetradertrading.blogspot.com/


----------



## Frank D

*US markets:-*

Support around the November lows has been verified with the move back above the 5-day 50% level.

This market move was what the Wednesday Swing trade was about, with UP move coming 1-day late.

My expectation is for a continuation back towards the Weekly 50% level and move higher towards the December 50% before the next move ....

*SPI:- *

November 50% levels has verified support.

But is there going to be a classic 'sell-pattern' next week once the new month begins, or does the SPI move in a 2-month wave pattern upwards?

 Support (fair-value) confirmed in November and moves upward from December 50% level and follows a 2-month UP trend using the Dilernia Model....


----------



## Frank D

_SPI completes rotation into major support around November 50% level @ 6363, and this is also the 2007 Yearly high. Whilst price remains above the higher timeframe 50% levels, then the expectation is that the Australian market will move higher in 2008 towards the upper levels using Yearly timeframe dynamics.

There are two major support levels:- 2007 Yearly high breakout, confirmed with the November 50% level. The current price action at this stage confirms major support around November 50% levels, and often this provides the next 2-month Upward wave pattern. 

The December 50% level (confirmed on the last day of this month) will be the critical level on the Australian Market for the rest of 2007.....(SPI Weekly Report)_


----------



## Frank D

Yesterday played that role of filling the gaps on the way upwards on Tuesday, and today it’s playing the role of following the *market trend defined by the 3-day cycles and Weekly Trend:- DOWN*

Price is now back into Major support at the November 50% levels 6363, and further weakness is down towards 6251 and then proceeding lower into December lows.

Ideally I would still like to see consolidation into the end of the trading week, providing the better opportunity for short-trading down into the lower levels from December 50% levels, than this week.

No LONG trading for me around these lows today, see how it closes today before trading once again, as the potential to follow the weekly trend lower can occur:- higher daily close (Tuesday) followed by a higher daily open and moving down on Wednesday

Weekly Dynamics are 6273 (channel lows)

US markets still consolidating around major November low support zones.

If November 50% level @ 6363 continues to hold for this month, this same level won't be valid for support in December. 

Support disappears as Time moves forward. 

Trend Direction defined by December 50%:-


----------



## Frank D

This is what I wanted to see happen on Global markets:- November levels support the markets, and begin the swing back towards the December 50% level before the next trend develops.

This move on US markets above the 3-day highs and Weekly 50% level is the first sign that a major bottom has been set, but only for November. Any follow through is going to be determined by next month's levels.


----------



## Frank D

November closes and December levels confirmed.

Full Weekly report and analysis on both US Markets and the SPI sometime this weekend. (visit the blog)

cheers
Frank


----------



## Frank D

Most global markets have moved in a 2-day stall this week and found Buying support on the 3rd day.

Dynamically US markets are still trading below their December 50% levels, whilst the Aussie market is above it.

The closer it gets to contract expiry the more it wants to push higher....


----------



## Frank D

December 9th:-

Below is the Daily SPI chart:- rotating down from October highs into November 50% levels and moving higher from the next monthly 50% level, December.

The expectation is that the market is moving higher in December.

Next week the market path is mapped out to move towards 6735.

Ideally, the best and most profitable trading set-up would once again follow the market down into support and then rise higher as it chases the next level.

A rise upwards on Monday would be towards 6735, over a couple of days before the most probably reversal back into the 3-day lows.

*In Conclusion:- Market is rising higher in December, expectation market is moving towards the Weekly channels highs, as first reference...*


----------



## Frank D

Last week it was modelled for price to move towards 6735  and then reverse back down into the 3-day lows. SPI hit 6735 (sycom) and reversed back down into the 3-day lows, and more.

Down 5-day pattern:-  Weekly timeframe closing on their lows. This price action was not unexpected, because most new trends develop from lower weekly opens, as is the case next week.

However, the big difference now for any up-trend to resume is going to be the December 50% level, because technically everything now is pointing to lower prices.

The market is not trading above any support (50% trend identification), and could easily make lower lows in December. (below November lows)

Basically the 1 week reversal pattern has moved down to far for any major UP trend to continue in 2007, even though this week is contract expiry which often pushes prices higher by Thursday.

By analysing the larger timeframes, the market looks like it’s consolidating for the rest of the 2007, closing out December to set up the major Primary levels for 2008.

The Yearly levels (Primary Trends) are the driving force of all major trends.


Weekly Index reports for US markets have been updated.


----------



## Frank D

Market breaks December 50% levels and moves straight down into December low and support zones.

Weekly pattern is bearish, but there is a gap on the upside that needs to be closed.

That closure is only going to happen if US markets have follow through on the UP side, or from a lower open next week, as it rise upwards from support and back into January 50% levels in 2008.

The exact same pattern when US markets reversed off November lows.

At this stage December lows are valid areas of support.

Tuesday has an UP bias with a random length.

Island reversal anyone?

Only if US markets  ‘hook’ back inside Weekly 50% levels on Tuesday


----------



## Frank D

break of December 50% levels, support disappears, and price heads straight down into the December support.

3-day consolidation pattern, and the break of the 3-day highs, changes the cycle and the market rotates upwards.

Even when we look at the monthly timeframes before, it all fits in nicely with Time and Price analysis using the Dilernia Model:-

*October high-reversal, November 50% support-rotation, December 50% break-down, December lows support- rotation.*

Next Week:- Trend will be decided by the Weekly 50% level @ 6377..

Above and price is moving back upwards to close the ‘Weekly Gap’, and then be defined by January’s 50% level.

A failure around the Weekly 50% level, will be part of the rotation back down after the change of the 3-day cycle. There is such a large gap to the 3-day lows, that I favour at least a 2-day rotation-stall before any up trend is going to occur.

The important part of this week, is where price closes, because it sets up important levels for Primary Trends in 2008


----------



## Frank D

Last Week I was looking for a 2-day reversal back down from 6377 and into the previous break, with a BUY day on the 3rd day.

Next week becomes interesting for all global markets..

Weekly reports have been updated for SPI, DOW and S&P

*Note:* Rumour SPI dropping contracts to $10 per point from $25 sometime in 2008. I can understand this with CFD operators taking a chuck out of their business.


----------



## Frank D

SPI Daily chart:- Trading below Weekly and Monthly 50% level. (Bearish)

3-day cycle BUY:- Confirmed bearish pattern will be a break of the 3-day lows
@ 6295, and first expectation will be price coming down to re-test Quarterly 50% level @ 6246

*Higher Timeframe support 6246 (Quarterly 50% level, and Yearly Balance point)*If it comes down and tests 6246, this support depends how US markets re-act on Wednesday because of some very important levels.  

Because below 6246 the expectation is the Australian Market is heading down into January lows.

The overall trend in 2008 and this quarter is going to be defined by the Yearly balance point of 6246. 

*The SPI hasn't been below the Yearly BP since 2003, and it hasn't come close to this level in nearly 5 years, so it's an important level and trend guide early this Quarter..*

Market Dynamics has shifted 2008 higher 7200+


----------



## treefrog

top stuff frank - loved the 50% factor and linear regression indicator (mathematical prediction) before I saw your model - ingenious

wholly fundamental traders should make the effort to understand this - nar, just take their loot


----------



## Frank D

Last weeks failure around January 50% levels, and Dynamics are pointing to lower lows in this month.

*Today is the first day trading below the Yearly balance point since it crossed over it in May 2003....*

Below Yearly BP and expectation price is moving down into extended lows in January and Support once again....with more rotation within the monthly timeframe and then new levels pointing lower in February, as it makes its way back towards August lows once again in 'step formation' based on monthly timeframes.

Back above Yearly BP and rotation back towards monthly 50% levels once again and more consolidating Weekly patterns.....(which I prefer. Much better for swing trading)


----------



## Frank D

The Australian Market moved straight down into lower low after 
selling down from the Primary 50% level @ 6238...First time in 
nearly 5 years that price has been below this level...

SPI has moved down into January lows this week, with an expectation 
that there is about another 300-400 points down in this Quarterly 
timeframe...

However:- my expectation is that around January lows will find
 some support, and move into another Weekly sideway pattern
 before heading downing in the forward month....

Same  analysis used on the way up, as each monthly timeframe provides 
and road map:- support and resistance, and looking to do the same on
 the way down....


Weekly Index reports have been updated.......


----------



## Frank D

SPI has continued down into this level quicker than expected, but not unexpected.

The move down has been driven by US markets, and that move down was already forewarned in the US weekly report, and now i'm expecting a counter-trend move upwards.

I personally wanted a blow off bottom in the Australian market, but I think that with this low today, US markets probable up move this week, the expectation that over the next few weeks will be a swing back towards the Yearly balance point
@ 6328, and where all it started...

*Note:- I'm not expecting a new UP trend to devlop for the rest of the year, all I'm expecting is a counter-trend move to the Yearly balance point....*


----------



## Frank D

US markets have continued down into some very important levels today......

The important part of any major bull trend and support is the Yearly 50% levels based on the past 3 years of trading

12347 DOW CASH and 1374 (S&P cash)

We have already seen how markets have sold off from the Yearly balance points in 2008 down into these levels, but it's these levels in the market that define overall Trends in the market

These levels in both markets are extremely important because it becomes the 2nd phase of the bear market which can send the market down into much lower levels in 2008....

And Thursday's price action in the US doesn't show that anyone is really interested in any UP trend continuing...

Often you can anticipate major reversals in the market by using support or resistance, but the next day needs to have a follow through in the same direction and the new trend or counter-trend develops. 

That day was Thursday, and sadly things at this stage are looking even worse than first thought....This week's support and counter-trend rally upwards was based on the follow through UP on Thursday above the 5-day 50% level and breaking Wednesday's high.. however price tested the 50% level on Thursday, but pushed it down..

I can't see any major counter-trend move UP this week, unless FED moves in to cut rates, even around these support lows...

These higher timeframe support levels often provide major support in global markets each Quarterly period, and we are into these levels now, but at this stage it really needs a kick in the back side by the fed because I know the potential downside in 2008 is much lower than these levels now...


----------



## Frank D

Nice buying off the Quarterly lows today.....

I mentioned yesterday about a 'blow-off' bottom, and I think that was it.....

But the aussie market is being pushed around by US markets, so things need to happen in the US markets for a further swing upwards, as per yesterday's post....


----------



## Frank D

S&P 500

US markets sold off from the Yearly 2008 balance point into the Quarterly lows in 2008.

The same Quarterly support in the S&P cash since 2003, and price is now down into this level, and so far found some support around these lows on Friday.

The Dynamics of the market mapped out that price was making lower lows in this quarter, however sometimes we forget how quickly Price moves down to these levels.

We can see the previous falls in 2007 and remember how dramatic the first drop was in July 2007, and how dramatic this drop has been…

So will the market swing back upwards like every other time?

Probably not, because every other time price was trading above the Yearly balance point, whereas in 2008 it sold off down from the 50% level to the outer channels of the next timeframe….(quarterly)......(full report below)

*US index Weekly Report*

http://usindexweekly.blogspot.com/

*Australian Index Weekly report*

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


----------



## Frank D

This week I was moving into banking stocks and BHP, expectation that any blow off bottom would swing upwards and move into a 6 month consolidation phase before looking for any selling in the 3rd Quarter of the Year to move into lower lows for 2008…

At this stage I think markets will move in a sideways pattern and volatility will remain until things settle, and even push upwards in the next Quarter. Then I favour  further weakness in the 2nd half of the year …but I’ll come back to that at a later day .....

 (Wednesday SPI  Report 23rd Jan  8:30am)


_US Fed cut and this should stabilise global markets, and hopefully begin a gradual rise back towards the Yearly 50% levels over the coming weeks……

For any UP Trend reversal to take place, the first stage is the move above the 5-day 50% level,

The first baby step in any reversal is the 5-day 50% level (5435)

Any further moves upwards will be back towards the 3-day highs and previous 5-day 50% level @ 5715...that will happen if US markets continue upwards on Wednesday....

 (Wednesday SPI  Report 23rd Jan  8:30am)_

*Expectation that price will move to 5715 today 

 a blow-off top @ 5771 (today’s morning report 8:30am)*


Full report out on Global Index on the Weekend…..


----------



## Frank D

SPI rallied today into a top @ 5771

Analysis:- Failure at 5771 after such a big move early in the day, price can continue lower into the close.

Two possibilites coming into the last 100 mins of trading :- A swing upwards from (2.50pm) @ 5736, and heads upwards closing above 5771 (expectation of a down move next week after change of cycle)

Or it can move down into the close back towards 5715, and even close the gap @ 5580 either late today or overnight if US markets move down...

Blow-off top @ 5771

Whatever it does this afternoon it won't surpise me either way....


----------



## Frank D

*Australian Index Weekly Report *

Update: 26th January 2008

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

*US markets:- DOW and S&P....*

http://www.usindexweekly.blogspot.com/


~~~~~~~~~~~~~~~~~~~~~~~~~~~~


----------



## Frank D

Expectation early this week  was for price to come down and re-test the break of the 3-day highs and find support above the Weekly 50% level @ 5766...

A  Bullish weekly trend (next 5-day days) should remain above this level and head towards 5927+, and then towards February 50% level

Today is a stalling day, any further up moves will be from tomorrow..

Again it depends on US markets, and where it opens up tomorrow....

Because, as I mentioned in the Weekly report, below 5766 and expectation market gap will @ 5580 will play out...


----------



## Frank D

Markets will reverse and have range lengths based on the previous 
trading days, that is why we had a massive reversal last week, because 
of the previous 5-days of trading.

The same applies today, the 2-day reversal, which often occurs at the 
start of the trading week is simply trying to fill the ranges from the past
 5-days of trading.

And the gap of 5580 is still there….

_My morning post (7:30am)

SPI opening around the Weekly 50% level @ 5766, and it's going to
 move either way. A 2nd stalling day (2-day reversal at the start of 
the week) and expectation that price will push down a minimum 
44 points....

Wednesday:- Random length it could move down towards the pivot lows
 @ 5663._

If there is a reversal off these lows today, it will be impressive also,
 because it's just filling the ranges of the past 2-days of trading.

A rate cut tonight and I'm sure US markets will move higher....

A failure of a rate cut, and SPI will probably open around 5580 tomorrow.


----------



## Frank D

This week SPI moved back down tested the 3-day lows and now is making a bee-line straight towards February 50% level....

This level is the trend guide for the next 4 week.....

As I mentioned in the Weekly report, my expectation that the Quarterly lows will support price for the next couple of Months, and any 2nd wave of selling will probably  come in the 2nd or 3rd Quarters.....(From 3-month highs)

But we will get to that at a later date.....

Sold half of BHP today from $34.50 and holding until $42.25 to sell 2nd half...
If it doesn't reach $42.25 and it comes back down to $34.50 i'll re-BUY again...

If it moves up into $42.25, i'll be looking to BUY BHP again on the next 3-month low price pattern...


----------



## Frank D

*Australian Index Weekly Report *

Update: 2nd February 2008

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

US markets:- DOW and S&P....

http://www.usindexweekly.blogspot.com/


And In a couple of months I'll be releasing an E-book about trading Forex.....

You can follow the Daily report on GBP/USD....


http://thetradertrading.blogspot.com/search?q=forex


*The stock Report has been updated  (BHP)*

Regards,
Frank Dilernia


----------



## Bin57again

Hi
Is anyone following Frank's blog? It seems full of good ideas...
Bin


----------



## Frank D

Bin,

a lot of people read my blog, and yes it's full of good ideas.....


*Australian Index Weekly Report *

Update: 9th February 2008

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

*US markets:- DOW and S&P....*

http://www.usindexweekly.blogspot.com/


----------



## julius

Frank D said:


> Bin,
> 
> a lot of people read my blog, and yes it's full of good ideas.....
> 
> 
> *Australian Index Weekly Report *
> 
> Update: 9th February 2008
> 
> http://www.austindex.blogspot.com/
> 
> *US markets:- DOW and S&P....*
> 
> http://www.usindexweekly.blogspot.com/




Amen


----------



## Frank D

Australian Index Weekly Report 

Update: 17th February 2008

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

US markets:- DOW and S&P....

http://www.usindexweekly.blogspot.com/
__________________


----------



## Frank D

December support, January Crash pattern breakout, February resistance, and now March.....

It's not a good sign when the last day of the month closes below Quarterly support of 5493.

Personally I would have preferred upside strength into a re-test of February highs before then next extended down move from April. 

This could still occur as they often will support price or push price higher into contract expiry, however a breakout of the 3-week range and expectation price will push towards the extended zones within the current monthly timeframe.

5432 will give traders a pretty good idea on the direction of the market in early March, with a breakout below and expectation prices will push lower.

5432 is a line in the market for next week, and i'll just trade either side of that line:- above and looking for a swing upwards towards the 50% level in March (resistance)

Below and it's pushing lower....


----------



## dhukka

Frank D said:


> While you guys are sitting on your hands, i'm back into banking stocks this week, bought ANZ , WBC, and picked up CBA @ 51.70 today....
> 
> I'm looking for counter-trend rallies upwards back where we started from the Yearly sell-offs......
> 
> Place those stocks in the bottom draw and repeat the process next year....
> 
> cheers
> Frank




Still got those bank stocks that you picked up while the rest of us were sitting on our hands Frank?


----------



## Frank D

Yes I do, and I still have CBA since the float, and having buying Banking stocks every year since using the exact same support zone.

And I bought banking stocks at the lows recently as a trading play....

But if you read my blog .....

_I'm not expecting major gains in Banks stocks, I'm looking for consoldation that could last months and maybe a couple of years. ....19th January 2008_

I'm pretty happy with amount of dividends I recieve each year... cha-ching


----------



## Frank D

Aussie market has remained flat this week, as expected with the breakout of the Weekly lows, but with the March contract expiry coming up soon it's often pushed higher towards the date.

So looking for some Buying support to come back into the markets....but nothing to get excited about.


*Banking Stocks....update 6th March 2008*

http://aussie-stocks.blogspot.com/search?q=banking

BTW, I trade every day I don't sit on my hands


----------



## dhukka

Frank D said:


> Aussie market has remained flat this week, as expected with the breakout of the Weekly lows, but with the March contract expiry coming up soon it's often pushed higher towards the date.
> 
> So looking for some Buying support to come back into the markets....but nothing to get excited about.
> 
> 
> *Banking Stocks....update 6th March 2008*
> 
> http://aussie-stocks.blogspot.com/search?q=banking
> 
> BTW, I trade every day I don't sit on my hands




Well if trading every day enables you to pick up bargains like CBA at *$51.70*, I'm happy to sit on my hands.


----------



## Frank D

Australian Index Weekly Report 

Update: 8th March 2008

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

US markets:- DOW and S&P....

http://www.usindexweekly.blogspot.com/
__________________
_________________


----------



## Frank D

*Dilernia Principle:-* 2 timeframe wave pattern towards the Channel lows from the crossover...

Breakout of January (Crash pattern), and move down into March lows 5056, and now looking for a rotation back into the April 50% levels into the next Quarter...

*Note:* April levels will be confirmed on the last trading day of this Month


----------



## Frank D

BHP up date....

http://aussie-stocks.blogspot.com/search?q=BHP


----------



## Frank D

*Banking stocks Weekly Report...*

http://aussie-stocks.blogspot.com/search?q=banking


Banking stocks look to have found their lows for 2008....


----------



## Frank D

The reversal upwards from March lows and the higher move on Tuesday has pushed price back into the 3-Weekly cycle highs @ 5464.

In 'Bear' Markets price won't spend much time above 5464, and the failure around that high yesterday is an important level and reference point.

5464 could end up being a major resistance level for many weeks, and that will only change once there is a 'Friday' close above that level.

 In the last down-trend in 2002-2003, the Weekly cycles defined the overall down trend of the market....And it was until 2003 (double Yearly low pattern) that the Weekly cycles defined the UP trend reversal in March 2003

*If and when price closes above 5464 on a 'Friday', only then we can look at the market in a different light*, but at this stage I still favour global markets are heading lower in each Quarterly timeframe until the Yearly lows are reached in 2008...

*In My opinion the next 3-months looks like a major consolidating sideways  pattern.....*


----------



## Frank D

http://aussie-stocks.blogspot.com/search?q=banking


*Banking Stocks 29th March 2008

Australian Banking Weekly Technical Report*


----------



## Frank D

SPI moving up into the April 50% levels.

Using Weekly charts the April 50% level won't be confirmed until the end of this Week, as the previous Week has begun in March.

Therefore we could get a further Drive upwards into Friday, based on the March timeframe.

Probably be hitting some Brick walls around high 5800's, but those  Resistance levels will be confirmed at the end of this week.


----------



## Frank D

CBA swing back into the April 50% level @ 46.10.

And probably head up into 48.37  in this Quarter  (major resistance)

If CBA and banking stocks are going to continue upwards after this push higher in this Quarter, then it would probably be in the 3rd Quarter when the 50% level drops from $48.00  down, and then becomes support.

At this stage it's a rotation back into the 50% levels.

How far can CBA rise in 2008....  well from the 3rd Quarter it could end up back around $56.00, but at least around fair value pricing @ $50.71.

But i'll come back to that in 3-months time....


----------



## Frank D

BHP starting to get extended around these highs in this Trading month...

Even though the Quarterly move can take it back towards $47++++


----------



## Frank D

_SPI plays to keep an eye out in April. (Weekly Report 5th April)

B. Reverses down early next week and re-tests the 3-week cycle high breakout @ 5464 before finding support....

C. Reverses down early next Week and continues down into the 3-week lows..._

*We have just completed Set-up B, a move down into the breakout of the Weekly highs @ 5464...*

Now let's see whether tomorrow it continues down to the Weekly lows @ 5299, or swings back up into the 3-day breakout @ 5591.

I favour the 2nd pattern and move into a 2-day counter- trend rally Upwards, as long as the US markets remain stable, and we open up around this level tomorrow.


----------



## Frank D

Australian Index Weekly Report 

Update: 12th April 2008

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

US markets:- DOW and S&P Weekly Reports

http://www.usindexweekly.blogspot.com/


----------



## Frank D

*Weekly Report.... 12th April 2008*

"C_ & D set-up:- Continues down into Weekly lows, and then swing upwards back into the Weekly 50% level, and as high as the April 50% level 5615

This is because of the Lower Weekly open and swing back upwards into a 3-day counter-trend move with the 'new' 5-day trading pattern."_

*Morning Report 17th April*

_"Today's open will be a gap open above the 3-day highs, whenever this occurs there is an expectation that price will come down and re-test the 3-day high break @ 5548.

We can see there is a large gap to the 3-day lows (5374), *therefore I expect a 2-day stall reversal until those 3-day lows catch up with price *for any higher move to continue.

Therefore today I'm looking for a push down from the higher open in an R44 low, but then Thursday moves into a consolidation pattern of 44 point ranges for most of the day."


*Below SPI Weekly and Daily charts*_


----------



## Frank D

April 50% level @ 5614 rejection pattern....

2-day reversal heading back down towards the 3-day lows @ 5374....


----------



## tech/a

Nice Frank.
Like reading a book!
Only your writing each chapter a day ahead.


----------



## Frank D

Tech,

When you analyze markets from top down it makes it easier to ‘forward’ think markets 1-3 days ahead.

By looking at the bigger picture from the Yearly timeframes down into 5-day patterns,  it makes iteasier to understand what’s going on in the current day.

Then it’s just a process of finding low Risk entries and taking chunks out of the ATR for day trading, I don't look for completion targets of my Daily analysis, I just take chunks based on 22 and 44 range movements within the Daily Price action using spiral points....

I always forward think every day based on two probable outcomes within the 5-day pattern and then wait until things line up.


My view stands at:-  a 3-month sideways pattern  in this quarterly timeframe, so we are going to get 3-day counter trend rallies within the Weekly 5-day patterns, within a major down trend.

And once this 2-day reversal completes today, we will probably end up rotating back upwards next week, into another 5-day sideways Weekly pattern from next Week....

With the overall potential move upwards into 5800+ in April-June Quarter.

Will it go to 5800?  who knows and who cares!!!!

I don't care because I'm not trading anything that factors in holding for that long...

*Full Report in tomorrow Weekly update in Index Markets....*


I’ve already been lambasted by some on my BUY call on Banks around fair value around higher prices in January, but the whole time it was about investing 10% of yearly profits into banking stocks around fair value each year. I do it every year, and I will continue to do it…(chapter 11)

 I don't trade margin positions below Yearly balance points, Once January opened below the Yearly balance point, any margin positions are open to RISK. I don't short trade stocks. I can do that in index Futures.

The whole time I’ve always said banking stocks will go lower. From day dot I said, "don’t trade margin positions, as banks will go lower in 2009, *but in the mean time there are still trading opportunities in BUYING banking stocks within each Quarterly timeframe…."*

There are times when you invest for the long term, and there are times you trade and take profits.

That is why I bought all four banks around Yearly lows and sold them all at a profit on the reversal upwards into the end of the Quarter in March, because I always said that I expect that price will rotate UP back into the April 50% levels.

Those lows came around my March timeframe lows and a swing upwards into the April 50% level  For gains between 5-14% in all four banks… 

As I mentioned in my Stock Report on 22nd March 2008…


_Banking stocks have found their lows for 2008 , but I don't think there is going to be too much upside. 

I think banking stocks can move UP towards the Yearly 50% levels once again over the next 6 months, but I think the financial stocks will remain range bound between the current Yearly support zones and Yearly 50% level, and then head down lower in 2009.

So what's my strategy for the rest of the year?

Well we have nearly completed the first Quarter and we have 3 Quarters to go.

My strategy is to try and take between 5-15% gains per quarter, and those gains are going to be dependant on my entry prices. As you can see the same strategy recently Buying around the current lows in banks but the % gains are dependant on my entry prices.

Between 5-15% gains in each Quarter and I'd be pretty happy with that for 2008. That is why I want to be Buying back into banking stocks around the Yearly lows again with the expectation that the Yearly lows will support banking stocks for the rest of 2008 and rotate back towards the Quarterly 50% levels.


Therefore I want to be trading double lot positions on Banks around Monthly and Quarterly lows looking for rotations back towards the higher timeframe 50% levels for the rest of this year

Because Banks will be under pressure and will have enough volatility to be pushed around for many months to come, I will move into weekly swing trading and using the Weekly lows and short-term trading of 2-3 day patterns back into the 50% levels and exit zones.  _


*Today I’m being filled on some of my Banks around the weekly  lows. NAB @ 27.85  WBC on Monday @ 19.90, ANZ trying to get it @ 19.80+, and I exitted CBA this week on my 2nd trade @ 42.99 on the higher open.

I already exitted CBA @ 45.10 a couple of weeks ago, But I want to see where this week completes before deciding the price level that I want to be Buying CBA again next week....

These trades are all short term trades, so I won't be holding them for long.

If I can do this over the course of 2008 in a Down market, I’ll be pretty happy to take between 5-15%, as I don’t have to concentrate too much, I just have to wait until BUY zones are reached and not chase the entry levels.

Then I can focus on all the short-term stuff for my income….and then pump another 10% next year into investing into banking stocks in 2009 around Dynamic yearly lows, which will be lower than 2008 prices.*


*Note: I always break up my banking stocks into 2 lot enteries in down trending markets so that I average out if my 2nd trade if price moves against my first trade.

I always factor in that stocks will always rotate back into 50% levels of higher timeframes...*, but not always at my initial entry...

I do not want to be holding banking stocks coming into the middle on June, because if there is going to be a 2nd wave down in 2008, the potential exists for June to send banking stocks lower.

Therefore once again i'll will wait until banking stocks hit Quarterly lows in July-September and then hopefully take a bigger percentage return on any reversal upwards...

Have a good weekend.


----------



## Frank D

BHP heading towards $47+ in this Quarter, with a potential move towards $55 in 2008....

As it head towards $47, it closely follows the Weekly patterns in step formation, so it gives you an idea about how long any move can take whilst you have a view of the bigger picture...

Whilst price remains above $39.11 then that's the only view I have is to complete the move to $47+

If or When BHP reaches $47 then i'll wait until the next Quarter to be trading Longs on BHP...

Note:* In previous post I mentioned I bought WBC @ 19.90, its was 21.90 last Monday*


----------



## Frank D

2nd trade  and exit  @ $23.84 nearly nearly 9%.

WBC will probably head higher into Results on 1st May, and probably open higher tomorrow, but it meets my exit target and now on sidelines until next time.

Nice move on banks from last week


----------



## Frank D

NAB Bank Partial exit $30.70  holding 2nd portion into $33.80


----------



## Frank D

QANTAS trading around yearly lows and expectation that Qantas is rotating back towards the fair-value level @ $4.80 in 2008.

This week I posted in the blog (stock Report) that I'm buying @ $3.37 and looking for a move towards the 50% level to partial exit Qantas, and then for further gains higher in this quarter.

My Risk of the trade is to rotate down into the B set-up if it fails, but my overall expectation is that the Yearly lows will support price for 2008 and rotate upwards using a partial exit strategy on the way up..


----------



## Frank D

*Australian Index Weekly Report *

Update: 3rd May 2008

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

*US markets:- DOW and S&P Weekly Reports*

http://www.usindexweekly.blogspot.com/


----------



## Frank D

Last Week I bought QAN @ 3.37, and everything was looking good for a couple of days.

My partial exit strategy was to exit at the Weekly highs @ 3.73 and run an open position into the Quarterly 50% levels @ 3.87

I factored two bullish scenarios since my BUY....

A:- push up into @ 3.73, exit 50% position, and then re-buy the same 50% position at the Weekly 50% level @ 3.53 and hold for a move higher.(5-10 days time)

B:- price was going to move down into the Weekly 50% level @ 3.53 early this week, and then bounce up into 3.73 and continue upwards in 10 days time.

However Wednesday hasn't been able to remain above 3.53 and the Weekly 50% level.

Even though I'm still in the money on today's close @3.42, the price action of breaking the Weekly 50% level isn't a good sign.

Therefore strategy has changed to 50% exit my longs on stop @ 3.32 -5 cents (below last weeks lows) and hold an open position on remaining.



SPI This week has pushed up into the Weekly highs and now reversing back down towards the MAY 50% level, as per Weekly report.

US markets are forming *'Dilernia Drops' in the forward Weekly timeframes*, which suggests a lower Weekly close by Friday, and probably follow the Weekly Report of a rotation back into the May 50% levels (Weekly report).

This normally occurs on either Thursday or Friday, (5-day channel break)which gives me another reason to run stops on Qantas, and look to re-enter later.


----------



## Frank D

Weekly Dilernia 'Drops' :- expectation that BHP is rotating back down into MAY 50% level.....

If BHP is going to continue higher, then I would look for a lower Weekly close and support around the 50% level this week, and then rise Upwards from a lower Weekly open next week, as long as price remains above the 50% level


----------



## Frank D

*National Aussie bank*

Expectation NAB is on it's way to 33.90....

Last week partial exit NAB @ 30.70 from $27.85

As per last Weekly Report:- ReBUY NAB @ $30.50 on any pullback, and partial exit today @ 32.55, leaving open rest into $33.90


*BHP:-*  bummer on BHP because the MAY 50% level was my next BUY zone to re-enter BHP before it gets to $47.00, as part of the Quarterly UPswing.

Once BHP hits $47.00 in this Quarter, I won't trade LONGS on BHP until the next Quarter from June onwards.


----------



## Frank D

SPI completing the first stage of MAY's rotation back into 5870...

With overall push up into 6055....which might take another 5-days to get that high.

BHP completes Quarterly target 47.08 +,
NAB completes Quarterly target 33.89+

QAN currently dogging it....if it can get it's sorry Ars* over 3.46 this week (Weekly 50%)  it might attract some buyers, but it just looks like it wants to go lower


----------



## Frank D

*QANTAS* was dragging it's tail for a few days...

Partial exit 3.73 and holding.....

Anyone interested in AUD/USD .....

http://forexspread.blogspot.com/


----------



## MRC & Co

While I must admit these charts are hard on my eyes and I am having trouble getting my head around exactly what you are saying (maybe I'm just thick (isn't this meant to be simple?) or need to have a crack at your book), there is some good stuff throughout the thread!  

Thx.

Cheers


----------



## Frank D

Thrust and swing:-  

Trade from central zones outward:- Thrust patterns

Trade from channels to central zones :- swing patterns

Each pattern is based on Time in multiples of 3.

Find low risk entries and trade using partial exit strategies regardless of whether trading stocks or derivatives. 

The higher the timeframe the greater the movement…. Read the start of this thread will give you a better idea.

Simple????

Yes it is….. BUY support Sell Resistance

You would need to have a crack at my book, which is currently only in Hard back, but I’m going to do it in as an E-book, and drop the price which reflects printing costs and postage.

I will guarantee   I will change the way you look at the markets, and change the way you trade.

*However I can’t guarantee you’ll make money, some people are just absolutely useless as traders no matter what method or system they use.*


----------



## MRC & Co

Yes, looks simple and effective and I am sure once I got my head around it, would not be a problem.  A few things throw me out:

- A 2-month wave is NOT 60 days, it’s based on the higher 
timeframe (monthly), the current month expected price move into 
the following month based on the AMT model and market dynamics. 

- 50% of what?  The weekly, monthly, quarterly, yearly respective ranges?  

- Spiral point?  

Guess the book would explain the exact steps in much more detail (so no need to rehash it all).  I saw it mentioned in Brents book (Trading the SPI) and as 50% is the strongest gravitation for price out of Fibonacci theory, makes sense to use it.  Especially in relation to various timeframes to get the overall picture and a breakdown of price swings within swings.  

Agree with some of your other sentiments however, trend (guess this is where I incorporate time), support/resistance, volume and money management are what I currently use with good (not yet great) effect.  

Cheers


----------



## James Austin

Frank,
where can I access literature re setting up Fibonacci software as you have, with your channels etc?
thanks
James


----------



## Frank D

James,

Go to fibonacci Trader:-  www.fibonaccitrader.com  there is enough information there.

What you see in the charts are templates I built myself, which the info is found in my book.

If you have any other questions just private message me.

cheers
Frank


----------



## Frank D

Next Week the SPI will complete the Dilernia Principle of a 2-wave monthly pattern towards MAy's highs @ 6065..

http://austindex.blogspot.com/

 The Yearly balance point (6200) is where the entire sell off started in 2008, it would not surprise me to see a re-test of the Yearly balance point in 2008, but at this stage that's not my view. My view was from March lows @ 5056 into MAY's highs @ 6065:- 1,000 points


----------



## Frank D

SPI reversed down this week, as part of the 2-day reversal on the back of weakness from US markets....

Yesterday's trading was a first confirming break of the 3-day cycle since 9th April (5878)

Wednesday and Thursday  5-day low BUY patterns...

Whenever the market closes below the 3-day cycle, there is often a 2-day counter-trend move back towards the 3-day highs again.

today was day 1, reversal back into the 5-day 50% level.....

tomorrow i'm looking for a continuaton upwards towards the 3-day highs, but again that will be dependant on US markets, and where tomorrow opens....

*Bear pattern:- *opens just below 5830 tomorrow and sells off down on Friday, but i'll come to that if it begnis to play out.


----------



## Frank D

Last week we had the break of the 3-day cycles, a 2 day stall  (Wednesday/Thursday), and then on Friday a 3rd day rejection pattern as price follows the 5-day pattern lower.

This week's expectation is a rotation back towards the MAY 50% level, and today it's following the 5-day pattern lower once again.....


----------



## James Austin

anyone out there using the D.model on the FTSE100?
James


----------



## James Austin

i take the silence to be no

james


----------



## Frank D

SPI trading below the Monthly 50% levels, and this week's price action is now following the usual pattern of rotating up towards the Expiry date.

Trading stocks from March lows up into MAY and moving into cash positions, and imo it's still too early to move back into stock positions looking for another counter-trend move in the market, especially on financials.

Last week's break of the 5-day lows @ 5485 confirmed the downward move, and yesterday's moves above 5352 has confirmed the rotation up towards the 5-day highs this week...

Next Quarterly 50% level should give a clarity of the trend...


----------



## Euler

Frank D said:


> .........  but I’m going to do it in as an E-book




Frank, do you have a date when yr book will be available in E form?


----------



## Frank D

Hi Euler,

E-book is already to go...

I won't put the link up here but i'm sure you know where it is, or just P.M.

I suggest reading the book first and ask questions before taking up the 2 week free period, so you understand all the set-ups.

Also, if you do get into more advance trading set-ups and intra-day trading based on my work, you will need to eventually use the same program as me, which is Fibonacci trader (note: I don't have any affliliation with  the program or get kickbacks)

I'm sure other programs do the same, but it might be more work on your part to get things aligned.

Below is an example of what I mean... which probably means nothing to you at the moment.


cheers
Frank


----------



## Frank D

SPI drifting lower currently supported around this Week's lows (5214) and moving in the usual 44 point range rotations within the 5-day pattern.

More than happy if the SPI continues the same patterns for the next few months....

Rest of this week should be defined by Thursday's highs @ 5305, on whether it continues down towards 5204, and then lower by Friday....

 or above Thursday's highs 5305 price begins a Weekly rotation towards July's 50% level, which is the pattern i'm looking for,as the next move down in the new Quarter, where once again i'll be looking to move back into Financials looking for the next monthly swing pattern back into higher prices and exit once again.

Still expecting lower prices in 2009


----------



## Frank D

SPI heading down into Yearly lows @ 4538  probably in the next Quarter, after completing the two month counter-trend move  from March lows...

http://austindex.blogspot.com/2008/06/australian-spi-index-weekly-28th-june.html

Full analysis on Aussie market above

and US markets below.....

http://www.usindexweekly.blogspot.com/


----------



## Frank D

First day of the month and  Quarter, and yesterday was a push up into the Weekly 50% level and then a sell down.

The price action has been quiet orderly on the way down in June, but over the next few weeks we should be getting a lot of volaility back into the markets as they whipsaw around between July's lows and 50% level

 Price action over the past two days  should hopefully be the norm over the coming weeks with larger than normal ranges.


----------



## Frank D

Expectation SPI moving down into  July's lows, before any potential upswing is going to occur.

July's lows Reached:- *dilernia principle of 2-timeframe wave pattern*

*first sign *of a short-term bottom is a breakout of the 5-day highs in US markets.

2nd sign is the move back above the forward Weekly 50% level in the SPI

And then I would have a view that Market is rotating back towards July's 50% level. (3-week highs)

My view stands that we are going lower in 2008, but along the way there will be short-term  counter-trend moves within the Monthly and Quartely timeframes


*Weekly BHP Report 28th June :- "*

_"After reading the report you can see that I have a view of a short-term counter-trend move back towards the July 50% level, and then a move back down into the Yearly lows.

If the Australian Market is going to head down toward the Yearly lows, it can't happen without BHP dropping back down towards 34.00 or  even lower in the next Quarter."_

Basically it means that if there is going to be a swing down or a continuation downwards after July's 50% level is reached it won't be just the banks going down, it has to be dragged down by resource stocks also.

Especially after BHP topped out at the Yearly highs in 2008.


----------



## Frank D

“*Note*:- _Around the 100% of the Weekly lows in the 24 hour 
market has often provide major support and reversal patterns
 in the market for the current weekly timeframe.

That area of interest is around 4953_”…… *Thursday’s Report*

*Friday’s morning Report:- *

“_Yesterday completed the down move into July's lows, and around these
 lows I'm expecting a reversal pattern back towards the July 50%
 levels.

Yesterday I mentioned that once price reaches 100% of the 
Weekly timeframe (4953) in sycom there is often a reversal pattern in the
 market.

*Last night the sycom low was 4951.*

 Therefore A bullish day should continue higher from 5013 and move 
back towards 5042.

5042 is a random resistance/support zone.....

Above and expectation market is moving back towards the 5-day 50%
level 5107 :- just be a aware of any break higher from 14:35, which is
 often the case on Friday's as buying comes in"_



*Today*: pretty well played out precisely, from the lows in sycom, and the move from today’s open from 5013 (monthly lows) and back into 5042.

After most of the day trading below 5042, late buying comes after 14:35 pushing the market back towards the 5-day 50% level @ 5107.

But often as it happens, hit a double r44 range and sellers come into the market around the spiral top @ 5094.

*Weekly SPI Report tomorrow*

BTW i'm not convinced that today's lows are the lows for July just
 yet, tomorrow's Weekly report will show you why, I still need to see a 
break of the 5-day highs in US markets.


----------



## Frank D

Expectation that BHP would reverse back down from the Yearly highs and back into July's 50% level @ 40.57

July's 50% level is the trend guide for the next 3-months, and can easily move back towards the highs once again.

However as I mentioned before, I'm 'bearish' on the Aussie Index, and the only way the Aussie Index is going to continue down is with the help of BHP and other resource stocks, after any reversal up in July.

*Therefore:-* Keep an eye on any failure around 43.50 in July and a break back below the last Quarterly lows (39.54), because BHP will probably be under pressure over the next Quarter into September.

*Fundamentally BHP is in a very strong position, but the stock will be pushed around by commodity prices over the next 3 months.*


----------



## Frank D

As mentioned in last Weekend's Report....

*SPI:-* A breakout in June @ 5100 has the potential to move down
 into 4836 (July's lows) before any reversal back towards the 
July-August 50% level. (reached in Sycom)

But should be reached next Week. (chart Below)

http://austindex.blogspot.com/

~~~~~~~~~~~~~~~~~

As mentioned in the US Report:- the first sign will be lead by the US
 markets breakout of the 5-day highs, and then move above the Weekly 
50% level.

*DOW:- *July's lows reached, and now the Weekly 50% level
 has dropped below  last's weeks highs, so it won't take much for the 
US markets to begin a move UP once US markets are trading above their Weekly 50% level

http://www.usindexweekly.blogspot.com/

Chart below...

*Note:- *Still expecting lower prices in 2008 even after any reversal up from these levels


----------



## Frank D

SPI  moved down into 4836 and yesterday closed below, which puts my swing back into the monthly 50% levels open to risk.

We can see the difference between March lows and these lows, where the first pattern reversed on the dime, whilst this time it hasn’t.

Whilst below 4836, then my view is that price moving down into the yearly lows quicker than I wanted it to…

However, even though price is trading below 4836 today, it’s based on the weekly close, which means if Friday can close above 4836 then the August swing is still in place….

* Weekly report 12th July*…. 

_“I'm not expecting a major counter-trend move UP like what occurred
 in March this Year, my view is support forming around 4836 and 
remaining range bound below 5100 until the end of July, and if there is 
going to be a 'pop' upwards into the monthly 50% level, then there is more 
of a chance that higher prices would occur from August.

After a rotation into the Monthly 50% level, my view remains that the 
Aussie market is heading down into the Yearly lows @ 4538-82, which will 
be helped by Resource stocks namely BHP”_


----------



## chops_a_must

Just wondering how you got the yearly low calculation at about ~4500.

What I thought was partly your system, seems to have the bottom pivot at about 5500.


----------



## Frank D

*Premium Report*...."_DOW is in the same position as the Aussie Market 
and trading around it's July lows.

And the same expectation:- Friday close above 10837, then the 
expectation is an UPswing into August 50% level before any trend 
continues downward.

*Weekly lows support* ...first sign of added strength will be trading above the 5-day 50% level on Wednesday...."_

~~~~~~~~~~~~~~~~

US markets rising up from their Monthly and Weekly lows, with the view of 
a rotation back towards the August 50% level.

*Note:- *there is still no breakout of the 5-day highs, and price is 
still trading below the Weekly 50% level, but Wednesday's trading in 
most global markets is the usual pattern for a short-term UP swing.

~~~~~~~~~~~~~~~~~~~~~~~

Chops_a_must,

After 257 posts and you think my 'system?' is based on a bottom pivot @ 5500, then do yourself a favour and buy my book.


----------



## Frank D

_"Can banking stocks and other stocks still be traded in a bear 
market?

Yes they can, because around the Yearly lows, the expectation remains 
that stocks have found their lows for the year, but can still remain
 range bound for the current year:- between the timeframe lows and the 
50% level, before heading lower in the following Year  *(double lower
 low pattern:- Dilernia Principle)*

In ‘bull’ market stocks normally compound 12% per year, however 
the potential to make money could even be greater in a bear market than 
in a bull market, even though the trader is buying stocks in a down 
trend.

How is this possible?

In a Bull market stocks rise upwards, but don’t necessarily reverse back
 down into double monthly lows more than once a year. If banking 
stocks remain in a consolidating trading pattern in the  current year, price
 will come back down far more often, which increases the frequency 
of trading. Whilst the exit strategies are based on exiting around the
 higher timeframe 50% levels, or even using the Weekly channel highs.


Depending on the entry level this will give the trader the potential to 
take between 10-15% on stocks in each 3-month period. 

The expectation is that, in every Quarter price could move back down 
into the lows. If the trader can use this strategy every Quarter, then there is
 a potential to make around 40-50% on stocks using swing trading 
patterns and channel lows in Bear Markets, as they consolidate for the
 rest of the current Year....."_

*The Trader Trading ….. principles of successful trading….*


~~~~~~~~~~~~~~~~~~~~~~~~~~~~

As per BUYS on Banks last week....

 WBC is the first one to exit...

Entry $18.42  exit 20.95


----------



## Frank D

*DOW and SPI (Aussie) Weekly charts*

Expectation global markets would reverse off their July lows and swing
 back towards their Monthly 50% levels.

Once they get to their Monthly 50% level next week, I've factored in 
another wave down to complete the downtrend in 2008.

In the charts you can see that there is a trailing white line. This white line 
is the 3-week cycle, which often defines the trend within each Quarterly timeframe.

This cycle is important because it's going to give me a better idea on 
the speed on any reversal downward.

Basically, a failure to close above that level next Week (close of the 
month) and there is a good chance that market will begin the next 
down trend.

If Market closes above that level next Friday (close of the month), I 
still favour further weakness, but it might take until after September and
 the next Quarter to begin the downtrend.

A Friday close above the 'cycle' next Friday can attract more 
short-covering for the rest of this Quarter. How far I don't know yet until the end of the month.

So let's see where next Friday closes....

*Financials making good gains, and hopefully I'll be out of the of financials next week.*


----------



## Frank D

_"Expectation that the DOW is heading down towards the Yearly lows in 
2008, but along the way there will be  *short-term counter-trend move
 back towards their Weekly highs (from July's lows) and then continue 
down...."*_ 

*Weekly Report 12th July*

~~~~~~~~~~~~~~~~~~~~~~~~

The DOW hit its Weekly highs, and has sent prices back down confirmed with a break of support on Thursday.

But this reversal down is a normal pattern, just like around the 5-day
 highs each day, prices try push down within the current day (resistance) and then continue higher the next day.

This reversal down into the Weekly 50% level from the Weekly highs is 
just a part within the bigger picture.

Next Week's 50% level will once again be the trend guide, and I think that
 it's too early for markets to continue down in my opinion.

Even though I've modelled further weakness down in 2008, I would still like 
to see price hit the monthly 50% levels before continuing down in August.....

At this stage consolidation between July's lows and the June breakout, 
and then look for a 'pop' upwards from August back into the 50% levels.


----------



## Frank D

_I'm not expecting a major counter-trend move UP like what occurred
in March this Year, my view is support forming around 4836 and 
remaining range bound below 5100 until the end of July, and if there is 
going to be a 'pop' upwards into the monthly 50% level, then there is more 
of a chance that higher prices would occur from August.

After a rotation into the Monthly 50% level, my view remains that the 
Aussie market is heading down into the Yearly lows @ 4538-82, which will 
be helped by Resource stocks namely BHP”_ *12th July*

~~~~~~~~~~~~~~~~~~~~~~~~

I mentioned a couple of weeks ago that my view on the SPI would 
remain range bound between 5100 (June lows) and 4836 (July lows) for 
the rest of this month.

And if there is going to be a ‘*pop’* back up into the August 50% level
 it was going to begin from August, and then the next trend downwards
 to complete the 2008 lows.

With two days to go before the end of the month,  I’m struggling to see 
the market *‘poping’ *up into August 50% level from next week, but 
I can see the market down around the August lows.

*I’ll be back into financials around those August lows once again looking 
for the next 10-15% short-term counter-moves.*


----------



## Frank D

SPI closes July right in the middle of the range, where I thought it would.

Below shows the August midpoint:- starting tomorrow (red dotted)

*A set-up:- *follows my previous analysis of a POP UP towards 5251

*B set-up* and it continues down next week towards August lows.

Which way the market goes I don't know....  gut feeling says the 'POP'

But personally I want the Index to move lower so I can move back into stocks once again around August lows.

*Day Trading the SPI*:- I don't care where the market goes, just simply follow the 5-day levels and Spiral point trading :- rotation and extension.


----------



## Frank D

When BHP topped out in MAY my expectation was that BHP was going 
to rotate back down into July's fair value level @ 40.57, as per 
Premium Report from the MAY highs

At the End of June I mentioned that 40.57 was the critical level and that 
the expectation was that BHP would end up around $34.50 in August.

I was bearish on the Index, and for the index to drop it had to be helped
 by BHP.

Once July started and dropped below 40:57 the market path was 
mapped out:- Thrust pattern and extend, as per Dilernia model.

In July I was buying BHP around July’s lows, as per the Premium
 Report looking for short-term swing patterns within the Weekly timeframe.

*Two of the most critical compontents in Techincal analysis is:-  Support 
& resistance. * The Dilernia Model defined the support, the resistance 
(40.57), and the Trend lower.

I mentioned that all long positions should be exited last week, as BHP 
will begin its next wave down, and so will the SPI. (premium report).

The Support that existed in July isn't valid in August.

*Note:- it won't surprise me to see BHP around $28.00 but it might take the first Quarter in 2009 to get there.*


----------



## Frank D

*DOW and S&P*

Aussie market opens below the Monthly midpoint in August and sells 
down into the Weekly lows yesterday, drag down by Resource stocks….

Whilst US markets follow the ‘pop’ UP in August back towards their 
50% levels…

As per Weekly report some weeks ago:- a  ‘pop’ upwards at the start of August and it might take
 a couple of weeks before any new major down trend eventuates.

The important part on this 'pop' is Friday's close.


*DOW Weekly and Daily charts*
*
S&P Daily and 5-day pattern*


----------



## Frank D

*S&P Daily and 5-day pattern*

US markets continue higher following the 'pop' at the start of August and 
a higher close on Friday :- Weekly 'bar'.

This week was to follow the 5-day trading pattern set-ups, with 
the expectation of price moving back into the monthly 50% levels and 
Weekly highs on Friday.....


----------



## Frank D

*S&P Weekly and Daily Charts*


Often when markets breakout of the monthly channels they often come 
back and re-test the breakout and then continue with the overall trend.(Weekly chart left)

This is what's been happening in the US markets at the start of August, a 
re-test of the June breakout. ('pop' pattern)

There is major resistance around these upper levels, based on the
 June Breakout and also the Monthly 50% levels.

I also pointed out in the Weekly report, that for any UP trend to 
continue price would come back and re-test the Weekly 50% level, 
before any new UP trend could continue.

And this is what's happened this week (right chart)

http://usindexweekly.blogspot.com/2008/08/dow-s-weekly-report-9th-august-2008.html


Overall I'm factoring in another wave down this Quarter to bottom out 
the market in 2008, but that's going to depend how US markets react to 
this Weekly 50% level and this Friday's close....

A bullish trend should bounce off the Weekly 50% level and continue
 higher into Friday confirming the break above the 50% levels.

A failure to close out on Friday, and as per Weekly report, I would begin
 to look for continuation down probably in the last Week of this month.


----------



## Frank D

*"Any new down trend won't occur until US markets lead..... (Read US Weekly Report) , and dragged down by Financials" *

Last Week's expectation was a higher Weekly close on Friday in US 
markets, but it was how and where Friday closed was the important parameter on any new down-trend developing.

Friday couldn't close above the monthly 50% levels (resistance), and
 as pointed out in the Weekly Reports, the next down move will be 
dragged down by Financials, and financials were hit hard on Monday in
 the US...

There are still a couple short-term patterns that I want to see for any 
down trend continue:- A lower Daily close below the Weekly 50% level.
 A higher daily close but below the Weekly 50% level. 

And then the next day continuing lower:- higher daily open and 
rejection pattern away from the Weekly 50% confimed with a break of the 5-day lows.


----------



## Frank D

*S&P Daily....*

_"I'm expecting a short-term counter-trend move (higher daily close), 
which should hopefully align with the Weekly 50% level before any new 
down trend continues lower:- probably next week.

Probability pattern is to continue down into Wednesday's lows:- support

If US markets have a counter-trend UP day, then a move back towards
 the 50% level" _


Tuesday had the lower daily close below the Weekly 50% level 
and Wednesday is the higher daily close. 

Normal rejection pattern is a higher daily close and the trend selling
 down from the Weekly 50% level from a higher daily open the next day.

This could still happen on Thursday, but I'm factoring in that 
US markets could have a 2nd 'stalling day', and I would focus on Friday
 or early next week for any 'potential' down trend to continue....

Ideally a 'sell' pattern would be a two day counter-trend move or
 stalling pattern, and the trend continues down from the 3rd day:-
 verified with a break of this month's lows (4th Week sell).

If Thursday (2nd stalling day) closes back above the Weekly 50% level,
 then it's a 'hook' pattern, which doesn't favour Friday closing lower on most occassions.


----------



## Frank D

Previous posts were based on the S&P, but the same patterns appearing
 in the SPI this week..

SPI Weekly 50% level break on Tuesday,  Wednesday counter-trend 
day,  and Thursday sell pattern from the 50% level:- rejection and 
thrust pattern.

Target downside the 5-day lows:- which may or may not get down 
that low today, because statistically once the SPI travels 87 points in 
a single day it will often consolidate and move into a sideways pattern...

Which could result in short-covering the down move (consolidation)...
 or further weakness in the afternoon as it heads down towards the
 5-day lows.


----------



## Frank D

Everything about the past 3 weeks of trading set-up Friday as the 
potential continuation of the down trend in US markets

From the 'pop' upwards at the start of August, the 2nd week's failure 
to close higher on Friday above the August 50% levels, and then the 
sell pattern this week and break below the Weekly 50% level this 
week.

Even after Thursday's failure (2nd day stall) and no 'Hook' day above 
the Weekly 50% level looked like a 'text book'  Sell pattern on Friday

Friday looked to be the ideal set-up....except it moved up from support
 on Friday instead of breaking lower....

As a day-trader it doesn't really matter where the market goes:- simply trade the levels. 

But as a swing trader on stocks over weeks and months, I was hoping 
this was going to be the final drive down into 2008 lows before we finally
 get a 3 month counter move upwards.

Friday's price action at this stage only leads me to think more sideways 
price action, even though next week is the 4th Week :-  

4th Week:- last week of the month often starts the next trend, which
 leads into the continuation of the trend in the following month.


----------



## Frank D

*S&P Daily and 5-day pattern*

_"As per Weekly Report I'm bearish on markets with the expectation of 
lower prices.

What's the first sign of a reversal pattern at the start of the Week?

Price trading below the Yellow channels on Monday with the expectation of 
a lower daily close on Monday followed by another lower daily close 
on Tuesday (random length)"   *Monday Report*_

~~~~~~~~~~~~~~~~~~~~~~~

Monday:- 2-day down move confirmed with a break of support on Monday, and 4th week sell pattern playing out.

Expectation of lower prices by Tuesday, along with trading below the Weekly 50% level (resistance)

Let's see how US markets act after Tuesday's trading.

I would really like to see this week break the Weekly lows so finally we 
can get a blow off bottom on global markets before a 3-month 
counter-trend  to close  higher in the last Quarter of 2008.


----------



## Frank D

*FOREX AUD/USD....*


*First chart (Weekly):-  *When AUD hit the July highs @ .98 cents, I 
put out  the report that I was looking for a reversal pattern down into 
August lows

The exact same pattern on all currencies against the USD

On the way down it was simply a case of shorting the 3-day filter or 
50% level  (get back into the trend) with the expectation that price
was continuing down. (Dilernia Principles)


We can see in the first chart below the August Breakout and continuation
down.

Whenever there is a breakout of the monthly lows, as was the case in 
Index markets in January, price will normally go back and re-test 
the breakout in the following month (September in this case) :- verify 
the breakout and then continue down for the following two months. *(Dilernia Principle)*

*2nd Chart Daily and 5-day pattern:- *

If we subcribe to the theory of double low patterns from previous
 breakouts (dilernia Principles) :- ie breakout of the Weekly lows 
and continuing down into the 2nd week lows, then we need to keep in 
mind that the 3-day filter will eventuatlly breakout or reverse on the UPside. 

This current price action in currencies is playing the 2-timeframe
 pattern breakout pattern ( Weekly lower low), which can result a reversal 
upwards and follow the September re-test of the breakout. 

Therefore:-  The 3-day filter remains resistance but will eventually 
breakout, which will lead to a rotation back into the September 50%
 levels, and then hopefully continue back down into lower lows later this year.

This should hopefully apply to all currency spreads against the USD.


----------



## Frank D

*S&P Daily*

_"Trading below the Weekly 50% level, which could see a swing back to 
re-test the same level on Wednesday...

Yesterday's view was for a continuation down:- short the 5-day 50%
 level.

However Tuesday didn't complete the 5-day low pattern, and on 
Wednesday US markets are in a similar position as last Friday....

Rising up from support and back into the Weekly 50% level..."_


~~~~~~~~~~~~~~~~~~~~~~~~~

More sideways price action in August and the usual 2-day swing 
patterns within the Weekly timeframe. 

No probability pattern for Thursday..

The price action over the past few weeks have been ideal for intra-day
 swing traders on global index markets.

Personally I would love to see the same price action continue for a 
few weeks more.


----------



## Frank D

*AUD/USD Forex *

Two days ago I mentioned keep an eye on AUD for any reversal back 
towards the September 50% level (along with other spreads)

After completing the double weekly low pattern on Tuesday, today was
 the first sign that a continuation upwards 'could'  occur.

Break of 5-day 50% level and test and reject pattern using '*spirals'*

Long off the 5-day 50% level with matching *'Spiral point'*

@ 8638  partial exit on Spiral high @ 8675 +36 pips

moved open positions to Breakeven stop from entry and hold.

It's either going to reverse back down from .8699 and take out my stops,
 or continue higher and back towards the 5-day highs and higher next week.


----------



## Frank D

*SPI Morning Report.....*


_US markets rally and the SPI could end up back to the August 50% level
 @ 5233 by Saturday am (sycom close).

Not the price action I wanted to happen, as the 4th Week is moving
 higher and not heading down.

*Today:- 5-day highs resistance 5145-55 *

Ideal pattern is for price to come down and close the gap from yesterday's 5-day high @ 5095. (44 points).

*Today:- *After that closure  (down R44) price could reverse 
back upwards and continue higher into the 5-day highs.

*Note:- *5-day highs (5145-55) are resistance, which means price could 
remain below these highs all day and reach 5233 based on Sycom
 moving higher because US markets continue higher.

If there is a 2.50pm rally on Friday breaking the 5-day highs, then 
the expectation is price is moving back towards the August 50% levels
 on the last day of the Week & Month :- higher Friday close.

Basically don't short trade above 5155...

Random support 5095 Thursday's high_

~~~~~~~~~~~~~~~~~~~~~~~~~

*Today so far....*

First Part of Friday has completed and remaining above Thursday's 5-day highs...

Now let's see how the rest of Friday and this afternoon pans out...


----------



## Frank D

*SPI Futures and Aussie Index*

_"Ideally I want to see a completion down in this quarter to bottom out 
the markets, so we can finally get a *3-month counter-trend
 move upwards.*

4th Week:- last week of the month often starts the next trend, which
 leads into the continuation of the trend in the following month, but who 
is not to say that next Week just continues higher"....

Previous Weekly Report_

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

When certain things happen I have to acknowledge that a 
continuation downward in this Quarter might not eventuate.

Even though price is still trading below the Monthly 50% levels in
 September, This week's 4th week rally and breakout of the 3-week
 highs normally shows further strength in the new month....

Below is the SPI Weekly futures showing the 3-week cycles (White line)

Whenever price closes on the opposite side the market often reverses 
the trend.

It occurred in March and June, and now in August.

The big difference between the two previous 3-week breaks and now are:-
 I had an overall view that price was reversing from March lows and 
moving into a 2-month rally into May's highs. In June I had the view 
that markets were coming down from May's highs into a lower low pattern 
in July.

In August I don't have a view on any counter-trend move upwards.

I do have the view of a 3-month counter-trend Up move, but only if price made lower lows in august, which it hasn't.

Therefore like in April this year, expectation still remains that September
 50% level is resistance which could last for the next 2 weeks 
(more consolidation):- ideal for spiral point trading and 5-day patterns.

And if price does continue higher towards October's highs it should 
push higher in the 3rd week this month lead by US markets.

But........


----------



## Frank D

*SPI Weekly and 5-day pattern*


Expectation September 50% levels will continue to be resistance for at least
 2-weeks, and US markets reversed down from their September 50%
 levels on Tuesday.

Any robust Weekly trend will be supported by it’s 50% level within the 
5-day pattern and continue higher, on Wednesday it’s 5081.

Any robust reversal pattern within the Monthly Trend will break the 50% 
level and continue down with a bias to close lower on Friday.

If September 50% levels are going to play the resistance game, then I 
can’t see 5081 supporting the SPI for too long.  5081:- Random support..


----------



## Frank D

Lower Weekly close playing out this week :- September 50% level
 rejection.

A couple of ideal  'short' patterns using the *'open trading principles'.....*

A today's 5-day 50% level rejection pattern down....

As pointed out a couple of weeks ago in the Weekly report... I hope these consolidating weekly patterns continue for awhile yet, because they
 provide ideal 'spiral-point' trading  set-ups within the 5-day patterns.

*below 5040 and continuing down into the 5-day lows @ 4998*


----------



## Frank D

_"SPI up swing into close and trading around the 5-day 
lows... 4998

Depending on where price opens, the expectation is that this level should be
used for a continuation down on Friday :- lower Friday close...

Expectation that the SPI should continue down into a lower Friday close,
and depending on US markets a lower open further down on Monday"_

*Yesterday's Recap*

~~~~~~~~~~~~~~~~~~~~~~~~~

It's a bummer, because I was hoping that on Friday we would be 
trading down from the Thursday's lows @ 4998, and into Friday's lows 
@ 4889.

Instead we are opening below Friday's lows.

*Lower Weekly close:- * Bearish September is a Weekly close 
back below 4830, which fits in with my overall trend of the market and my earlier view of lower 
prices in this Quarter.

Or if this is a test of the 3-week cycle lows @ 4830 which often 
occurs :- *test and reject* and then continues higher (3rd week up move), as per 
previous Weekly Report :- same pattern as in April.

Simply use Friday's levels, along with Spiral filters and keep out of 
trouble...


----------



## Frank D

Bounce off Friday's lows @ 4803 and moving into a counter-trend move
 back towards 4889..

Long 4803  exit 4587 +54...

Rest of today should be defined by 4836, and move into 
shorter-term trading patterns of 20 points using other Spiral techniques.

4889 is viewed as resistance, but if trading above 4889 after 2.50pm
 there could be more short covering into the close to cover Thursday's gap.

The rest of today is an open book based on a lower Weekly close.


----------



## Frank D

*SPI continue...*

SPI has moved from Friday’s lower level @ 4803  into the higher level @ 
4889:- That pattern was a high probability pattern.

The same as 4889 being resistance at the moment:- high
 probability resistance but with a random outcome, which means it 
can reverse down and continue down another 44 points closing below, 
or breakout above.

I have modeled certain things today but I don’t know how price will travel 
or the price action within the daily timeframe will travel.

For example I exited  earlier @ 4857 and my view changed into trading 
smaller ranges using 20 points.

So How do I hop back into the trend if it’s continuing higher after 
I've exitted:- trade lower ranges and trade up from support using 
20 point lows, as it travels it's market path within the 5-day range:-
 you don't trade breakouts, as there is much less reward and a higher risk 
of being stopped out.  

You want to be in the trade before a breakout occurs.

My exact entry on another long was the Filter @ 4837, it didn’t hit 
(low 4839)

My Next trade is the Top :- *Short 4884 and exit 4868 + 16*, using
 20-23 point ranges…

Now The SPI can continue higher and breakout, but it’s not matching
 any Filter to trade longs from.

Looking at the Spiral filter, it actually favors a continuation down into an 
R44 low. 

Whether price continues down or not I don’t care, but  I can’t trade 
longs again today unless it does reverse an entire 44 points down, even if 
it breaks out above 4889 later today:- most trends continue in the last 
100 minutes of trading.


----------



## Frank D

*S&P Weekly and 5-day pattern*

As pointed out in the last weekly report:- 

Last week's sell down closing below the 3-week lows (white line) isn't a 
good sign for any uptrend to continue in US markets.

I also pointed out that the expectation was for price to move up 
into the September 50% levels and then continue down.

The speed of the move into the monthly 50% levels moved quicker 
than anticapted because of the gap open on Monday, but the same 
pattern is playing out.

And my overall view remains, move down into lower levels this quarter
 before there is a 3-month counter-trend  UP move in the next quarter.


----------



## Frank D

*S&P Weekly and 5-day pattern:*

_"Monday is all about support, and the S&P will be opening right on 
support (at this stage).

Because Sunday is the first day of the breakout of the Yellow channel, 
then Monday has an expectation that there is going to be a 2nd down day.

Often a 2nd down day aligns with the 5-day 50% level.

If this is the case, then there could be early support on US markets into the
 5-day 50% levels, but I'd be surprised to see higher prices...:- 50% 
level rejection.

Below support and it's a random length, but markets are coming down towards September's lows"_:- *Premium Report*

~~~~~~~~~~~~~~~~~~~

S&P was bang on the money on Monday.

Rising up from support and back into the 5-day 50% level, and then a continuation down on Monday, as part of the 2nd day sell.

S&P is now starting to get down to my 2008 yearly low target of 1158-73.

These levels are what I wanted to see reached before any 3-month counter-trend UP move begins, which will be verified in the next Quarter.

After any 3-month UP move in the Next Quarter, as mentioned numerous times before, *Markets will be going lower in 2009.*


----------



## Frank D

*SPI Weekly and S&P Weekly*

"_In the mean time, financials have the biggest weighting in out Index, 
and until Financials bottom out, which could be around 4000 on the 
Financial index, this puts the SPI around the lower levels of the yearly 
lows.

Today:- the SPI will be opening around the September lows @ 4701, but
 I think this week will end up around 4570."_ *September 16th Premium Report *


*SPI will be move into this week's down target @ 4570.*
*i'll be moving back into all 4 banks once the Fin Index hits 4000, hopefully this week.*

~~~~~~~~~~~~~~~~~~~~~~~

*S&P 500* completes the move down into 1158.

This was my target lows for 2008:- It matches my Yearly lows, and it's the exact same  price in the Quarterly timeframe.

Sure the market can go lower, especially with a shift in levels in the next Quarter, but at this stage we are getting close to a bottom in 2008.

The bottom will be verified once price is trading above the forward Monthly 50% level, and i'll looking for a 3-month counter-trend UP move:- Monthly step formation


----------



## Frank D

*S&P Weekly and 5-day pattern*

_"US markets have reached their Yearly and Quarterly lows, and I can't 
see too much more downside in Global markets.

Yesterday:- breakout of the Yellow channel forms a 2-day sell 
pattern.

Therefore expectation that the 5-day 50% level is resistance, and can
 push lower into Thursday's lows.

If Thursday can bounce off those lows and close higher, then 
Friday's support should be use to continue to trade upwards"_ *Yesterday's Premium Report*


*US MARKETSThursday:- *Even though US markets had reached 
their Yearly lows on Wednesday, there was still a 2-day 'sell' pattern to 
play out, pushing Thursday down into support. (chart below)

Weekly report out this week, but at this stage the 2008 lows of 
global markets have been reached, and in my opinion have completed
the downward leg for 2008.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

*SPI and XJO Weekly*:- Chart below

Yesterday the XJO hit the 2008 lows @ 4538, along with US markets
 hitting their Yearly lows:- 4538 was my down target for 2008

In my opinion global markets have hit their lows for 2008, but will 
probably flop around these lower levels over then next 3-weeks building 
a support base before any 'slow' rotation upwards in the next Quarter and
 in a Monthly step formation to *close out 2008 at higher prices than where we are today.*

The 3-month counter-trend move next Quarter will obviously confirmed 
with the October 50% level as the trend guide, (random length) and 
where *we close in 2008 will DETERMINE HOW FAR WE GO DOWN IN 2009.*


----------



## Plan B

Head back into Financials for a short run Frank? Or maybe we should just be waiting for any up trends.

Any forecasts for the XFJ?


----------



## Frank D

_"I'm BUYing banks 1 lot around September Fin Index lows @ 4197 and hold.... (exit Fair Value)

I'm BUYing banks 2nd lot around Quarterly low @ 3973-4000 on Fin Index.

*Question:- Why don't I hold off and BUY both lots around Quarterly 
lows?*

*Answer*: What happens if prices don't reach October lows but
 only reach September lows and begin a gradual rise up in the next 
Quarter into Fair Value.

Basically I want to be exposed in financials because of the view that 
prices are going to swing up into the next Quarter, before they go lower 
in 2009. "_ 

*6th September Premium report*

~~~~~~~~~~~~~~~~~~~~

To answer your Question my view is the financials are moving back into 
Fair value  in the next Quarter, but it will be a zig-zag effect which 
could take 3-months to get there:- The sooner the better.

However, unless you bought yesterday's September lows I wouldn't 
go chasing the banks today, because I have a 'gut' feeling that banks
 could still end up around 4000, as per chart below.

That my position on banks:- i'll be moving into 2nd positions on banks 
around 3973-4000, but i'm already expose from yesterday.


----------



## Frank D

As pointed out last week:-  my view were Thursday's lows in global 
markets were the lows for 2008 with the expectation that markets will begin a
 3-month counter-trend move upwards into the end of 2008..

and then continue down in 2009....

*Aussie Index Weekly Report*

http://austindex.blogspot.com/2008/09/aussie-spiindex-weekly-20th-sept-08.html

*DOW and S&P Weekly Report*

http://usindexweekly.blogspot.com/2008/09/dow-s-weekly-report-20-sept-2008.html


----------



## Frank D

*Financial Index and NAB*

Exit NAb on today's open @ 25.45

+ $6.50 33% in 3-days...


I still think financials have more legs on the upside, but next longs won't be until the next Quarter...

Moving to cash on Financials, and look for the next 15% gain in the last Quarter.

This 3rd Quarter has provided a double whammy on 15%+ swing patterns:- July's lows and September lows


----------



## Edwood

Frank D said:


> S&P is now starting to get down to my 2008 yearly low target of 1158-73.




hey Frank, saw your post re: 1158 the other day & passed it to an Elliott mate who thought S&P target low for a 1:1 move off the highs was 1134.  I think the actual low was 1133.5?  To be fair he only called that a couple of days before while yours was probably out there for quite a while beforehand.  Just thought it interesting given your views on EW as a predictive tool.  maybe he got lucky


----------



## Frank D

Edwood,

I’m sure hundreds of EW analysts called the bottom last week, and probably called the tops a few weeks ago also.

*Maybe  start a thread on EW and discuss its predictive tool components*, so next time all the other E-wavers don’t miss it. 

Invite your mate to be part of it,  so he can discuss what he actually 
did around those lows last week and how he came to the conclusion that 
it was the low for 2008, or was it just the low of a 2-3 day pattern.

Was he trading futures or buying stocks?

There would be many in this forum that would be interested why your 
mate picked the exact low using EW, but every other E-waver didn’t.

no need to reply i'll read the posts in the 'new' E-Waver Thread.

cheers
Frank


----------



## Edwood

Frank D said:


> Edwood,
> 
> I’m sure hundreds of EW analysts called the bottom last week, and probably called the tops a few weeks ago also.
> 
> cheers
> Frank




lol - yeah no doubt hundreds did.  I asked him about it, he said A=C.  Not sure what he means tho, the other EW'ers around here might?  I'll ask him if he has time to do a thread

cheers


----------



## Frank D

*Aussie Index Weekly Report*

http://austindex.blogspot.com/

*DOW and S&P Weekly Report*

http://www.usindexweekly.blogspot.com/


----------



## kotim

A = C means a one to one movement of equality with the preceeding wave of the same direction.  In other words if a market goes down one dollar from a high point and then reatraces say 50 cents, if it then goes down one more dollar from that 50 cent retracement high, then it has made a 1-1 equal movement with the previous 1 dollar movement of the same direction.

Irrespective of whether we think something is mystical in all these numbers or not, it is human nature to measure the future according to what has happened in the past, so when we measure what is happenign and we see that it is equl with what has happened in the past we tend to think that we have reached the end of the new movement.

Many CTA's and funds trade off 1-1 ratios.  Have a look in the futures markets where the professionals "trade" as distinct from invest and look how often moves reverse once they have reached equality with a move of similar size in the same direction.

Think of it as value.  If a market goes down one dollar and then turns around it means that the players int he game previously thought that a 1 dollar movement was the end of value, so it is reasonable to assume that those players who held strong hands and turned the market last time it went down one dollar will again enter the market when it goes down/up one dollar


----------



## Frank D

1:1 Ratios and your describing market geometry, which 
often provides ‘random’ probability trade set-ups for swing trading, 
and possible extended targets from previous price action :- fibonacci & Elliot Wave are examples.

Yeah I understand how future markets work and where the most logical 
swing and reversal zones are, without using geometry. 

I  use different techniques within multi-timeframes on a daily basis for Forex 
and Futures, and look for the major swing points in the market when trading
equities, and when to sit in cash using  higher timeframes techniques.

If I didn't trade stocks I wouldn't care less if the market had found it's 
lows or not. Or whether market was going to reverse upwards, 
or continue down for the rest of 2008.

All I want is volatility, and to be able to achieve my primary income each day.

I would simply stick to daytrading Forex and the SPI using 'spiral' techniques.


"‘_Spiral-Points ©’: they are dynamic support and 
resistance levels that define the direction of the market and the
 high probable expectant outcome. Spiral-points are ideal for day
 trading derivative markets; they are an excellent timing tool to get you
 in and out of the market, thereby allowing you the potential to capitalize
 on intra-day moves. Spiral-points are extremely important because 
they become ideal entry points; important because of least capital risk,
 and important because they’re closest to your initial stop loss point.  

There are a few market patterns that occur with such unbelievable 
regularity that traders must become aware of them. No one, to
 my knowledge has engaged in more in-depth research (in this area).

 (Frank Dilernia 2005 :- that’s me)"_

Below is an example of Spiral point swing trading for the Euro this week 
over a two-day pattern. 

*Each bar is 41 pips.*

All I know that is:- I have to trade as close to the spiral filter as
 possible (pink) and price will move away 41 pips.

Then it becomes ‘random’ on how far price moves away:- continues
 or reverses.

It is also obvious that a lot of the patterns are occurring over a 
24 hour period so I won’t be trading some patterns because they 
are occurring during GMT or US trading times, but most often they align with
 4-hour periods.

But regardless of when they occur, there are a number of spreads that 
are simply monitored, and once they line up during Asian trading time
* :- cha ching*

And most of the patterns are occuring with the 5-day pattern:-  Thrust
 and extend away from the 50% level, or rotate back towards the 50% 
levels.

Therefore no need to use Geometry, as most derivative markets move in very similiar patterns as just described.


----------



## kotim

Frank, who do you use for your live data, I would like to be able to trade range bars but I tried to use fibonacci trader previously with live data, but I had problems with the range data.


----------



## Frank D

*EURO 5-day pattern and Spiral filter.*

Trading below Sunday's lows:- breakout.

There is an expectation that the Euro will continue down into Monday's lows.

Trade the Spiral and *exit on the double R41 range + 65*

Two things can now happen:- continue down into Monday's lows:- random support.

Or the ideal pattern that I would like to see is, an up swing back into 
the filter and then continue down into Monday's lows completing 
the breakout pattern later today.

If Monday doesn't swing up but continues down in Monday's lows, then 
no other 'short' trades are taken around monday's lows, as there is a possibilty of buyers appearing during GMT or US trading hours.

Regardless of my view today, I have modelled a scenario but will only trade once  price meets the spiral filter and rejects away.

But I won't be trading longs today unless certain price action plays 
out, which matches a filter.

As per the Forex report this morning:- _"There is always an 
expectation that a lower Monday open will try and swing back into the
 5-day 50% level and then decide which direction Monday will go:-  
continue lower or move higher towards the 3-day filter"_


----------



## Frank D

*Euro Weekly and 5-day pattern*

_Continuation from yesterday....._

On the Weekly timeframe the expectation is that price is continuing
 down into October lows.

In the short-term, as per yesterday's report:- short coverring during 
US trading hours sending the Euro back into the 5-day 50% level:- 
rejection pattern within the monthly trend.

Now for the rest of this month and next month, it's about trading down
 into October lows, using robust patterns within the 5-day range.

Then it's about filtering the enteries using spiral techniques.

As you can see a lot can happen in 24hours, but not always they way
 we want it to happen during our own timezone.


----------



## Frank D

*SPI 5-day pattern and spiral filter...*

_"But we have levels to trade:- random support 4467.

Above 4467 and who knows how far today rises???? 
can price swing back all the way to the 5-day lows @ 4740.... it certainly could."_


*Today:- *price could swing all the way back into 4740, but along
 the way it will stall most likely around 4637, and then settle down into
 lunch time.

If there is any futher short-covering into the afternoon it's 
towards Tuesday's lows @ 4740.


~~~~~~~~~~~~~~~~~~~~~~~~~~~~

*Note:- * Back in August I said there is a potential that BHP could be around $28.00 going into 2009.

*Taken long 'partial' position on BHP @ 31.15.* (only short term swing trade exit October 50% level)

But if BHP can't hold $31.15, then in 2008 BHP could easily be around $24.70 in the last Quarter of 2008.

As mentioned 2 weeks ago in the Weekly index reports:-  if the Aussie 
Market continues down from October 50% level it's  because Resource
 stocks continue lower in the last Quarter, sending the market down into
 4232.

*Note:- last day of the month and Quarter so where price closes 
today decides on certain 'swing' parameters in the 4th Quarter when 
trading stocks.*


----------



## Frank D

*SPI 5-day pattern and Spiral filter*


SPI has completed the move into the gap and closed the breakout @ 4740....


Now the SPI can do two things after it has re-tested the breakout:-  
Price can reject and then continue down into Wednesday's lows 
tomorrow, which will be below 4400 on the SPI.  ( or open around those
 lows tomorrow.

or Price could open above the 5-day 50% level tomorrow.....

I'm enjoying the ride today, simply trade on the side of the filter inside the
 5-day pattern:- cha ching

can't get more simplier than that....


----------



## Frank D

*SPI 5-day pattern and Spiral filter:- *


_" I don't see the SPI moving above 4867 today and below 4814 it's moving down into the 5-day 50% levels:- valid support"_:- *Premium Report*.

*Today:- *SPI sold down from 4867 and into the 5-day 50% levels and now trying to reverse upwards.

Personally after today's  down move into support I don't see much more action on the SPI.  Exit and take the day off. 

~~~~~~~~~~~~~~~~~~~~~~

*BHP:- *As pointed out yesterday, any continuation upwards in October is dependant on BHP and other resource stocks.

Entry yesterday @ 31.15 and I'm 'hoping' that BHP can move back into
 $36 +  by Friday (exit price @ 36+). If this occurs it will drag the SPI
 higher in the short-term.

If BHP fails to move above 34.50 by the end of this week, then BHP
 is starting to look 'dodgy' and will drag the SPI lower from next Week.

Personally I expected BHP to reverse off yesterday's lows, but I wanted 
to see a much higher open above $33.15. If this occured then a move 
towards $36+ by friday was a higher probablity swing pattern.

Today's  higher open  but below $33.15 and it's starting to look like BHP is going to struggle to get over $34.50 by Friday.


----------



## Frank D

*SPI Daily and 5-day pattern*

I always said that once the lows @ 4836 were reached, the first 
confirming pattern of the low will be a cross over of the October 
50% level.

And we can see the October 50% level @ 4806:- trading above it 
and pushing higher into the close.

I'd give it a couple more days on the SPI to close out the trading week 
to confirm further gains in the market.

Any upside and my expectation is that October highs will resist the
 market for the next 4 weeks, and any higher moves will be in November.

Again the SPI will dance to the tune of the US, but as pointed out a 
couple of weeks ago:- monthly zig-zag with an UP bias in the last
 Quarter towards 5355.

Let's see how the market goes for the rest of October, which should 
be heavily influenced by resources stocks.


----------



## Frank D

*SPI Daily and 5-day pattern*

_"Today:- once again it's about the same level as yesterday @ 4867.

It's also a R44 spiral top, which favours a move back down into the 50% levels once again.

Therefore my view in early trading is a move into the 50% levels from 4867 and once again the 50% levels are random support":_- *Premium Report*

~~~~~~~~~~~~~~~~~~~~~~~~~

The Aussie market is currently being supported above the October 
50% level, but being dragged down by Resource stocks.

For day trading purposes, today was ideal 'spiral-point' 
rotating patterns within the 5-day range.

Once this Weekly timeframe ends on Friday it will give us a clear
 indication which way the market will go in October from next week....

 and i'm not bullish on *resource stocks in the 4th Quarter.*


There is a *'best case'* scenario for the rest of 2008, and then into lower lows in 2009. (which I have already described)

And a *'worse case' *scenario..... (which I will analyse this weekend)

*Weekly Report on the Weekend.*


----------



## Frank D

*SPI Weekly and S&P Weekly*

SPI down into the October lows, and S&P and the DOW down into their 
October lows:- 4th Quarter down move.

At this stage I can't see too much more down side in US markets in 
this month, and even though the SPI ( Aussie market) is trading 
around 'October' support, my expectation is that* Resource stocks are
 moving into November lows, *which should see the SPI lower in the 
forward month.

As Per Weekly report on US markets, any support and reversal upwards 
the expectation is that the 50% levels will still be resistance.

At this stage these down moves in global markets are orderly patterns within each 'dynamic' quarterly timeframe.


----------



## Frank D

*SPI Weekly and S&P 5-day pattern*

*SPI *has ended up down into the 4th Quarter lows faster 
than expected:- orderly pattern was to continue down in monthly 
step formation. (left chart Below)

Even if there is support around these levels there is an expectation that
 the breakout of October lows will act as resistance  and continue down 
into November lows.

This favours my view of resource stocks moving down into November, as 
part of my 4th Quarter downtrend.

The interesting part of today and what's going to support the market is
 how finanicial stocks react to their own 4th Quarter support zones on the Fin index @ 3973.


* US markets:-  *are following the 5-day patterns.  After breaking 
the yearly support zones last Friday, the bias was to continue to move 
lower in the 4th Quarter, but I'm even surprised by how US markets
 have reacted.

As pointed out, the only thing traders have at the moment is to be guided 
by the 5-day patterns each day, as every higher timeframe support zone 
has failed. (right chart below)


----------



## Frank D

*Australian Index and US Index  Weekly Reports*

11th October 2008

http://austindex.blogspot.com/

http://www.usindexweekly.blogspot.com/

*Below Energy and Financial Indexes*


Resource stocks and Financial stocks make up the largest component of 
the Australian Index. Therefore if I'm interested in trading those stocks,
 it would make much more sense to look at those individual indexes 
than making decisions based on the XJO.

Trading and analysing the Index is fine when trading Index Futures, but 
if trading certain stocks then it's better to have a look at their own index 
and see where support and resistance is when trading BHP, RIO or any of the banks.

The 'crash' pattern last week wasn't all because of Financials, 
Resource stocks dragged down by falling commodity prices were also part 
of the drop:- expected 4th Quarter drop.

Both the Resource stocks and Financial stocks are now trading around 
4th Quarter support zones. It's these support zones next week that will 
give all traders are better idea how the overall market is fairing.

Complete report read the Aussie Index Weekly report.....


----------



## Frank D

*SPI Weekly  (chart Below)*


SPI is trading around the October lows @ 4465.

Whenever there is a breakout of the Monthly lows, price can remain
 outside this level for the entire month and then continue lower in the 
new Month (November).

*This will also depend on how the SPI reacts to the 3rd Quarter lows 
as resistance around 4536.*

But if it's inside the October lows, then the bias is to move towards the
 50% level, stall, and then could actually continue higher using the 
November 50% level in the forward month.

That's going to depend on a number of factors....

If financials and resources stocks have bounced off their 4th Quarter 
lows, often there is a bias to continue towards the 3-week highs.

If that's the case, then the 3-week highs in the aussie market is
 trading around the October 50% level.

*As mentioned in the previous post, if trading certains stocks it's better to 
use their own Indexes than relying on the ASX200, when determining 
support and resistance and market direction.*

I have no idea on what the market will do for the rest of this month and
 into the end of 2008, but I have an idea what stocks 'could' do when 
they find support using dynamic quarterly timeframes.

And if these stocks follow a move back towards their own 3-week highs
 in October, it's going to drag the ASX200 higher.

*Note:- If last week was the low for 2008, I still favour lower prices in 2009*


----------



## Frank D

*S&P Daily and 5-day pattern*

This is how well we can tell if US markets are going to continue higher 
this week or not.

Lower Weekly open on Monday has a 'HOOK' pattern over the Weekly 
50% level @ 992.

Tuesday's higher open and expectation that price will pullback into 
support.

*Support is verified on Tuesday.*

Whenever there is a *HOOK & TEST* pattern in a 'bull' market price will 
normally continue upwards into Friday:- higher Weekly close.

It obvious that this is a bear market, but it's still the same pattern.

Higher timeframe:- and is still below the October lows, therefore the 5-day highs are still view as resistance.

Breaks support and......


----------



## Frank D

*BHP Weekly 2008*

Back in August I said that BHP had the potential to move down into 
$24.70 in the 4th Quarter.

This was verified with the breakout of the 3rd Quarter lows @ 31.15 on 
the last day of September.

Last Week Resource stocks dropped like a Thud and rotate back up to
 re-test the break this week, and now they have continued down into 
$24.70 following the Market Dynamics.

_IS this the low?????_

*The answer is no!!!!!! *

There could be some support around these levels this month, but keep
 in mind that i'm still looking for more weakness into November.

And whenever price breaks fair value:- $34.46..

Price moves to the extremes, which is @ $18.03

Even if there is support in Resource stocks around these levels, there
 is potential for more weakness in Movember towards $18.03


----------



## Frank D

*EUR/USD &  the Dilernia Model*

August breakout after July tops.

Expectation that price moves in a 2-timeframe wave pattern:-
 (monthly):- Dilernia Principle

That has completed around the October lows:- current support.

However, the previous month (1 timeframe) has also closed below 
September lows.

Therefore:- as a trader I would employ short-term intra-day swing 
patterns for the rest of this month with the expectation that price
 will consolidate between October lows and September low
 breakout (resistance)

Once November begins and re-tests the 50% level:- *Thrust pattern*

I would have the expectation that November will continue lower, 
but any ‘short’s should be held longer.

*Adjust trading style from current month into next month.*


----------



## Frank D

*RIO TINTO  & Dilernia Model*


Resource stocks moved down into their 4th Quarter lows last week, with 
both BHP and RIO completing and hitting major support zones in the 4th Quarter.

Ideal pattern would be to see RIO move back towards November 50% level.

I have modeled further weakness in the following Month:- 50% rejection.

In down trends ideal exit zones are the Weekly 50% level.

Depending on position size:- partial entry strategies and partial
exit strategies

Today’s close was a partial exit strategy.

BHP as per Friday report hit major support also around 4th Quarter lows, and same strategy should 
be applied.


----------



## Frank D

*SPI Daily and 5-day pattern*

This week has been text book patterns:-  Lower Weekly open and 
2-day counter-trend move back into the Weekly 50% level @ 4340, a
 break of the 5-day 50% level @ 4226 yesterday and a rotation back 
into down the lows.


_A *Weekly 50% level rejection@ 4340 *
and price below the 5-day 50% level today isn't a good sign....price can  
*reverse the entire length of the3-day range, and 
move back down and re-test the 3-day lows, which currently are 3992.*_

Wednesday morning Report


~~~~~~~~~~~~~~~~~~~~~

*Thursday morning report....*

2 patterns can play out for the rest of this week:-*Support 3980  Resistance 4085*

_1. A reversal into the 3-day lows can continue higher, which means a 2-day UP move into Friday.

This is because price has retested the 3-day lows and has verified
 last Week's support :- 3980.

Even though 4085 is a random resistance zone today, it would not
 surprise me to see even further buying into the close after 3pm back 
into the 5-day 50% level.

2. Yesterday was the first day reversal and normally there
 is a 2-day reversal.

If price is trading below 3980, then it's following the Weekly rejection 
pattern and continuing down into the Weekly lows._

So far 3980 has held and whilst price is above 3980 the view is for 
a continuation towards 4085.

Below 3980  and it's following price down into the Weekly lows.


----------



## Frank D

_"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_"*   11th October Weekly Report*

*DOW Daily and 5-day pattern*

And the same patterns appear...gets to high in the 5-day range they push it down confirmed with a break of support.

5-day 50% level pushes price down into the 5-day lows, 'support', and they BUY it up:- rotate....extend....rotate.

Should be another Week of this same price action until November begins, when move back inside the Monthly Timeframe.


----------



## Frank D

_Where is the Weekly close on Friday going to occur?

Near the middle of the 5-day range or on it's lows?


The important levels for trading along with the spiral filters are:-  4051 (random resistance)

Support disappears and the market is moving down towards the lower levels :- 3921_ *Morning Report*

*SPI Daily and the 5-day pattern

This morning has seen a rally into 4051 and resistance, and at this stage SPI looks be heading down into a lower Weekly close*

Test and reject and follows the 5-day pattern lower:- 3921.


----------



## Frank D

*SPI 5-day pattern*

SPI completes the move from 4051 and into 3921:- random support.

Whilst price is trading above 3921 and 3pm, the expectation is that the
 SPI will have short covering into the close.

Even though it's bounced I would like to see it re-test 3921 to verify it (double bottom intra-day)

*3pm short covering*:- The most logical price action would be to remain below 3980 (yesterday's lows).

*Extreme short covering today*:- and it could end up back into 4051 
and higher. Less likely but i've seen it happen. 

Not is a forgone conlcusion:- trading below 3921 and it moves into the 
 5-day lows @ 3883.


----------



## Frank D

*SPI 5-day pattern*

double bottom intra-day @ 3921 didn't hold and now price is moved into the
 5-day lows @ 3883

My hunch the SPI is following the Weekly rejection pattern this week 
and moving down into the Weekly lows @ 3816-19.

*Weekly Rejection*:- 2-day counter-trend move into the Weekly 
50% level and lower Weekly close on Friday down into the Weekly lows.


----------



## Frank D

*Weekly Reports:- Aussie Index*

http://austindex.blogspot.com/

*Weekly Reports:- DOW and S&P*

http://www.usindexweekly.blogspot.com/


*S&P Daily and 5-day ( chart Below)*

Same patterns continue within the 5-day pattern:- rotate..extend...rotate

Next Week:-  lower Weekly open look for a 2-3 day counter-trend UP towards the Weekly 50% level.


----------



## Frank D

*SPI Weekly and 5-day pattern*

_"October low breakout and expectation that the SPI is heading down
 into November lows.

Today is all about 3852..

Below and the SPI is moving down into the Weekly lows @ 4703

Friday:- 5-day pattern breakout @ 4883"_


----------



## Frank D

*SPI Monthly and Weekly*

Breakout of October lows and SPI continues down towards the Weekly
 lows @ 3703

Ideal pattern would be for the SPI to find some support around the 
Weekly lows today, and then look for the first sign of a counter-trend 
move from Wednesday back towards the Weekly 50% level.

This will only occur if US market lead, but the first sign will be price 
trading above Monday's highs.

This scenario will lead a swing back towards the November 50% level, 
which will also drag the November lows higher by Next week.

The Trend guide for next month will be simply defined by the Monthly
 50% level, with the potential to continue down into November lows.

*Note:-* there is a breakout of October lows, a retest and reject
 pattern of the break:- This often leads to a push down into the next
 Months lows:- thrust pattern and continuation of the trend.

Therefore even if there is a counter-trend move later this week, there is still
 the expectation of price moving down into November's lows.

If this week continues down (below 3703) then already we can see how far November can continue to go next month (3484)......


----------



## Frank D

*SPI Weekly and Spiral filter*

SPI didn't hit the Weekly lows precisely, but with 2.50pm 
short-covering coming into the market and pushing the market back 
towards Monday's highs....

In my opinion it sets up a rotation back towards the Weekly 50%
 level.

Now whether US markets do the same on Tuesday, and we open much
 higher tomorrow, or not....

3852  was my Weekly bais on Monday and will remain my trend bias for this
 5-day pattern.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Tuesday:- Text book patterns with today's rally back into the Weekly 50% level


Early resistance around the 5-day 50% level, and then once above the 5-day 50% level in afternoon trading.....*the only way was UP*


_"In my opinion US markets are looking to rotate back towards the
 Weekly 50% level on Tuesday.

Ideal pattern would be to rise upwards from Yellow support and break
 the 5-day 50% level.

Note:- the 5-day 50% level is still seen as resistance.

If price hasn't tested Yellow support on Tuesday, *price could still 
come down as a 5-day 50% rejection pattern, and then have a late 
short-covering rally into the close.*

Above the 5-day 50% level shorting is open to Risk:- *Weekly 50% 
level rotation*_


----------



## Frank D

*DOW Weekly and 5-day pattern*

DOW 'Hook' over the Weekly 50% level:- test and 
support

This often leads to a push towards the Weekly highs:- Friday

Especially in Bull trends or above the monthly 50% level. Which is neither at the moment.

However if using the 5-day pattern:- then the trading range is 
Thursday's highs and trade on the side of support for day traders.

_In Down trends:- _ 5-day highs are ideal shorting zones.

_In reversal trends_:- rotation back towards higher timeframe 50% levels, 5-day highs are less so:- random resistance.

They can be resistance for the day, but they shift higher each day.

*Simply don't short trade above them.*

~~~~~~~~~~~~~~~~~~~~~

*SPI Weekly and 5-day pattern*

SPI lagging, but after yesterday's downside gap fill and price trading above3888 today, it should reach 4140 (Weekly 50%) by tomorrow, which
 matches Friday's highs.

*Note:- *Any continuation higher this week (lower Weekly open
 rising into a higher Weekly close:- Friday)  should align with the
 November 50% level next week to get a better idea on any further 
downside in the next month

*Weekly Report on the Weekend*


----------



## Frank D

*Weekly Index & Forex Reports out now...*

Australian Index (SPI) Futures

http://austindex.blogspot.com/


DOW and S&P Index Futures

http://usindexweekly.blogspot.com/


----------



## Pairs Trader

The core idealogy of this method, reversion to the mean is similar to market profile. I think the best opportunities come at the outer edges with extreme sentiment readings, the rest is just noise imo.


----------



## Frank D

Pairs,

I was trading and using market profile back in 93, so I’m qualified to comment.

*Market Profile* is based on *Volume and distribution of price over time*, it has nothing to do with *Time*, as part of its core ideology.

Market profile traders don’t know when the next *distribution of volume over time *will take place until after it takes place, and then the trader will use this distribution as support or resistance, or swing trade back to the same distribution levels from extremes.


*Market profile* is not a dynamic method, it’s a developing method that misses many ‘key’ components of technical analysis. Market profile won’t tell you where the next *distribution of volume *will take place until it has taken place

A Trader who uses Market Profile as a tool will use this *distribution of volume to finally define support and resistance*, and then the trader will mostly likely use these distribution levels to trade away from.


If the same trader is swing trading back towards the *distribution levels *then the trader is using different components to make those decisions, which are completely independent of market profile.

Personally I’m not a fan of market profile, but it can be beneficial to the ‘screen trader’ as an add on tool:- market profile is not a methodology.

Elliot wave is a methodology. Gann is a methodology. Mine is a methodology. *Market profile is a Tool.*


In saying that, I did mention it in my first book back in 2003, market profile did allow me to understand the concept of rotating back into central zones:- reversion.

And I also mentioned in the same paragraph, that Market profile fails as a stand alone method because it was marketed as a ‘day-trading’ tool, when the market doesn’t consist of 1 day’s trading, it consists of a number of days, weeks, months, and so on.


The best ‘short-term’ opportunities for *swing-traders *will always occur from the extreme.

The best  ‘short-term’ opportunities for *momentum-traders* will always occur from the central zone as they trade with the trend.

The best medium-term and long opportunities will always occur from central zones as thrust patterns as price continues with the trend:- trade from the central zones outward to the extreme:- trading with the trend.

Most believe that trading 'breakouts' is the essence of capturing new trends. I beleive that the trader should already be in the trend before the breakout occurs:- *central zone thrust patterns*

That trend will then depend on the timeframe the trader is trading.

Never discount the two:- *swing trading *makes money, *momentum trading* makes money.

Both will make more money than each other when the market is moving in a trend or consolidating after a trend. *They are dependant on market conditions.*

And what your own preconceived ideas are about  ‘*noise’, is what the majority of day-traders are trading.*

*Noise:- bring it on!!!!*


If you think that the best opportunties come from outer edges, then your missing a big chunk of the market to push your own barrel (pair trading).

You should know that the best opportunities come when the market presents a ‘new’ trend and you hold that trend as long as possible.


----------



## MRC & Co

Some good insight there Frank.

While I am not qualified to comment on market profile, I have heard it was more of a fad in Europe years back and is now barely used by professional traders..........

I trade intraday and trade that 'noise', but then again, the currents always start somewhere, so a lot of the time you are simply scalping larger trends in smaller timeframes, just trying to figure out which way the 'paper' is going


----------



## Frank D

MRC,

Noise is what most day-traders spend trading. Within that noise we’re 
trading probability patterns using a multitude of different 
techniques, indicators or systems.

 I think there are better tools to use than Market profile because I 
personally don’t look at volume. Someone who looks at volume and acts 
on volume might use Market Profile to great effect.

But it’s still imperative to understand what’s going on in the 
larger timeframes, because it *allows the trader to know when to hold, 
when to fold, and when to sit out.*

Yesterday is a perfect example on *higher timeframe patterns on the SPI (Charts below)*

Last Week in the US, there was a *Hook pattern over the Weekly 
50% level, *and then the trend bias was to continue higher into Friday. 
So for the day trader it’s best to minimize trading on the short side or
 have smaller profit targets, and look for trades on the long side.

Yesterday on the SPI price finally moved above the *Weekly 50% level
 @ 4086*, whereas the Weekly 50% level in previous weeks were
much higher. 

Once above 4086 the trend bias was to rotate back towards the Monthly
 mid-points , which is what I thought would happen early in November.

I’ve also modeled further weakness in November down into the low 
after these rotations into the Monthly 50% levels occur, but price won’t 
just drop down like in the previous months because of the Weekly 50% 
level;- it needs to unwind.

However there is a *breakout of the 5-day highs on Monday @ 4153.*

A Breakout of a 5-day high range can lead to further gains (especially in
 bull trends or above Monthly 50% levels pushing the market up towards
 4315. 

But……

A Reversal into the Monthly 50% levels (balance-point) and below 4153, 
can lead to a slow unwind, with price rotating back into the 5-day 50%
 levels.

Therefore I already know how I should be trading for the rest of the
 week. 

Hit the market when my set-up matches the price action within the 
higher timeframes, based on price trading either side of 4153 on Tuesday. 

And minimise risk if my set-up triggers against the trend. I’ll probably 
still trade but I’ll take quick profits of 10-20 points if I don't get stopped
 out.

It’s a hard concept to understand, but *price is always rotating and extending based on Time.*

Have a look at the 5-day patterns in the S&P and DOW, as an example.

And currently in the SPI it’s rotating back towards the Monthly mid-points
(November), and if it's below 4153 today, then price trying to rotate
 back towards the 5-day 50% levels.

Personally I like to give myself *two analytical views of the market 
each day based on rotation and extension,* so I know how I should 
be trading if price is moving in either direction based on certain levels 
within the market

*This allows me to know when to hold, when to fold, or when to sit out.*


----------



## Frank D

*SPI Monthly and 5-day pattern*

Today completes the rotation back into the Monthly 50% levels.

Because of the breakout of the October's lows:- normal pattern is to 
rotate back into the 50% levels and then continue down with the trend.

I have modelled another down move into November's lows, but at this 
stage any down move won't occur until after the end of this Week's trading.

Basically any down trend would need to have a Friday close below
 the Monthly 50% levels and then continue down from a higher Weekly 
open the following Week and begin to slowly unwind.

If the next two days continue higher and the SPI closes above the 
Monthly 50% levels on Friday, then any down move into November's lows
will probably not occur.

*As per my 11th October post*:- _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, and
 a higher 4th Quarter close."_


----------



## Frank D

*SPI Weekly and 5-day pattern*

Yesterday completed the reversal back into the November 50% 
levels @ 4315,  and the reversal down from the 5-day highs @ 4360. 

The first sign of a reversal is when there is a break of the 5-day 50% 
level:- 4208 (today)

*A bullish trend *would have bounced off 4208 and moved back above
 towards 4263 and higher:- gap closure

An unwinding pattern of any reversal is how price reacts to the 5-day 50% level, and that wasn't a good sign today.

However, as long as the SPI remains above 4173 tomorrow then this weekly 
pattern will consolidate.

Below 4173 tomorrow, and things are starting to unwind.

At this stage price didn't react as if it was bullish, but doesn't mean it 
can't go higher tomorrow.

*Note:- *As previously stated, a close below 4315 this week and I'd 
be leaning to more weakness next week :- higher Weekly open and 
selling down from the monthly 50% level

This will align with Wednesday's 'gap' close (possibly tomorrow) and then 
look for any 'selling' patterns next week.


----------



## Frank D

*Financial Index*

As mentioned two weeks ago:- October low breakout will probably
 continue down into November's lows for banking stocks.

Dilernia Model:- test and reject pattern of November's 50% level

Banking stocks draging down the market, and any support in November
 is likely to come around the November lows.

_But does it mean that it's the low for the banks?_

Probably not:- as expectation is to make lower lows into 2009, which 
won't be determined until the closing price of 2008.


----------



## Frank D

*DOW Monthly and 5-day pattern*

The current view of global markets has been the re-test of the 
November 50% levels and then the 'thrust-rejection' pattern towards 
the November's lows.

This is the pattern which is now occuring, along with the break of 
Monday's support and then continuation down into Tuesday's lows.

The first two days is normal 2-day pattern:- 50% level towards the 
5-day lows.

Now it gets interesting.....

*Wednesday*:- above the blue filter and it normally attracts 
buyers pushing the market back towards Wednesday's highs:- short 
term counter-trend move.

Below 8698 and things start to get ugly this week, which will probably lead 
to a 5-day breakout and the completion of the November lows probably
 by next week.


----------



## Frank D

*DOW Monthly and 5-day pattern*

Wednesday ends up ugly, with the push down from 8698 when the US 
day session opens, and never looked back.

5-day breakout (Wednesday) resulting in an extended move down
 towards Thursday's lows,  and should be reaching the November lows
 shortly.

*Note:- * I mentioned back on the 11th October that this pattern 
would play out. I also mentioned that once this pattern has occurred, it 
will be a major swing point that could finally see a 'larger' counter-trend 
move upwards.

A larger counter-trend move upwards will still result in lower lows in 
2009, because the market will still go lower next year.


Therefore it's imperative that these November lows in global markets
 'hold' support and we see some buying support in the last week of
 this month.

*Buying support*:- lower Weekly open rising upwards from
 November's lows in the last Week of the month, and then pushing
 higher from the December's 'balance point':- counter-trend move.

This will result in global markets re-testing the 2008 yearly low 
breakouts, and then rejecting down towards new 2009 dynamic lows
 next year.

Otherwise another Monthly breakout means another dynamic push down
 in December, which pushes 2009 lows even lower...


----------



## Frank D

*Financial Index *

Financial Index completes the move down into November's lows.

Any bounce off this level and  I have a feeling that the financial Index
 is actually going to continue down into December lows:- 2 timeframe
 wave pattern.

This is also based on the 4th Quarter breakout @ 3973.

If that's the case then Aussie Index is going to struggle to continue higher 
in December.  

The potential of support in November is there, but there is another
 high probability pattern of a continuation down in December.

Two reasons why.....

October low breakout moves in a 2-timeframe wave pattern 
(*Dilernia Principle*), but more importantly it's a Quarterly 
breakout which is going to try it's best to cap the Financials for the rest of 2009.

Expectation that November lows should support the financials.
*
Worse case scenario is......*

November just continues lower without support and ends up closing 
below 3625.

That's extremely bad for financials, as it's the same pattern that occurred
 in global index markets with the breakout of the October lows and the 
free fall in the market.

An orderly pattern would be step formation downward:- November 
supports the market and then continues down in December.

*A worse case pattern would be a breakout of November's lows....Ouch.*

*Even though the expectation of lower prices in 2009, a breakout
 of November's lows and Finanicals are going to continue down far more
 than most expected they would.*


----------



## Frank D

*SPI Weekly and DOW 5-day pattern*


Market's reversing down into the Weekly lows, and will probably continue down into November's lows.

*But what about a 'short-covering' Rally tomorrow?*

That will depend on US markets having an UP day on Thursday.

*Why would US markets have an UP day on Thursday?*

Look at the DOW 5-day pattern (chart below).

Yesterday's view was that if price was below the blue filters it would result 
in a 5-day range breakout.

*So what happens on a breakout?*

Often price will come back and test the breakout before it continues down once again.

Therefore my ideal pattern in US markets is to push down on Thursday in 
the 5-day lows, and then reverse upwards late in the day to close near the
 5-day 50% level:- *Higher daily close*

What I don't want to see is a rally on open into the 5-day 50% level
 and then a sell off back down into Thursday's lows:- not a good sign.

My ideal scenario of an UP day is:-  this will hopefully see a higher open
 on Financials, and hopefully a move back towards their 3-day highs tomorrow.

The 3-day 50% level tomorrow should hopefully be a good idea of a
 daily trend tomorrow.

Wishful thinking maybe, but if the SPI is opening above 3825 tomorrow, 
then there is a good chance that some 'gap' closing is going to
 occur:- *rotation back towards next week's 50% level, and then
 continue down into next Week's weekly lows, which match the
 November lows*.

*Lower Daily close in the US and won't be a good sign for Financials, 
and markets will continue down into November's lows.*


----------



## Frank D

*DOW Weekly and 5-day pattern*

Thursday:- push down into Support and  the 'Reversal UP' day played
 out precisely in US markets with a 500 point turn around.

And the SPI Should be opening around 3825 today.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Yesterday I said that *3825* was critical on any short-covering rally to 
close the higher gaps.

today's higher open  based on the US rally has closed the gaps, and
 price has pushed back down into support:- *3830-25*

As long as the SPI remains above this level after 2:50pm, then 
short-covering rally could see the SPI move back towards  *4050.*

*Below 3825* and there won't be any Friday rally, and the SPI will probably be moving down towards next Week's weekly lows
 (November's lows), which is what I think the market is going to do anyway.

What I would like to see the market do is, rally into the Weekly 50%
 levels (4050+), and then reverse back down next week.

*Note*:- it's imperative that the SPI begins to move above the 5-day 
50% level @ 3904, because at this stage Friday simply looks like a 
stalling day between the 5-day 50% level and the current support @ 
3830-25.

Waiting for any leads from the US markets on Friday, and getting no friends from the Financials today.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI breaks 3825, resulting in no short-covering rally on Friday, and 
will probably end up around 3584 next week.


Text book pattern was to have a rotation back into the Weekly 
50% level and then 'reject' downwards next week....


But I don't think that's going to happen, as the larger timeframe cycles 
are pushing the market down lead by Financial Stocks.


----------



## Frank D

*Aussie Index Weekly Report*


http://austindex.blogspot.com/

November's low should be reached next week for a short-term 
counter-trend rally.

But not 'the' major counter-trend rally just yet.

That should come in December:- *Full analysis click above link.*


----------



## Frank D

*SPI Weekly*

SPI completes my move down in November @ 5559 (for this week only).

My expectation is that the SPI will swing back towards the Weekly 50% 
level over the next 3 days:- higher Weekly close.

*But only if US markets rise upwards on Tuesday, back towards their own Weekly 50% levels*.

Any reversal now is dependant on US markets, which are nowhere near 
their November lows.


----------



## Frank D

*DOW Weekly and 5-day pattern*

Expectation of further weakness on US markets into the Weekly lows, but 
on Tuesday I was looking for an UP day, that would benefit the Australian Market over the next 3 days.

There was early support and a rally on Tuesday, but then price drifted 
back down into support. 

Even though support has held, I would have liked a far more robust UP
 day on Tuesday with price closing on it's highs.

I'm still looking for a short-term counter-trend move upwards on the SPI 
this week, before it continues down into December's lows, but as pointed 
out last week, there are no friends in financials after the 4th Quarter breakout.


----------



## Frank D

*DOW Weekly and 5-day pattern*

That's better, late buying on futures sent US markets higher into the close.

Let's see how the SPI reacts today.


----------



## Frank D

*SPI Weekly and %-day pattern*

The 3-day UP move was based on 3568...

Whilst above this level the expectation was a move back towards the 
5-day 50% level.

Basically a 3-day UP move had to continue upwards from Wednesday 
and remain above 3568.

Below 3568 and then view is to move back down into 3520.

*3520 is random support*, which means that it can support the 
market for a period during the day,  if the SPI is trading above it @ 3pm, will 
often see short-covering into the close.

However below 3520, and it won't surprise me to see the SPI continue
 down towards 3471 and even lower.


----------



## Frank D

*S&P Weekly and 5-day pattern*

US markets continue down towards their Monthly lows, with the 
expectation of further weakness down into December's lows.

I would have liked a short-term bounce  on the Aussie market this 
week, back into the Weekly 50% level before it continued down 
into December's lows....

But with Resource stocks breaking the 4th Quarter lows yesterday, 
and Financials currently in a breakout and heading down into 
December's lows....

Hard to see any reversals in the market until the end of this month to get 
a gauge on how far the possibility of  markets continuing down in 
December.

There will always be 3-5 day up moves within each monthy timeframe,
 but the next major rotation upwards won't be until late december, 
(double Monthly lows) and early January 2009, as markets head back towards
 the Yearly breakouts around 4,200, as per last Week's Weekly report.


----------



## Frank D

*Weekly Index & Forex Reports out now...*

Australian Index (SPI) Futures

http://austindex.blogspot.com/


DOW and S&P Index Futures

http://usindexweekly.blogspot.com/


----------



## Frank D

*DOW Weekly and 5-day pattern*


Good sign in the short-term for US markets, bounce off November lows and
a daily close above the Weekly 50% level on Monday.

There has been some selling appearing around Monday's highs, but as
 the Monday's report suggested, a Daily 'HOOK' above the Weekly 50%
 level along with November lows could see higher prices into Friday, as
 US markets rotate back towards their December 50% levels starting 
next week.

It's imperative that Monday closes above the Weekly 50% level, and 
Tuesday moves higher if any 5-day reversal pattern is going to continue this Week:- remain above Tuesday's support.


_"November's lows:- current support  & at this stage there is *no 
Monthly low breakout*, and with 1 week left on this month, there is 
a possibility that US markets could begin to rotate back upwards towards
 the December balance point next week.

But first any rotation upwards would need to move back towards the 
*Weekly 50% level, and then 'HOOK' above*, which often leads to a
 higher Weekly close by Friday"_


----------



## Frank D

*DOW Monthly, Weekly, and 5-day pattern*


US markets reversing upwards this week with number of probability 
patterns playing out using the *Dilernia model and Principles.*

*November lows support*, and last week reversal back towards 
the December 50% level.

*Daily Hook pattern* above the *Weekly 50% level* on 
Monday:- probability pattern of a *higher close by Friday.*

Both those pattern lend each other, as they match the Monthly 
timeframe support and rotation.

*5-day pattern*:- simply trade on the side of support and price 
follows the 5-day pattern higher, which began on Monday and has 
continued higher on Wednesday.

*So far the 4th Quarter has traded under precise patterns of rotation
 and extension within multi-timeframes*


----------



## Frank D

*Financial Index (left) and SPI Weekly (right)*

I've been bullish on US markets but I haven't mentioned much about 
the Aussie market this week.

Any rises in the Aussie market is mainly due to US markets rising 
higher, but there is a lack of follow through here 

In fact the SPI has struggled get over the Weekly 50% level for the past
 3-days (right chart).

*
And that's because of the Financial Index (left Chart)*

The Financial Index has a November low breakout, which will struggle to
 rise higher during this month.

It's the same pattern as October.

Tomorrow is the last day of the month and the resistance will disappear, 
so there is a potential of prices to rise slightly higher early next week.

But regardless of any rises, expectation that Financials will follow the 
same pattern as this month and continue down into December's lows.


----------



## Frank D

*Weekly Index & Forex Reports out now...*

Australian Index (SPI) Futures

http://austindex.blogspot.com/


DOW and S&P Index Futures

http://usindexweekly.blogspot.com/


----------



## Frank D

*S&P Weekly and 5-day pattern*

Last Week’s view was that there were higher prices into Friday,  as
 prices bounced off November lows.

As pointed out in the Weekly report, expectation of a 2-day reversal from 
a higher Weekly open this week:- random length.

Monday’s sell-off  (Support) and continuation down breaking the 5-day 
lows, and this pattern is following my view of  global markets making 
lower lows in December....


----------



## Frank D

*DOW Weekly and 5-day pattern*

I've been bearish on this week on global markets, based on the higher Weekly open and 2-day reversal pattern.

Tuesday 5-day 50% level rejection pattern didn't follow through into the lows.

And now Wednesday's price action in the US has once again resulted in a Daily HOOK bar over the Weekly 50% level.

*Price Action bias is to continue higher into Friday.*


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI consolidating Weekly 5-day pattern....

Along with the rotation of the *SPI's Primary range of 87 points *over these past 
5-days

Weekly 50% level drops down next week from 3723 to 3506.....


----------



## Frank D

*Weekly Global Index Reports out now...*


*Have we finally reversed the down trend in 2008, and begin a reversal upwards next week????....... *

click & read the Weekly reports below

Australian Index (SPI) Futures

http://austindex.blogspot.com/


DOW and S&P Index Futures

http://usindexweekly.blogspot.com/


----------



## Frank D

*SPI Monthly and Weekly*

As per Weekly Report, expectation that global markets will be moving
 towards their 3-week highs this week.

These 3-week highs are often major resistance zones in any trend, and 
there is a possibility that prices can stall and continue with the trend. (DOWN)

However, as pointed out in the Weekly report and for a number of 
weeks....

*Expectation that global markets should move upwards in December-January to retest the 2008 yearly breakouts.*

Therefore around these highs @ 3770 can resist price for a number of 
days, but I'm expecting the SPI to continue to move towards the 
December 50% level and then continue higher in early January.


----------



## Frank D

*SPI Monthly and Weekly (24 hours)*

As we can see, the SPI hit the 3-week highs overnight and the market 
was driven down by sellers hitting the Financials today 

Sellers also hit the Weekly highs in the US markets late on Monday once they were reached.


These 3-week highs are robust resistance zones and price can
 easily continue down towards December's lows, as it follows the 
double Monthly low pattern:- *SET UP A.*

*SET UP B*:- is what I think will happen

The SPI to consolidate below the 3-week highs until it gets closer to
 Friday, and if Price is trading around the Weekly highs (not below the 
Weekly 50% ) there is a possibility of a breakout (Friday close) and
 then beginning of the move towards December 50% level @ 4051.

Expectation that December 50% level will stall the market, but then 
continue higher in January after a 2-3 week consolidation:- rise upwards
 from the Janaury 50% level.

*This higher move in January will rotate back to the new 1st Quarter
 50% level in 2009.*

This also matches the breakout of the 2008 lows :- retest the break.

Two important patterns in *SET-UP B are* :- the retest of the
*Primary breakout in 2008 (Yearly), *but also the alignment of 
the *'Thrust pattern' in the secondary timeframe (Quarterly) , resulting in 
a new down trend in 2009.*


----------



## Frank D

*SPI Weekly and CBA Monthly*


SPI has been consolidating for the past 3 weeks, including these past 4 days.

Higher daily opens followed by lower Daily closes, and lower Daily opens followed by higher daily closes.

At this stage the SPI isn’t anywhere near 3770, and the only way the SPI 
is going to get that high this week is to see a rally on US markets 
on Thursday (not break support)

US markets have hit their 3-week highs and have slowly drifted back 
down.

And depending on where the SPI opens it could be a lower Daily open 
with the bias to rise upwards into Friday (as long as it's above the Weekly 50%)

Our market has been dragged down by Financials, and the only way the
 SPI is going to rotate UP towards 4051 in December is to see Financials
 find support around their December lows this week, and begin to 
rise upwards from next week. 

*At this stage on global Markets SET-UP A is still in play*


----------



## Frank D

*SPI Weekly and 5-day pattern*


_"Consolidating Weekly pattern, and if we follow the price action over
 the past 3 weeks of UP and DOWN days, then the expectation is that
 Friday will close higher than the open.

But only if it's trading above 3522.

Lower Daily open can see a push down 22 points before price begins 
to rotate upwards once again :- 5-day 50% level @ 3578"_


SPI completes the move into the 5-day 50% level, and at this stage 3578 is random resistance and Friday's looks to follow the same pattern of a higher daily close.

Above 3591 after 3pm could see more buying into the close, but at this stage The SPI has played out the price action precisely.


----------



## Frank D

*Weekly Global Index Reports out now...*

click & read the Weekly reports below

Australian Index (SPI) Futures

http://austindex.blogspot.com/


DOW and S&P Index Futures

http://usindexweekly.blogspot.com/


----------



## Frank D

*EUR/USD Monthly and Weekly *

These are the same patterns that I’m looking for to occur in Index 
Markets, but it’s obvious that the ‘fundamentals’ behind these moves
 in currencies are driven by the US FED cutting rates.

Once Euro starts cutting rates it will reverse the trend.


Trend support above the Weekly 50% level and breakout of the Weekly
 highs (3-week)

In this instance resulting in a Friday close above the December 50% level 
and continuation of the move up towards the December highs.

The important part is the rotation back towards the next Quarterly 50% 
level in the first Quarter.

Maybe with today's rate cut, the same patterns begin to unfold in 
global Index markets, even though the Fundamentals of those markets
 aren’t the same as currencies.

This is a pure technical move that I think needs to happen before the
 down trend continues lower in 2009.


----------



## Frank D

*SPI Monthly and Weekly*

SPI more consolidation this week......

Make no mistake about it the SPI will end up around those lower levels in 
2009, and probably lower :- *SET UP A*

However I’m still looking for the move upwards into the First Quarterly 
50% level before any new down trend continues:- *SET UP B*

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 recently was the October breakout and then the rotation back into 
the November 50% level, and then Drive down into lower lows in November.

The down trend in the 4th Quarter ceased once price moved back 
above the Weekly 50% level, and has now moved in a tight 3-week
 sideways pattern, which eventually will breakout of.

As mentioned before, any up-trend won’t occur until there is a breakout 
of the 3-week highs.

Next Week gets interesting on the SPI as there is a divergence of the 
Weekly timeframes and a shift in resistance from above to below (brown).

Resistance drops, therefore the downtrend can continue lower next week
 if trading below 3526, which is part of the bigger picture:- *SET UP A*

But it also can be the spring board for the rotation upwards, which is 
what I’m looking to happen and complete the retest of the breakout and 
the rotation back into the higher timeframe central zones: SET UP B


----------



## barney

Frank D said:


> *SPI Monthly and Weekly*
> 
> SPI more consolidation this week......
> 
> Make no mistake about it the SPI will end up around those lower levels in
> 2009, and probably lower :- *SET UP A*
> 
> However I’m still looking for the move upwards into the First Quarterly
> 50% level before any new down trend continues:- *SET UP B*
> 
> 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 recently was the October breakout and then the rotation back into
> the November 50% level, and then Drive down into lower lows in November.
> 
> The down trend in the 4th Quarter ceased once price moved back
> above the Weekly 50% level, and has now moved in a tight 3-week
> sideways pattern, which eventually will breakout of.
> 
> As mentioned before, any up-trend won’t occur until there is a breakout
> of the 3-week highs.
> 
> Next Week gets interesting on the SPI as there is a divergence of the
> Weekly timeframes and a shift in resistance from above to below (brown).
> 
> Resistance drops, therefore the downtrend can continue lower next week
> if trading below 3526, which is part of the bigger picture:- *SET UP A*
> 
> But it also can be the spring board for the rotation upwards, which is
> what I’m looking to happen and complete the retest of the breakout and
> the rotation back into the higher timeframe central zones: SET UP B




Gidday Frank,  Enjoying what I have read of your book so far, but confess to being a bit slack and not giving it the attention it requires... bit time poor atm

Quick question ..... I know you like the big picture (weekly monthly quarterly time frames)  

When we assess where the index is situated at the end of a given month, should that be from the end of the calender month, or end of option expiry date for quarterly, or say the Friday closest to the end of the month ??   

In your experience, would gauging it from those slightly different positions make much difference to where you expect the position of the index to be ?  

Hope that makes sense ..... Just curious cause Fridays and Option changeover days can have their own little quirky nature at times, and wondering how that may affect the "bigger" picture on a "smaller" time frames if that makes sense  ie I like to trade shorter time frames, so am looking for the most optimal time to look for setups while still keeping the bigger picture in sync

Cheers Frank ..... appreciate your knowledge and willingness to share it as most do I'm sure


----------



## Frank D

Barney,

Most timeframes close on the last period of that timeframe when calculating levels.

For example, the last trading day of the Month or the Quarter provides the levels for the following timeframe.

However, I prefer to use a *'Weekly close' when calculating the Monthly levels*.

For example,  the last day of the month falls on Tuesday and the next month begins from Wednesday.

But the *Weekly timeframe is still open from the previous month and
 won't complete until the close of Friday. The closing price  of 
Friday (Weekly) will confirm the levels therefore verifing the levels in the 
next higher timeframe.*

Depending on where the Weekly closing price is trading in relation to
 the higher timeframes, this can confirm breakout patterns or
 reversal patterns as the new week begins and moves away from the
 open :- Monday into Friday over the next 5-days.

*It's the closing price of the timeframe not the closing price of 
option expiry or contract expiry*


----------



## barney

Frank D said:


> Barney,
> 
> Most timeframes close on the last period of that timeframe when calculating levels.
> 
> For example, the last trading day of the Month or the Quarter provides the levels for the following timeframe.
> 
> However, I prefer to use a *'Weekly close' when calculating the Monthly levels*.
> 
> For example,  the last day of the month falls on Tuesday and the next month begins from Wednesday.
> 
> But the *Weekly timeframe is still open from the previous month and
> won't complete until the close of Friday. The closing price  of
> Friday (Weekly) will confirm the levels therefore verifing the levels in the
> next higher timeframe.*
> 
> Depending on where the Weekly closing price is trading in relation to
> the higher timeframes, this can confirm breakout patterns or
> reversal patterns as the new week begins and moves away from the
> open :- Monday into Friday over the next 5-days.
> 
> *It's the closing price of the timeframe not the closing price of
> option expiry or contract expiry*




Thank you Frank. Makes perfect sense.  

I'm sure what you just told me will be all in the book, but I went straight to a couple of middle chapters which I read 3 times lol ................. Perhaps I should start at the start do you think  lol ....  

Funnily enough, even those couple  of chapters opened up a new perspective, and to be fair my trading has improved since, hence my slackness in not reading more.    Cheers

PS Read the book folks!!


----------



## Frank D

*SPI Monthly and Weekly*

That was quiet an interesting futures play this afternoon with the 
200 point rally, back into the 3-week highs and stall.

Resource stocks and Financials aren't helping, but i'd be extremely 
interesed to see how the futures market closes out the trading week (tomorrow).

Just need a Weekly close above 3761 so we can finally get out of this 
trading range.


----------



## Frank D

*Weekly Index & Forex Reports out now...*

Australian Index (SPI) Futures

http://austindex.blogspot.com/


DOW and S&P Index Futures

http://usindexweekly.blogspot.com/

*Financial Index Below  (Monthly charts)*

Financials will continue lower in 2009 and find a floor around the 2009 lows and move into a sideways pattern.

Major resistance around the 50% levels if it gets that high, especially in the first Quarter of 2009.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Global markets are slowly creeping up, and this is best illustrated by
 Monday's  Daily HOOK pattern over the Weekly 50% level.

This favours higher prices into Friday (random length) to close out
 the trading year for 2008.


----------



## Frank D

*SPI Weekly and 5-day pattern*

3-week highs @ 3748 is still capping the market on resistance.

When there is a Friday close above this level then the expectation is to rotate towards the January 50% levels.

Based on US markets moving higher (HOOK pattern), I would think the SPI should finally move out of this consolidating trading pattern.


----------



## Frank D

*S&P Monthly and Weekly*

As pointed out the last Weekend's Weekly Report:- the higher low in 
January favours higher prices back towards the monthly 50% levels....

And this was set up perfectly with Monday's *HOOK bar over the Weekly 50% *level:- 

*Dilernia principle*:- Daily HOOK bar favours higher prices into Friday's close.


----------



## nomore4s

Hi Frank,

Currently reading your book, and I must say it is just about the best $75.00 I have ever spent. Worth the read even if you don't end up using your method.

But I must admit your posts make alot more sense now

I'm a bit surprised it hasn't attracted more attention on this forum because it is the best method I've seen using time as a major tool.
It also indentifies the trend very well, the current position in the trend (very important imo), and possible turning points within the trend.
Your method is very useful even if it is only used to identify the trends over the different timeframes.

It also seems to give me an earlier entry into some my trades (lower risk & better R:R) -  can get on the trade before the major move (ie the spring board which causes the breakout). And it paints a very clear picture of where the trade could go. I'm also able to fit it in with my current trading very easily.

In the process of getting a code written for amibroker so I don't have to manually do all the channels (very time consuming to start with) because this will become an important part of my trading from now on.

Thanks for your willingness to share your ideas for such a small outlay as there is no way I'd ever be smart enough to come up with something like this.

PS - I'm not saying this is the be all and end all of trading or the one and only method but it is a very, very useful tool which if used correctly can be a very powerful one imo.


----------



## chops_a_must

The pivots are one of the easier things to get into AB nomore4s.

Pretty sure I have Frank's yearly pivot calcs which you can then alter for each time frame.


----------



## Frank D

Nomore,

Thanks for your view on my book.

I think within few months you'll change the way you view technical 
analysis forever.

Chops,

many think pivots are easy to use, but you need to have certain
 principles, rules & set-ups to use overlayed in a multi-timeframe 
model, which suits the day-trader, the swing & trend trader, and the
 position or long term investor.

Rules that everyone can follow, no if or buts.

Last week's HOOK pattern set-up is a perfect example on US markets, 
which is described in the book.

Using the  Weekly 50% level as a trend guide, and then for the day 
trader using certain probability patterns within the 5-day range pattern 
and range trading using the ATR of the market, when trading the SPI.

*The key elements of T/A are:- Support/Resistance, TIME, PRICe and less so Volume.*

You want to be able to understand that support & resistance shifts as TIME moves foward defined by Price.

cheers
Frank


----------



## Frank D

*Weekly Index & Forex Reports out now...*

Australian Index (SPI) Futures

http://austindex.blogspot.com/

DOW and S&P Index Futures

http://usindexweekly.blogspot.com/

_"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"_


----------



## Frank D

*SPI Weekly and 5-day pattern*

As per Weekly report:- once below the Weekly 50% level @ 3691, 
the expectation was for price to move towards the Weekly lows @ 3481.

As we can see certain days don't move in straight lines ,and often they
  move in rotation and extension patterns within the 5-day pattern, as it follows the higher timeframe model.

_*Today's Premium Report....*

"Yesterday's view of price moving up into the channel highs and
 reversing down 87 points played out, but sadly not in the day session.

Along with this week's view for price to continue down into the Weekly 
lows @ 3481.

Therefore there are 2-days to go in this Weekly timeframe, but that 
move down won't occur unless there is a breakout of the 5-day lows 
on Thursday @ 3560.

Below 3560 and normal price action would see a move down 44 points 
and then consolidate for most of the trading day:- choppy"_

*Once price opened below 3560 today the continuation down towards 3481 
was confirmed with a test and reject pattern and a 5-day breakout.

Validation intra-day also confirmed with a rise upwards of 27 points and the rejection down below 3560 to complete the move towards 3519*


----------



## Frank D

*Weekly Index & Forex Reports out now...*

*Australian Index (SPI) Futures*

http://austindex.blogspot.com/

What's the chances of a rebound next Week in the Australian Market?

It has more to do with Resource stocks:- BHP and RIO Tinto, than anything else.

*DOW and S&P Index Futures*

http://usindexweekly.blogspot.com/


----------



## Frank D

*SPI Weekly and 5-day pattern*

What chances is there of a rebound in the SPI in the next 3-days?

As mentioned in the Weekly report, *it's all up to BHP and how it 
responds to its report tomorrow:- support $28.00.*

Expectation of a move down into 3426 has completed, with the potential of 
a swing back towards the Weekly 50% level, but that won't happen if 
US markets continue to roll over tonight, and BHP can't hold $28.00 
tomorrow.


----------



## Frank D

*SPI and BHP*

One is trading below the Weekly lows with the potential to move down towards the January lows....

Whilst BHP is supported on the Weekly lows and January 50% level....

We begin to see BHP trading below these support levels and it will drag the entire market down.

If BHP gets back over the Weekly 50% level once again, then based on the Weekly report, the 
the potential move back towards $33 is a possbility.


----------



## nomore4s

Frank,

A quick question.

When you talk about lower weekly opens are you refering to when price moves upward from Mondays open and closes higher on Monday? Bottom to Top pattern?

Or, does it refer to Mondays open in relation to Fridays close?

I'm thinking it is in relation to Mondays open & close.

Thanks


----------



## Frank D

It’s when the previous week has close on its lows :- Friday.

If  the lower Monday is matched with support then your expectation is
 that price is moving higher towards Friday:- random length.

But you need to take it into context with the market :- Bull market.

If that same price action is occurring in a bear market, then you would 
go looking for shorter lengths, even though it’s the same pattern.

If price action occurs around the Monthly lows then it can be held longer, 
or in the case of BHP you are buying the *most robust support zone in January @ $28.00*

It doesn’t mean support will hold, but you already know the outcome 
if it does or doesn’t.

Someone *short BHP from the Weekly highs or from the Weekly 50% 
level wants to see how BHP closes on Friday, because if it closes
 below support, then that trader can begin to hold another 5-day trend.*

The same applies with shorting the market:- if you are shorting and price
 is dropping from a higher Weekly open then you are trading a weekly timeframe down, which has a random length.

Ideally you want to be trading down from *midpoints, as all trends 
originate from mid points, that lead to breakouts.*

If that Friday closes below support, then you continue to hold based on 
the next movement over the next 5-days…

As you can see the levels in the Dilernia model are precise and factual for
 all to see and provide the most optimal levels to either BUY support or 
Sell resistance, *but ultimately it’s the market that decides which 
direction price is going to go.  *

Day trading is different, but you should still have an understanding of
 what's going on in the higher timeframes.

*S&P Weekly and 5-day pattern*


----------



## Frank D

*SPI Monthly and Weekly*

Should reach January's lows around 3128 by next week I would
think.....

and I'm expecting a lower low pattern in February.

Weekly report out tomorrow


----------



## Frank D

*SET-UP A*:- 4th week reversal back into February's balance point 
and then continues down into the lows from next week, as per Weekly 
Report.

This often occurs when the market has moved 3 weeks in one direction,
 the following week can often close in the opposite direction:- higher Weekly close.

*SET-UP B*:- There is a 3-week low breakout from last week @
 3426, price has come up and is now retesting the break.

This often leads with a higher daily open and a continuation of the 
down move as of TODAY, and makes it's way down towards the Weekly 
lows later this week.

*Wednesday:- 2 plays simply based on 3409*

Trading below 3409 and bias is to continue down towards the lower 
channels @ 3335, as part of Set-up B.

Above 3409 level results in a 'HOOK' pattern.

3409 becomes support and moves upwards 44 points:-continuing towards 
the Weekly 50% levels"

Today started with the higher open selling off from 3426 moving down into 
44-point lows. Whilst price was below 3409 the expectation was a continuation down into 3335.

Except the market reversed off its 44 point lows and HOOKed back above 3409.

I was looking for a retest of 3409 for a move towards the highs, expect 
the HOOK pattern didn't pan out. That pattern would have provided 
the perfect long set-up:- text book pattern.

But once price started to trade above 3426 (previous Weekly lows), 
these levels became support :- confirmed with R27 spiral lows rising 
upwards.

Now the SPI is capped @ 3464, and ideally I would like to see the SPI 
come all the way back down to 3409.

But I don't think that's going to happen, simply because Today has a
 bias to close higher, and if it's breaking above 3464 after 3pm there 
is probably more upside into the close:- random length.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI completes the higher weekly close, and now there is an expectation
 that markets can unwind and continue down towards the February lows.

The most robust pattern would be to see the SPI hit the 3-week highs 
and February 50% level....

However, even though the SPI isn't near the February 50% level, 
which would provide the most robust reversal down, the Weekly 50% 
level can easily do the same thing early next week.

But will also depend on US markets on Friday, and the direction they
 take.

*Weekly report out tomorrow*


----------



## Frank D

*SPI Monthly and Weekly*


Personally I would like to see the SPI move down over the next 2 weeks
 into February's lows to complete the 2-month pattern.

Once that occurs, I'll be looking for a first decent bounce in our market for months:- 25-30% 


*Weekly reports out now*

Australian Index (SPI) Futures

http://austindex.blogspot.com/

DOW and S&P Index Futures

http://usindexweekly.blogspot.com/


----------



## Frank D

*SPI Weekly*

As per Weekly report, I'm bearish on the SPI in February and i'm looking 
for lower prices over the next 2 weeks down into Feb's lows.

We have had a push up this week from the 5-day 50% level towards the highs on Tuesday, and now a reversal back down.

Depends on what US markets do on Tuesday and where the SPI opens tomorrow (back above the 5-day 50% level)... .

But below the 5-day 50% level and price will be back below all timeframe 
50% levels which favours further weakness.


----------



## Frank D

*SPI Weekly*

As per Yesterday's view and today's Premium report...

Below 3469 and price was moving down into Wednesday's lows @ 3386...

Completing the precise bottom.

Looking for more weakness down over this coming week.


----------



## Frank D

*SPI Weekly and 5-day pattern*

This week the SPI has followed out a number of 'text book' 
patterns.

From the expectation of an early rise upwards to a reversal back down
 into Wednesday-Thursday's lows.

And now with today's 'top', there is now the expectation price will 
continue downwards, as part of the Monthly trend using *Spiral-Point* 
trading and the 5-day pattern.

I'm expecting another move down next week:- 2 weeks down in 
February's lows

However, if US markets move up on Friday then the SPI is back above
 the Weekly 50% level which could actually see the SPI back towards
 the last week's highs once again:- 3571

It’s not part of my view just yet, but I’ll certainly adjust to it based on 
the price action in the US.


----------



## Frank D

*S&P Weekly and 5-day pattern*

I had a feeling US markets were moving higher on Friday, simply based on 
the S&P and Thursday’s Daily HOOK over the Weekly 50% level, 
which normally leads to a higher Friday close.

Which puts the SPI back around last week’s highs.


----------



## Frank D

*SPI Weekly and 5-day pattern*

I’d be more than happy to see the SPI continue to consolidate around these levels for the next few weeks or months, as it has been doing.

If it’s around the 5-day extremes it rotates back towards the central zones.

And if it HOOKS over the 5-day 50% level it Thrusts outward towards the extremes of the 5-day range.

*Trade on the side of the levels and Spiral points.*


----------



## Frank D

*BHP Monthly and Weekly*

The last time I mentioned BHP was based on the January 50% level, 
the Weekly close, but then how the following week reacted to those 
support levels @ $27.56

https://www.aussiestockforums.com/forums/showthread.php?t=6588&page=19#379

BHP has continue higher and has moved back into Fair value levels @
 33.60

These levels are major resistance zones on BHP and are often clearly
 define the Primary and Secondary trend:- Yearly & Quarterly.

Price has reversed into the higher time 50% levels, and now I would look 
for a long term rejection pattern downward.

*The first step on any reversal down will be price trading below the 
Weekly 50% levels.

The 2nd stage would then need to break the monthly 50% levels, and 
that’s going to take some time.*

What’s going to push BHP lower, namely commodity prices.

Things begin to change if BHP starts trading above $33.60 and begins
 to consolidate above it....

 but I’m looking for a double bottom pattern that matches 2008 lows before any new long term UP trend begins.


----------



## Frank D

*DOW Monthly*


DOW completes the 2-month thrust pattern down from January’s 50% level into February’s lows:- Dilernia Principle

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 into 7250 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


----------



## Frank D

*SPI & DOW Futures Monthly*


Two days to go until the end of the month, and the SPI still hasn’t 
reached the monthly lows in February, whilst the DOW has and is 
currently being supported.

With the shift in timeframes next month, US markets will more than 
likely follow the Move down into the March lows, which match the 
first Quarter lows.

If US markets continue down this will more than likely result in a 
breakout pattern in the Australian market of the monthly lows and 
continue down towards the Yearly lows @ 2770 and as far as
 2606.

These patterns fit in with my overall view of 2009 continuing down 
towards the Yearly lows.

Trend guide are the Monthly 50% levels.

If the SPI had reach February’s lows in the first two weeks there could
 can been a probable move towards the March highs before continuing 
down, but all roads are pointing SOUTH and completing the Yearly lows in
 the next couple of months.


----------



## Frank D

*DOW S&P Monthly*

US markets moving down into March Lows, which are starting to align 
with the 2009 Yearly lows


http://usindexweekly.blogspot.com/2009/02/dow-s-weekly-28th-february-2009.html 

Begin to look for some support coming into the market this week with 
some confirming patterns (5-day 50% level cross over).

Any upside and February lows (blue channels) would be seen as 
resistance for the first couple of weeks.....

 With a possibility that a swing towards the March 50% level
 could take place, but that won't happen until nearing the end of this 
month if lucky.

*Note:- *Currently price action is in a Thrust pattern moving from 
the 50% levels towards the extremes over Time, as it follows the Primary Trend and cycles 
towards the lows.

If March lows can't hold and there is another Crash pattern, as was the case
 in January and September 2008:- then those new
 lows in the 2nd quarter imo finally mark the end of this down 
move for 2009.


----------



## Frank D

*Financial Index *

Hit March lows and completes the first Quarter down move.

Major support around these lows @ 2845 in March

There is one larger Trend (Yearly) pointing down to 2500 on the 
Financial Index.

This will align with my 2nd quarter pattern and the completion of the
 Yearly lows for 2009.

2nd Quarter 50% level resistance.


----------



## Frank D

*BHP...*

As per Previous view on BHP:- expectation that BHP should continue 
down towards the Yearly lows in 2009, after stalling and reversing 
down from the 50% level.

March lows Random support @ $24.50 with the view BHP can remain 
range bound between March lows and March 50% level.

The closer it comes to the end of March the Support levels will shift lower, 
as per of the larger trend down.

*Note*:- March lows are random support, which means that there is 
a larger trend which suggests lower prices. 

Text book patterns would be to move downward over the coming 
months until the 2009 lows are reached, as price follows the markets 
based on Time.

Even though there is an expectation of support, March lows can break.

Therefore any breakout of March lows with a Monthly close below is 
viewed as resistance, with a downward Primary trend into the lows.


----------



## Frank D

*DOW  and S&P Weekly*


US markets moved down into the March lows and completed the first 
stage of a reversal pattern Today with the move into the 5-day 50% level.

Once around the 5-day 50% level sellers hit both markets late once the day session closed.

There hasn't been a cross over of the 5-day 50% level, but I would focus
 on using intra-day support levels on Thursday looking for continuation of a
 3-day up move back towards the 5-day highs by Friday.

Probably reaching the Weekly 50% level by next week (Next Week's 50%).

*Note*:- these are still not the lows of the market, just the current lows within this timeframe.


----------



## Frank D

*S&P Monthly and 5-day pattern*

S&P has reached the March lows @ 699 with late Buying on
 Friday.

Any up trend will be dependant once again on the 5-day 50% level, as
 was the case at the first support zone on Tuesday but Wednesday’s 
5-day 50% level rejected the market breaking support the next day.

Thursday and Friday followed the market path each day into their 5-day
 lows.

*Next Week:- *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.

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

*The first stage of any reversal upwards would be price heading higher 
from 695, which will be confirmed by the 5-day 50% level, *

But the Weekly 50% level next week is going to let trader’s know how 
robust these support levels are, and whether there is a rotation towards
 the monthly 50% levels once again.

http://usindexweekly.blogspot.com/2009/03/dow-s-weekly-7th-march-2009.html



These are still not the lows for 2009.


----------



## Frank D

*S&P Monthly and Weekly*

Precise double monthly low pattern on the S&P @ 669.

First sign of a reversal pattern was the break of 695, which aligned with 
the 5-day 50% level and a rally into the 5-day highs.

There is a view of higher prices this month, but I would look at the 
market stalling around the Weekly 50% level.

The ideal pattern would be to see a down move from a higher Daily
 open back into 695 over 1-2 days and then continue higher from a 
lower Daily open using 695 as support.

There are still lower prices to go in 2009, but March looks well supported
 at this stage and due for a counter-trend move upwards.


----------



## Frank D

*S&P Weekly and DOW 5-day pattern*

View were for the US markets to rotate back down over 1-2 days 
into support before any potential up move would continue.

This was after the move down into the March lows and the expectation
 that price would reverse upwards.

Wednesday reversed down from the highs into the 50% level :- random support (1 day).

We have two plays on Thursday:- 

*Set-up A*:- rises up from support hits the Weekly 50% level once again and then reverses back down ;- 2nd day.

*Set-up B*:- rises up from support and continues towards 
Thursday’s highs:- not a 2nd day reversal.

Therefore even though I have a view of a 2nd down day, I have a view 
that support can push the markets higher into a 2 pattern play:- adjust to the market.

Break of support and it’s part of the 2nd day pullback, which hopefully 
 lines up with lower support around 695 on the S&P on Friday.


----------



## Frank D

*DOW and S&P 5-day patterns*

US markets rising up from support and back into the Weekly 50% level.

Partial exit at these levels, run breakeven stops from entry...

Wake up tomorrow and it's either Around Thursday's highs, or follows the
 2-day reversal pattern back down.

K.I.S.S.


----------



## Frank D

*S&P Monthly and 5-day pattern*

US markets continue with the reversal up from March lows and 
heading towards the Monthly 50% level. 

Thursday provided a nice long trade into Thursday's highs, as part of 
the reversal upwards, along with a breakout of Thursday's highs.

This puts a Friday range high aligning with February's lows @ 765.

We will have a fair idea how robust this reversal is from the March lows 
by price action next week.

Robust reversal should continue towards the March 50% level by next 
week, with the potential to continue higher this month or from April.

Not so robust:- would be US markets failing to move much higher than 
the February lows over the next 2 weeks and consolidating below into 
April.

If this is the case, then more than likely the trend will resume down in 
the 
2nd Quarter.


----------



## Frank D

*Financial Index*


The Australian Index market has reached the March 50% level, and 
the Financial Index should reach it by today's open.

If price is going to continue to move down into the Yearly lows, price 
should stall around the March 50% level, consolidate and then continue 
down in the 2nd Quarter.

If this is a robust reversal off the Quarterly lows, and price is trading 
above the March 50% level, then a move towards the 3-month highs is 
a strong possibility early in the 2nd Quarter.

Partial exit around the Monthly 50% level today, run trailing stops until 
April and see how the rest of this month plays out. 

The Financial Index hasn't been trading above the Quarterly 50% level 
since December 2007, so the April 50% level is extremely important (red).

This level will be confirmed at the end of this month.


----------



## Frank D

*SPI Weekly and 5-day pattern*

March 50% level 3498, & even though this a major resistance level, 
which could stall price for the rest of this month (or not)….

Based on the Weekly high breakout this week, I would treat the market
 as consolidating between both the Monthly 50% level and the Weekly
 highs for the rest of the week, moving into a 3-day sideways pattern into Friday.

US markets still have further upside in March, so there is still a possbility
 that there are higher prices....but i'll make a judgement after Friday's 
close.

Because a Friday and Weekly close above the Monthly 50% level is
 often further confirmation that there is more upside  in this Market.

However, I personally wouldn't want to be entering long positions around 
these highs without some short-term pullback


----------



## Frank D

*S&P Monthly*

S&P Completes the move into the March 50% level @ 801 and stalls.

These 50% levels have been a major resistance zone, and if price 
consolidates over the next week or so until April, then the trend guide will 
be based on the 50% level next Month.

Any continuation downward should begin from there, and finally complete 
the move into the Yearly lows to finally set a bottom in place for 2009.

I also mentioned week’s ago, that a bottom early in the month around 
the monthly lows has the potential to swing the market upwards 25-30%.

This is pattern is extremely valid on a double monthly low pattern as is
the case in March.

30% upwards is a move towards the April highs or about 908 on the
S&P.

Therefore the next week and until the end of the Quarter should give traders 
an idea about the market direction and possible moves in the 2nd Quarter.


----------



## Frank D

*SPI Weekly (left) and Financial Index (right).*

*SPI* moves into a 3-day sideway pattern into Friday around the Monthly 50% level.

Any higher moves next week and it’s up towards next week’s highs:- this 
is valid as it’s a  Breakout of the Weekly timeframe that normally would 
extend into the next Weekly timeframe HIGHS:- *break  & extend.*

If the trend is going to continue higher, it should hopefully align with the
 5-day 50% level next week and push towards those highs

However, I do have to factor in that this Monthly 50% level is a 
valid resistance zone that can see the next 5-days drift down into
 the Weekly 50% level and into the beginning of the 2nd Quarter.

I’ll simply know that by next week’s 5-day 50% level.

*Financial Index *closes right on the Monthly50% level, at this 
stage there is no sign that this will reverse down until the 2nd quarter 
begins and a new trend originates from the new 50% level:- *Either up or down*

I still have a lower Primary range target on the Fin Index, but it 
won't surprise me to see a move towards the 3-month highs either and 
back to fair Value.


----------



## It's Snake Pliskin

Hi Frank,
I saw your posts in the other thread and kind of enjoyed them. 

Just some questions about your book and system.

Is the material in the book a stand alone system or parts to a system?

Using the parts or the system requires sophisticated charting packages or could Incredible charts etc be ok?

Is there one book or two?

Please excuse my ineptitude as I have a dark cloud over me.
Thanks


----------



## Frank D

Hi Snake,

The material in the book is about building a model and methodology 
based using 3 of the 4 key parameters of technical analysis:- support/resistance, Time & Price.

Once you establish the model then you trade probability patterns based 
on the multiple layers of timeframes.

The core theory of the methodology is:- *all trends originate for midpoints 
and thrust outward. All trends cease at support or resistance levels 
and rotate back towards midpoints.*

Those midpoints (50% levels) and levels of support or resistance are 
dynamic and shift as Time moves forward. 

The model has a basic generic template that everyone uses and not 
curve fitted to suit the methodology. It is there for everyone to see.

The important part in establishing a timeframe model is to establish
 the Primary and Secondary trends, and then as a trader you are trading 
the lesser timeframes either using ‘thrust patterns’ or corrective 
reversals.

Regardless of whether you are a day trader or a trader who holds more than
 1 day you need to know the trends and cycles of the market. Where 
the market is going and where the market is likely to reverse:- picking 
tops and bottoms.

So basically the book strips the market from top to bottom and 
finds statistical probability patterns using timeframes, and also using 
standard deviation techniques within the 5-day patterns for day 
trading.

So to answer your question, if you want to day trade the information in 
the book then it helps to have the charting package but it’s not necessary

 I also write the blog-report so all the levels are shown.

If you want to trade longer term or EOD then you can do everything by 
hand if you want. You don’t even need a charting package. 

It’s not a stand-alone system; it’s part of a system that suits the 
individual trader based on the price action within the model.

There is my first book written in 2003 (updated in 2005), but you 
probably won't need it.


----------



## It's Snake Pliskin

Frank D said:


> Hi Snake,
> 
> The material in the book is about building a model and methodology
> based using 3 of the 4 key parameters of technical analysis:- support/resistance, Time & Price.
> 
> Once you establish the model then you trade probability patterns based
> on the multiple layers of timeframes.
> 
> The core theory of the methodology is:- *all trends originate for midpoints
> and thrust outward. All trends cease at support or resistance levels
> and rotate back towards midpoints.*
> 
> Those midpoints (50% levels) and levels of support or resistance are
> dynamic and shift as Time moves forward.
> 
> The model has a basic generic template that everyone uses and not
> curve fitted to suit the methodology. It is there for everyone to see.
> 
> The important part in establishing a timeframe model is to establish
> the Primary and Secondary trends, and then as a trader you are trading
> the lesser timeframes either using ‘thrust patterns’ or corrective
> reversals.
> 
> Regardless of whether you are a day trader or a trader who holds more than
> 1 day you need to know the trends and cycles of the market. Where
> the market is going and where the market is likely to reverse:- picking
> tops and bottoms.
> 
> So basically the book strips the market from top to bottom and
> finds statistical probability patterns using timeframes, and also using
> standard deviation techniques within the 5-day patterns for day
> trading.
> 
> So to answer your question, if you want to day trade the information in
> the book then it helps to have the charting package but it’s not necessary
> 
> I also write the blog-report so all the levels are shown.
> 
> If you want to trade longer term or EOD then you can do everything by
> hand if you want. You don’t even need a charting package.
> 
> It’s not a stand-alone system; it’s part of a system that suits the
> individual trader based on the price action within the model.
> 
> There is my first book written in 2003 (updated in 2005), but you
> probably won't need it.




HI Frank,

Thanks for the clear explanation. 

Cheers...


----------



## Frank D

*SPI Weekly and 5-day pattern.*


Expectation the trend would continue higher this week, as it’s following 
the Weekly breakout pattern from last week:- *break and extend.*

As per previous post:- *ideal long set-up was the 5-day 50% level this 
week for the move towards these highs.*

The only problem price didn’t drop down far enough on Monday to set-up
 up the precise entry on the way up:- *buy dynamic support*

Monday’s target’s reached & Short the top @ 3561, but it’s high risk as
 there is a larger trend pushing the market higher.

Also there is bar closure above 3548 which could send the market higher 
into the close:- another 44 points higher and hitting the Weekly highs.

*The closing price of the bar is often a good indicator that the trend is
 either going to continue or reverse, and at this stage it's not reversing.*

If shorting you take the opposite view:-  ideally a 44-point reversal
 from these levels would be fine down into the 3520’s

Once you take out 10 points run the stops above today’s highs, and 
see where the market goes into the close...nothing to lose 

Not interested in trading longs around these highs.

And not interested in holding shorts because price is trading above the 
March 50% levels, other than a 40-44 point reversal.

*The 5-day highs are often a robust resistance and shorting zones, but 
the pattern needs to be optimised to market conditions. *

The trend has changed, as it's trading above the Monthly 50% level,
 so *statistically price can still 'stall & reverse' but less likely to do so.


*Keep in mind that all trends originate from the 50% levels, and if 
it's rising up from the Monthly 50% level at the start of the new 
Weekly timeframe, there is probably more upside to go.

*Potential 25-30% reversal pattern off the Monthly lows in the first
 Quarter could see the SPI back around the 3-month highs.*

*Tomorrow is another day....*


----------



## Frank D

*SPI Monthly *

25-30% up swing from the March lows is playing out.

Should reach the March highs by the end of this month, helped by
 US markets following the same pattern.

If there is going to be a top out I would probably think that there 
is resistance around the March highs, but probably make a slightly higher 
high in April.

Fair Value on the SPI will be confirmed at the close of this month, which is an expected 
resistance zone.

Once that occurs my view is for the 2nd Quarter to move back down into 
the April 50% level and probably move into a 3–month sideways 
patterns, using the April 50% level as a larger timeframe support 
zone: consolidation.

As pointed out, there was no reason exit all financials other than partial
 exit at the March 50% level and hold until April:- potential minimum
 30% gains and in some instances 40%


----------



## Frank D

*SPI monthly and 5-day pattern (24 hour)*

Trading above the March 50% level and expectation price is heading 
towards 3800+ by the end of this month.

These past two days has seen the market consolidate, and any 
trend continuation higher should align with the 5-day 50% level tomorrow 
and make a higher high tomorrow.

Depending on where the market opens, but this view is based on the
 SPI remaining above the 5-day 50% level and lower channel support.

If  price is trading below the 5-day 50% level tomorrow, then I’d have
 to factor in that Friday is either going to close lower or somewhere in 
the middle of the 5-day range, and not make a higher high.

I can't view any continuation down until the market moves into April (below 50% level), or is trading around the upper Monthly ranges (3800+)


----------



## Frank D

*SPI Monthly and 5-day pattern (24 hour)*

Expectation the SPI is heading higher, and Expectation that today
 would continue higher.

Sycom  channel  low support sets up the move towards the highs.

But today’s set-up to BUY the SPI was simply based on the observation 
of how the market reacted setting it’s trend the previous two days....


_We have also seen the past two days move 27 points against the open 
and then reverse the daily trend in the opposite direction. That's 
something we should keep an eye on today.

If the market moves down 27 points and begins to rise upwards, then 
the view is for a minimum move upwards 42-44 points., with the 
expectation that the SPI is moving towards 3674-82 _

That 27 point move was 3612, which was the perfect long set-up in today’s market.

I subscribe to the market continuing higher today, and after a partial exit 
@ 3641,  i'll just let the market run it’s course towards 3674-82

* I  also know that if the SPI reverse back down and takes out 3612, then 
the SPI will probably push back down towards  3583.*

So I won't be buying around 3612 again.

And then i'll be interested in watching how the SPI closes around those
 lower levels.


----------



## Frank D

*SPI Monthly and 5-day pattern*

Today's is the day to start off loading long positions and moving to cash.

Even though I'm looking for higher prices, I've got a feeling that we 
are moving into a 3-day pullback into the first of April and then make 1 
last UP move before heading lower.

If the SPI breaks 3718 then it's heading UP towards 3775, but I've taken 
short positions on the highs today @ 3716. (partail exit 3701 and holding)

DOW up move wasn't high enough which suggests a short-term pullback,
 and then a move upwards next week before reversing and maybe collapsing.

*I've updated my view of the 2nd quarter in 2009 for those 
interested.* http://austindex.blogspot.com/


----------



## Frank D

*SPI Weekly and 5-day pattern*

2nd day of the pullback and I've got 1 more day until March ends.

Today's support is valid, but that will shift tomorrow.

I still have a view of one last push upwards in Early April before 
reversing back down, therefore I want to see where tomorrow ends up 
and begin to look for long set-ups from Wednesday onwards.

Once that plays out my entire view of the market changes.

UP move is valid whilst price remains above the Weekly 50% levels.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI has moved into a 3-day reversal pattern from Friday to close out 
the trading month today.

Tuesday’s 5-day lows @ 3555 supporting the market sending price back
 into upper resistance levels, with the view the SPI should consolidate 
and close out Tuesday below 3610:- 44 point reversal.

Tomorrow is April and it’s where I begin to get a short-term bullish 'rush' towards the highs.

Ideally the best pattern would be to see the SPI come down and retest 
the Weekly 50% level and then continue higher from Thursday onwards….

But if the SPI opens above 3625 tomorrow there could be buyers 
appearing pushing the SPI upwards. 

I’ll start to get bearish around those upper levels in April, and or if price
 is trading below the April 50% levels, as there is a larger Primary Trend
 in 2009 that needs to be filled, as per Weekly report.


----------



## Spud1

Frank D said:


> *SPI Weekly and 5-day pattern*
> 
> Thank you for you daily reports.
> 
> Spud


----------



## Frank D

*DOW Weekly and 5-day pattern*

Short-term Bullish in early April, with US markets finding support on 
the Weekly 50% level on Monday and then kicking upwards on Wednesday.

The important part in this pattern is the Daily move back above the 
Monthly 50% levels should continue higher into Friday.

Once this higher high pattern plays out then my view is we should get 
a larger correction underway, and I wouldn't be trading stocks on the long 
side until MAY.

SPI is above the 5-day 50% level on Today's open (3625), and whilst 
it's above this level the view is to follow a similar pattern and make a higher
 high in April.


----------



## tech/a

Frank if this plays out then that may sit well with my XAO chart on the E/W thread (The analysis ---still needs to complete upward move).


----------



## Frank D

*SPI Monthly and 5-day patterns*

Precise text book patterns using the Dilernia Model:- 

1) Rally off the Monthly lows in March with an expectation of a 25-30% move 
upwards.

2) Precise top last Friday and reversal down into the 5-day lows.

3) 3-day reversal down into first of April with the expectation of a higher move
 in Early April.

4) First confirming pattern was a move back above 3626.

5) Test of Support of 3626 today:- thrust pattern should continue towards the
 5-day highs, and a higher high tomorrow.

6) Completion of 44-point move has played out today @ 3668, so either exit
 or partial exit here and hold.

*7) Higher high target in April for a precise move would be 3845.*

Personally It wouldn’t surprise me if it doesn’t get that high....

8) As any higher Weekly opens around those  upper levels and I’ll begin 
looking to trade on the Short side and hold positions longer using 5-day 
pattern techniques.


----------



## CanOz

Thanks for your posts Frank, I'm finding them particularly useful as of late. 

CanOz


----------



## Frank D

*SPI Weekly and 5-day pattern*

cheers Can oz.....

SPI completes the move into the 5-day highs @ 3710:- random resistance.

Resistance can reverse 44 points down, Partial exit 3695 + 15  looking to exit @ 40 point
 reversal (short-term intra-day reversal)

Or price can continue to push higher in late trading, as part of a larger 
trend up move based on the April pattern

A close above 3710 is a breakout in the 5-day pattern,which should
 continue higher into Friday and at least go close to 3768 by tomorrow.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Reversal pattern played out from the 5-day highs

Could see buyers appearing around these levels and close higher, as part of the push upwards in April.

But I've also seen further selling into the close after hours on futures 
 into the gap just to wash out any longs today (3617)

On sidelines next trade tomorrow.


----------



## Rockon2

CanOz said:


> Thanks for your posts Frank, I'm finding them particularly useful as of late.
> 
> CanOz





Same here,,, well done Frank..


----------



## Frank D

*SPI Monthly and  Weekly*

Expectation of an early push upwards in April to make a higher high is 
playing out

Text book pattern on a 2 X Monthly move should take the SPI up 
towards 3845 (April highs)

*First target of 3768 reached in Sycom on Friday*, and even though 
I have a view of higher prices in April, it wouldn’t surprise me to see a push 
back towards the April 50% level from next week.

This is something to keep an eye on, whenever there is a higher Weekly 
open and price is trading around Monthly levels and the 5-day highs, price can come back looking for 'Support'.

At this stage *a move down into the April 50% level isn’t a probability
 pattern next week,* but it’s something traders should keep an eye on from next week:- 5-day cross-over patterns

The moves upward from March lows to where price is now have been probability patterns.

If a down move plays out, then things begin to get interesting
 around support, as per Weekly Report.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Friday highs and spiral top selling down from 3759…

If my pattern plays out that this is a short term high (3768) , then
 price could make its way towards 3668 (5-day 50% level) as the first 
stage of a reversal pattern down into support.

If a higher Weekly close is going to play out, then any selling is viewed as
 a single r44 point rotation downward, and that Thursday’s highs 
@3710 becomes support and there is a higher push upwards into the 
close.

*I’ve got no idea which one is going to play out now, just simply trade
 the intra-day patterns today, bank the cash and trade again from
 Monday.*


----------



## Frank D

*SPI Weekly and 5-day pattern*

Higher weekly open and around 3768 and 5-day levels (3777) hasn’t
 resulted in a sell down...

And the SPI hasn’t been able to complete a 44 point range on
 Monday: statistical intra-day pattern from resistance

Looks like the April highs @ 3845 will be reached in Sycom or Tomorrow


----------



## Cartman

howdy Frank ---- no input in particular from me, i concentrate on short time frame trading mainly ---- but lately ive been working on a couple of ideas which incorporate the main gist of your methodology, and ive gotta say, its put door knobs on doors i didnt even realise were in the house  ----  all i gotta do is furnish the new rooms ive discovered  ----


----------



## Bobby

Hey Frank your guess is crook at the moment but you never know ??    Just like to ask why you guru's
 need to retail information ?

I'll have a guess now , today will be a downer , go short boys & girls .

Gee if I had a big  edge I'd be playing up in paradise ,  But at least you have the guts to say a figure in the future , better then the Dream sellers  

Good on you .


----------



## Frank D

Bobby,

I don’t guess the markets, I trade pattern recognition using support and resistance.

That’s why I said on the 3rd of April….



Frank D said:


> This is something to keep an eye on, whenever there is a higher Weekly
> open and price is trading around Monthly levels and the 5-day highs, price can come back looking for 'Support'.




There was no follow through on the downside on the SPI on Monday so 
I covered shorts, but the same pattern that I was looking for in the 
SPI played out precisely in the S&P 500.

*Trading is all about support-resistance and trends, not about guessing.*

*S&P Weekly and the 5-day pattern*


----------



## Bobby

Frank this is part of what you said yesterday ``

(   Re: AMT Model & Methodology  )

--------------------------------------------------------------------------------



Looks like the April highs @ 3845 will be reached in Sycom or Tomorrow 

*Thats why I made the comment*  , don't think I'm having a crack at you , like the way you think .


----------



## tech/a

Just like any other form of analysis.

Prove---Disprove.
If (a) doesnt pan out then move to (b) or (c).
Everything is "what if".


----------



## Frank D

*SPI Weekly and 5-day pattern*

I’m a discretionary trader who analyses the market based on a number 
of different parameters. I’m a chart-reader first and foremost, and then 
I trade my view using certain techniques. I don’t haphazardly trade 
indicators.

Once I have analyzed the market I then find levels to trade from and 
*optimise my set-ups on a daily basis*

I have no problem ‘guessing’ the market in advance because I’ve seen 
all these patterns many times before: -* pattern recognition.*

Yesterday I was looking for a 44-point reversal in the market which is
 a statistical intra-day pattern using resistance and spiral tops, because
 it was part of my view this week

Resistance held but my intra-day pattern didn’t fully complete on 
Monday.

Today I was still trading the move down as part of my analysis, and 
once again using a *Spiral Top *@ 3757, but this time we have a 
44 point reversal completion (money pattern) +35, and I won’t be trading 
any longs today;- taken the money and run.


*So back to the analysis:- *

I’m not bullish around these upper levels in April. My analysis is: - 
short-trade below 3768 on a higher Weekly open, as there is an 
expectation of a reversal down.

A reversal down can move as far as the Weekly 50% level @ 
3611…

However, after a 2-day reversal into the 5-day 50% level, if price is back above 3768 then it’s going up towards 3845.

*As a day-trader, all i'm interested in is taking 'chunks' out of the ATR. I couldn't give a rats fanny where the market is going.

I don't care if tomorrow goes up or it goes down, I just want to be on 
the right side of the move.*

*Next trade tomorrow.*


----------



## Bobby

Good post Frank  

Just curious of how you handle chop whilst trying to take those chunks out of the *ATR*  ?


----------



## MRC & Co

Frank D said:


> *Trading is all about support-resistance and trends*




Remember writing this down when you first said it many pages ago, I liked it, and I believe it.


----------



## MRC & Co

MRC & Co said:


> Remember writing this down when you first said it many pages ago, I liked it, and I believe it.




Infact, here was the core of what I wrote down, after researching and practicing as many methods as I could, it rings true from what I finally concluded:

_*Trends, Support and Resistance is what the trader needs to focus on, and money management. *

If the weekly timeframe closes on its highs or lows I always look for a rotation back into the 3-day lows or highs (swing) trade. I want to sell higher opens and buy lower opens depending on the trend.

I also like trends to develop from lower weekly opens, not higher weekly opens as is the case this week, and I also like major trends to develop from lower Monthly opens, not higher monthly opens, as is the case this month.

As the old adage goes buy low, sell high._ 

Thx Frank, everything to learn from that simple quote.


----------



## Frank D

> _ I also like major trends to develop from lower Monthly opens, not higher monthly opens.....as the old adage goes buy low, sell high._




And that’s why I said earlier…. I don’t want to be taking positions on 
stocks again until around lower prices in May.

April is already trading around higher highs, so there is no point BUYing or 
in my case holding longs.

And I want to buy once again around support in a lower 
Month.

I’ve got not idea where price will be in May (actually I‘ve got my 
suspicion where it will be) but my next long set-up is based on that 
simply concept:- buy lower support

I also know that if Price reverses down from these April highs and closes 
below the April 50% level by the close of this month, then my buying 
levels will be much lower.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI Reversing down from a higher Weekly open towards the Weekly 50% 
level @ 3611.

This was confirmed with today’s break of the 5-day 50% level.

Expectation on the break is for price to continue down towards the
 5-day lows.

That could happen today, or the SPI might rise up from this spiral low 
and retest the break before it continues down, but the market path is
 to move lower this week.

Weekly 50% level is a target, and often this level can support the market 
if trend is rising upwards.

But analyzing the trend, price is in the process of rotating down 
towards higher timeframe 50% levels, and in fact we could have a 
*top-to-bottom trading week (lower Friday close Random length).*

Therefore if you were a swing-position trader, you would wait until
 the Weekly timeframe closes on Friday, and then verify any higher 
timeframe support using a lower Weekly open next week.

A lower Friday close has a random length, which could easily see the 
SPI continue back down into the April 50% level @ 3495.


----------



## Trembling Hand

No trading Friday Frank. Week ends tomorrow.


----------



## Frank D

TH,

I realise that. Easter

I was just pointing out the 'lower Weekly close' and then a 'lower weekly open' patterns using support for swing traders.

cheers, and have a good Easter
Frank


----------



## Frank D

*SPI Weekly and 5-day pattern*

*Yesterday*:- SPI moved down into the Weekly 50% level @ 3611
 and has followed the swing back into yesterday’s break:- *retest and reject pattern.*

If I subscribe to the rejection pattern then the SPI should continue to 
move down towards the 5-day lows: - minimum move 41-44 points 
from today’s highs.

Rejection pattern is also part of a lower Weekly close:- top-to-bottom close.

If the Weekly 50% level is valid support there could be a higher close or 
at least fill the upside gaps in late trading

That can come from price finding support around 3638 and then 
swing upwards from a lower spiral point or a break and Hook above 
3680.

I’ve modelled two scenarios: - down into the 5-day lows or 44 points.

Or a swing back to close the gaps in late trading

*But I’m only trading one:- *short @ 3680 because that fits in with the 
5-day pattern at this stage.

And *I’m not interested I trading longs today*,  but I know if price moves above 3680 
during the trading day shorts are open to risk.

Also a *Spiral-Point Low *could result in an inside day to close out the week or a higher daily close.

*I'm taking the money and running and early Easter break*

*Happy Easter everyone.*


----------



## Frank D

*SPI Weekly amd the 5-day patten*

SPI moves down from 3680 into 3638.

Buying support off 3638 resulting in an inside trading day to close out
 the Week.


----------



## Bobby

I'll try to get a response  from Frank .

Previous question ( Just curious of how you handle chop whilst trying to take those chunks out of the ATR ? )

New question ~ same theme 
At what point after your entry do you jump when it goes wrong or do you just go for your predetermined target  ?

I traded todays up trend , got a nice bite out of it  :brille:

Your statement today was  - ( And I’m not interested I trading longs today, but I know if price moves above 3680 
during the trading day shorts are open to risk. )

 Would Like to be a fan Frank


----------



## Frank D

Bobby said:


> Just curious of how you handle chop whilst trying to take those chunks out of the ATR ?




If I’m trading support or resistance I’m expecting price to move away (chunk 
of the ATR) so there is no ‘chop’.

The only ‘chop’ occurs when you are trading price that’s not near support 
or resistance. I don't look at minor indicators

The ATR of the SPI might be over 80points, but more often than not 
the price movements of the SPI move in 44-point waves *(the chunk). *So that’s my focus

If the SPI has moved *44 points in 1 direction the market can often 
reverse in the opposite direction if it aligns with support or resistance*,
 as was the case on Thursday.

If support/resistance breaks then you are stopped out.

*Thursday's resistance 3680  & Support 3638*

I Personally run 7 point stops around those levels.



Bobby said:


> At what point after your entry do you jump when it goes wrong or do you just go for your predetermined target  ?




I normally trade partial exit strategies where I take the first contract out 
at 10-12 points and move stops to breakeven from entry....

And let the market run depending on my view: - exit is 
often around 40 points or less, and on occasions the last contract is left to 87 points. (2x44 points)



Bobby said:


> Your statement today was  - ( And I’m not interested I trading longs today, but I know if price moves above 3680
> during the trading day shorts are open to risk. )




I wasn’t bullish today based on the open:- higher open and trading 
below resistance @ 3680.

I was only bullish once price completed the move down into 3638, as
 a potential short-term UP move:- 44 points.

But doesn’t mean that today wouldn’t go up, if price opened or was 
trading above 3680, I just wouldn't have traded longs.

The same can be said around 3638 on the lows….

Trading shorts around 3638 was open to risk, it doesn’t mean the market won’t go lower.

*But the trader has three options:- *

1) cover shorts and sit out *(what I did)*

2) Partial exit shorts and run breakeven stops from entry, if expecting the market to go lower.

3) or take longs as price is rising up from support (3638) and a 44-point 
rotation upwards *(what others did)*

Because on Thursday that's where those levels were.

The Market is dynamic, so what's support or resistance today won't 
be support or resistance tomorrow.

*And that's all it is, being on the right side of support or resistance, 
trading as close to support and resistance as possible, and taking chunks 
out of the ATR.*


----------



## Bobby

Hello Frank ,

Liked the way you answered my questions , straight to the point clarity .
So its a thumbs up from me  , thank you .  

Regards Bobby.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI continues higher this week confirmed with today's open and the
 break
 in the 5-day pattern.

Nearing the Weekly highs @ 3787, but leaning to a move towards 
Tuesday's highs.

No short-trading today even around the highs


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI continuing higher this week following the 5-day pattern, along with
 the view the market is moving towards the April’s highs @ 3845.

Yesterday started with the break and hook pattern above 3739 
upwards.

Today followed early support @ 3780 pushing the market higher into the 
5-day highs @ 3810.

There is still a Gap on the downside to be filled @ 3692, but looking at the
 US markets I’m leaning towards another Up day on Thursday….

Simply because US markets are currently trading above their 5-day 
50% level, and is following a 2-day reversal pattern down 
(Monday-Tuesday) and a 3rd day UP move (Wednesday).

Normally Thursday continues higher towards the 5-day highs, without too much weakness.

If that’s the case then the SPI should hit April highs @ 3845 by tomorrow.


----------



## Bobby

*Well frank if it hits 3845 tomorrow I'll be buying your book  *


----------



## Frank D

*S&P Weekly and 5-day pattern*

higher Thursday move....

SPI reaches its April highs 3845 in the Weekly timeframe

Bobby,

I accept direct deposit if you wish


----------



## Frank D

*SPI Weekly and 5-day pattern (24 hours)*

April highs reached with precise tops on Friday @ 3852 in sycom.

That completes my 2-month wave pattern from March lows.

This could be the high or it might not, as any reversals down need to
 be verified within the 5-day pattern....

But of course I'm leaning towards reversal patterns towards the Monthly 
50% levels in MAY.

I won't have another long-term view on the SPI until the end of this 
month.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Selling coming into the market after testing the highs in the day session.

As per Morning report:- random support @ 3792-96 on Friday.

Not interested in trading longs off support.

I'm interested on breaks of the channels lows next week and the 
5-day 50% level on any further weakness.


----------



## Bobby

Well done Frank !
Traded some of your action today    Thanks  ..

Can you direct me to information about your books please .


----------



## Cartman

Bobby said:


> Well done Frank !
> Traded some of your action today    Thanks  ..
> 
> Can you direct me to information about your books please .




Agree --- good calling Frank ---- and you do it on a regular basis !! 

Enjoy the book Bob ---- even if you dont use Frank's ideas specifically, i think you will find his concepts refreshingly commonsensical and useful ----- 

and no im not on the payroll !! ----- but im open to bribery 

(and my fees are very reasonable   ---------- now whats 50% of nothing ----


----------



## Frank D

*S&P Weekly and 5-day pattern*

The SPI has reached my upper levels for April and my view is that 
price should start to unwind and drift back towards the Monthly 50% 
levels.

In the US it’s a different story, as prices are still short of those April highs,
 so there is a trend bias to continue higher (at this stage)

 Therefore in the US it’s still about rising trends and patterns within the 
5-day range: - rotation and extension (until the 5-day lows break)


----------



## Frank D

*SPI Weekly and 5-day pattern*

This is a perfect example of optimizing a trading model/methodology based
 on trends within a multi-timeframe model:- support & Resistance.

I’ve been bullish on the Market until Friday’s highs.

Now my view is that price will try and rotate back down into the Monthly
 50% levels.

*As pointed out the first sign is a cross-over of the 5-day 50% level.*

This occurred with today’s shift @ 3783.

Price is selling down, as part of a Thrust pattern:- moving away from the 50% level.

When bullish I would BUY support (3759).

Because I’m not bullish now, I would use support as a partial ext level and see if it breaks.

If it breaks then my view is it’s moving down towards the Weekly 50% level and could go as far as Monday’s lows (3716)

Just run breakeven stops from entry, as an R44 low could also attract buying, but I’m not trading longs today.


----------



## Frank D

*SPI monthly charts 2002-2003*

Below is a chart in the last bear market in 2002- 2003

1. We can see the 3rd Quarter breakout and the 2002 Yearly low breakout.

2. Extension down into the 4th Quarter low and reversal upwards.

3. First Quarter 'Top' and collapse into the Yearly lows in 2003 (March lows)

3. The lows in 2003 were the exact Monthly lows based on my Model. 

I remember that exact day vividly in 2003, screaming BUY.

~~~~~~~~~~~~~~~~~~~~~~~~

March lows in 2009 and Friday's recent highs @ 3852 is a mirror image of 
the same patterns in 2002-2003.

I’m not saying the same thing is going to happen, but at this stage 
I'm treating the market the same way, simply because my view is that
 the Yearly lows have to be reached in 2009.

If the exact same pattern plays out now as it did then, then low 
should be set in June, and I’ll know where that exact low will be.


So far Friday's tops and reversal down, along with US markets
 selling down on Monday, traders need to be alert to how things can change quickly and if the same pattern repeats.

But it's not until prices are trading below the Monthly 50% level that 
things begin to look grim for those who bought stocks at the recent
 highs.

*Any trend is dependent on price remaining above the monthly 50% levels*, 
as we can see back in 2003, and at this stage I can't discount that the 
50% levels actually support the market in this quarter and then 
continue higher in the following Quarter.

But i'm still leaning on the Yearly lows being reached: approx 2780


*And if that Happens i'll know where that next 'Screaming BUY' will be again.*


----------



## Frank D

*SPI Weekly and 5-day pattern*

Friday topped the market @ 3852 and Monday confirmed the reversal
 of trend with a move below the 5-day 50% level @ 3783.

That pushed price down yesterday into the Weekly 50% level @ 3732 
finding support, and today continued down into the next level @ 3663 
finding the
support along with the 5-day low.

I have a view of lower prices in April (back into the Monthly 50% level), 
and as per my above post I’m extremely bearish but I need certain things
 to confirm any larger down move (break of the Monthly 50% level), and
 at this stage there hasn’t been a break of the 5-day lows yet.

The Market has been dynamically moving lower following the 5-day 
patterns without a break, therefore price can rotate upwards from 
support and move into a *2-day consolidation pattern*.

If US markets have an UP day on Tuesday, then my view is to see how 
the next two days of trading plays out:- Wednesday and Thursday. 

*If price remains range bound between 3663 and 3732, then I’m looking
 for the next SELL pattern on Friday (larger trend play), or early on Monday
 to continue the move down towards the Monthly 50% levels*

Of course using confirming patterns within the 5-day range.


----------



## beamstas

Very Nice Frank
Silently following with interest 

It seems you are quite bearish of the SPI in the near future

What sort of hit rate do the 50% retracements have? Does it happen often?

Also noticed you change your chart colour most days.. very stylish good to see you are keeping us silent readers on our toes 

Brad


----------



## Frank D

beamstas said:


> What sort of hit rate do the 50% retracements have? Does it happen often?




Brad,

The shorter the timeframe the more it's going to Hit. The larger the timeframe then you'll looking once per Quarter.

I don't have any stats, I'm just a chart reader.

*SPI Weekly and 5-day pattern*

US markets moved up on Tuesday, therefore my expectation was 
a consolidating trading pattern over Wednesday & Thursday between
 both Weekly 50% levels with an UP bias

My next short set-up and continuation down is based from Friday:- 
higher Daily open using resistance as a ‘short’ set-up. 

That will depend on where the Market opens tomorrow.

It could have aligned today using both the Weekly (3732) and 5-day 50% levels and today’s spiral tops… *(not a higher Daily open)*

But instead of reversing down as was the expectation a number of day's
 ago, that wasn’t going to happen once the R44 range closed above
 the channel highs @ *3723, resulting in a HOOK an break pattern.*

Tomorrow is Friday and I'll see if there is any ideal Short-trade set-ups to take.


----------



## Frank D

*SPI Weekly and 5-day pattern*

3-day sell cycle on a higher Daily open today:- opens below yesterday’s highs @ 3753.

*This is part of my Friday Sell pattern.*

But it had to be confirmed with price trading *back below 3738.*

This was confirmed with a HOOK pattern:- retest 3738 and rejection down.

_Now how far is Friday going to sell down?_

*Note:- *3689 is random support, but I won’t be trading longs off this level. It’s a near exit zone.

If Friday ends up a trending down day it can break support and 
continue towards the 5-day lows:- as part of a lower Weekly close 
and Friday sell pattern by Monday.

Or

If Friday ends up a consolidating then it will swing up from support and
 move into a sideways pattern and hopefully continue down from Monday.

At this stage I’m not factoring in an UP day or higher daily close whilst
 below 3738, and I won't be trading longs on any BUYing, as it's not
 part of my set-up to trade longs today.

But doesn't mean there won't be any after buying after 3pm and this
 set-up fails, simply because I would have expected more Selling in 
the market by now.


----------



## Frank D

*SPI Weekly and 5-day pattern*

3pm buying off support and reversal back upwards...


I haven't factored a down day in US markets on Friday, because of 
the Weekly HOOK patterns which normally have higher Friday closes....

Looks like a higher Daily open on Monday.


----------



## Frank D

*S&P Monthly and Weekly*

US markets continue to push higher and aren’t trading anywhere 
near Resistance (April Highs) compared to the Aussie market reversing 
down from the April highs @ 3852 looking to move back towards the 
MAY 50% level.

*I mentioned this a  few of weeks ago….*

_"Rising Weekly ranges but shorter in length and coming 
into the last week of this Month.....especially if there is any break of the 5-day lows...."_

This week is the last week of the month and there isn’t anything to 
suggest that there is going to be a sell off.

In the *Chart on the Left *we can see the Weekly bars continue to 
close higher on Fridays and trading above the Monthly 50% level.

In the *chart of the right* we can see price remains supported above
 keys levels:- Weekly 50% levels.

*But what do we notice?*

 I developed a pattern that alerts traders to a change or loss of 
momentum when price isn’t trading near resistance; *it’s called ‘DROPS’*

This is where the Weekly highs suddenly drop below previous weeks
 where they are constantly making higher highs.

I've highlighted *Weekly Drop and Monthly Drop* patterns previously, which often see a
 reversal of the Timeframe 'BAR' closing in the opposite direction of the current trend.

This currently alerts me to a probability pattern that doesn’t favour a higher
 Friday close this week, but a lower Friday close: - Random length.

It just basically says…. if you are in a winning ‘short’ position and it’s going
 in your favour, then there no reason to cover positions until the end of the Week.

That just could mean a lower Friday close, which could see prices 
rise upwards once again from next Week:- lower Weekly open and new 
Month starting from MAY 50% level:- Support and continuation upwards.

Or it could result in a lower Monthly close below support:- bearish.


----------



## Frank D

*DOW Monthly and Weekly*

US markets continue to push higher from the April 50% levels and 
aren’t trading anywhere near Resistance (April Highs).

We can see those Resistance levels drop down considerably in MAY:- expected resistance.

This week’s push upwards into the Weekly highs, and now I’m looking
 for a lower Friday close: - random length.

As long as price remains below this Week's highs @ 8190.

The best I can hope for in the short term is a pullback into 7918.

*7918 is my trend guide for early MAY (Monthly balance point confirmed with Thursday's close)*

And it’s simply about trading either side of this level.

Either the DOW and S&P kick upwards towards their MAY highs, as it
 follows the two month wave pattern upwards.

Or price drifts back down into the MAY 50% levels. 

*Footnote:- * 

Dynamically the US markets are different to the Aussie, as the Aussie 
has been capped under it’s April highs for this Month, but isn't dropping because US markets 
continue to creep upwards.

If US markets continue higher in MAY, the April Highs (resistance) will disappear and shift higher 
in MAY for the Australian market.


----------



## Frank D

*SPI Weekly*

Last day of the Month, and it's probably higher than I expected.

Since the April highs have reached 3852, the Monthly level @ 3778 has
 been playing a major resistance zone, but it's not going  lower if US markets continue to creep upwards.

*As we can see the shift in TIME, and all levels dynamically move foreward, 
so what is resistance in the month of April is less likely in MAY.*

Tomorrow's Monthly balance point @ 3723 is my trend guide for MAY. I'm 
still expecting a retest of the MAY 50% levels, but if its' not below 3723 
then at this stage the market is going higher.

The only chance of a Friday sell down this week is, if the SPI opens 
below that Monthly balance point tomorrow, and at this stage that's 
wishful thinking if US markets don't have downside follow through 
after Wednesday's highs.


----------



## Apollo_kk

Frankie

Bought your book and love your work.  Learning heaps.


----------



## Frank D

*Australian Index XJO*

All global Index markets followed the same pattern of rising up from the MARCH lows in 2009.

Once that low was in my view was for a swing back into the April highs.

The Australian Market hit a precise top in April and stalled: resistance.

Once that high was reached I became bearish on the Australian Market

The reason why I have the view is because all major  bear market 
bottoms reach their Yearly lows in the following year to verify the low in
 the Primary Trend and then the market normally continues higher.

That's what happened in the US markets, their Yearly lows were reached.

*For the market to continue down into the Yearly lows, the close of 
this month had to close below the April 50% level*. This would have 
resulted in another push down into the Yearly lows to finally complete the bear market low, which was the same  pattern in 2003.

Even though I became bearish after the April highs were reached and 
the market hasn't moved above the April highs since, I still wanted to
 see where April closed to give me an idea about how the market might 
play out over the next couple of months.

*Those April resistance levels have now moved and are higher in MAY:- 2X Month Wave

Because April has closed above the 50% level, my view now changes to a 
2-month sideways pattern between the Monthly 50% levels and the 
Monthly highs.*

If the market remains stable above those Monthly 50% levels this 
Quarter, then there is a potential 3rd Quarter higher move back towards 
the Yearly 50% level:- 4400+

That will depend on where price is in relation to the 3rd Quarter 50% level.

However I still want to see price come back down and test the Monthly
 50% levels and verify support in this Quarter before the Market goes higher than those MAY
 highs


----------



## Frank D

*SPI Weekly*

April resistance levels have shifted higher in MAY, and whilst price was trading above 3740 expectation was to continue higher.

I expected higher prices in MAY, but didn't expect price to reach these 
highs in 1 trading day.

SPI back around the monthly levels:- 3891 is the equivalent of 3778 in April.

With any extended higher moves in MAY towards those MAY highs @ 3967.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI Trading around the Monthly highs.

Around these highs there is an expectation of resistance and a rotation 
back down towards 3740, as a first step rotation down.

*Today's price action of a reversal down on Wednesday and into support 
is part of a normal pattern that often occurs.*

As pointed out in the Book:- 

Whenever there is a breakout of the 5-day high (Monday @ 3849), 
more often than not price will reverse back into the break, and validate 
the break and then continue with the Trend...(higher)

If the market is going to continue higher then 3844 is the level this week.

But because price is already near the Monthly highs in MAY:- 2-month 
wave pattern... (3967)

You need to ask yourself.... how much more can the SPI continue higher 
in MAY.

If this 5-day breakout pattern was occurring in the first month and
 just above the Monthly 50% level, then you are going to have more bang
 for your buck buying this level and holding into the end of the Week
 or higher Monthly ranges.

Today's it's a bit riskier, but US markets are still short of their MAY highs but getting close.

*5-day low dynamic low channels are my trailing guides on this current 
up trend in MAY and around these resistance levels*


----------



## Frank D

* SPI  Weekly, 5-day pattern, and S&P Weekly*

SPI continued higher from Yesterday's swing lows

*And reaches MAY tops @ 3950, matched with Thursday's highs @ 3950*(Sycom MAY highs 3967)

In fact a lot of markets have reached precise MAY highs today.

*S&P 500 @ 917 (chart Below)*

AUD .7535
OIL  .5688
GBP  getting there @ 1.5201

DOW still short @ 8525 (Wednesday breakout)

These are seen as resistance levels, but always things need to be 
confirmed on any continuation down, especially in US markets.

*Break of 5-day support*

Some markets need confirmation because most of those that have 
reached these highs in MAY have broken out of their 5-day highs on 
Wednesday (Not the SPI)....

S&P breakout
DOW breakout
OIL breakout
AUD breakout


This could see a push up into Thursday's highs, so I would still need to 
see short-term support zones fail within the 5-day patterns to finally get some rotation downward this month.

A rotation downward into support is still part of my view, but I think markets are going higher in the 3rd Quarter, espescially US markets


----------



## prgudula

Hello Frank,

Thanks for update. Do you think we have missed the long term position to enter the market? or wait for some more time!

PG


----------



## Frank D

*DOW S&P 5-day pattern*

Wednesday break and extend into Thursday's highs.

Thursday's highs reversal patterns occuring fram MAY Highs.

Partial exit at these levels and see where it closes, as Wednesday's highs might continue to play a support role....

However, Ideally a move back down into Support levels would be nice.

Same break and extend patterns From Wednesday into Thursday on all 
the markets today, so it will be interesting over the next day or so on
 how things unfold.

I already have my views.

~~~~~~~~~~~~~~~~~~~~~~~

Prgudula,

You've missed a portion of the trend from March lows, but there are always opportunties to enter the market in each Quarter.

Need to be patient and determine your support.


----------



## Frank D

*DOW S&P 5-day patterns*

Thursday's reversal down into intra-day support.

I'm looking for more weakness, but I need to see support finally fail to get  more unwinding in MAY.

MAY highs have reached, therefore my view changes to the market 
being exhausted on the run up in MAY as part of a 2xmonth wave pattern in the 2nd Quarter.

Friday's shift in support might give more hints.

Weekly Report out tomorrow will give my view on markets in the 3rd Quarter and potential rises.

I just want to see double bottoms that match April lows (around the May 50% levels) before another leg up.

*As long as price is trading above the higher timeframe 50% levels, 
then the bias is to continue higher.*


----------



## Frank D

*DOW S&P Monthly*


As per Book:- *Model & Methodology*

US markets have reached their 2009 lows matched with the Monthly lows 
in March, and have continued up into MAY highs.

2009 completes the 2nd Yearly low:- Bear Market Bottoms

Most bear market bottoms follow the same pattern, except in the case of 
the Aussie market, fell short but is following regardless.

There is a larger Trend in play  (Primary Timeframe), which is my view in the
 3rd Quarter :- continuation back into the Yearly 50% levels in both markets.

Therefore there is still more room to move on the upside in 2009

However, I would like to see global markets come back and at least 
find support in this Quarter, verify support (double bottom 2nd Quarter) 
and then continue up towards the Yearly 50% levels in the 3rd Quarter.

*Aussie Market Chart Below*

I would hate to think that markets continue to climb towards the Yearly 
50% levels, clinging to each Monthly high as they dynamically move 
higher each month, as what is occuring in the Aussie market at the moment. (chart below)

But that's also because US markets needed to complete the move into the MAY highs

As long as prices remain above the Monthly 50% levels, then it's following 
the Primary trend and rotating back into the Yearly 50% levels....

And that's the only view I have at stage.

Once it get to those levels I'll find it hard to see markets going higher in 2009.


----------



## Frank D

*SPI Weekly and 5-day pattern*

US markets reached their MAY highs with higher weekly close, and we 
start this week with a higher Weekly opens and selling down from the 
MAY highs:- resistance

Yesterdays break of 3935 in the 5-day pattern and then the 
spiral top:- test and reject during the day, has set up the first sign that 
we are beginning the ‘unwinding period’ after this double monthly 
wave pattern  into Resistance:- MAY highs

The Weekly 50% level @ 3856 is now the trend guide for this week, with 
the expectation of further downside moves in MAY.

If 3856 ends up supporting the SPI over the next 2 -days, then I'll look 
for another 'short-set-up' from Thursday (Higher Daily open)


----------



## Frank D

*Aussie Monthly and Weekly*

First stage of the pullback has completed with the reversal down into 
3740, and we are back to where MAY's UP move began.

2nd stage of the pullback is for the SPI to come down and retest the 
MAY 50% levels to verify how robust this Secondary trend is.

My view remains that the SPI is heading UP towards 4400 in the 3rd
 Quarter, but the month of MAY needs to hold and close above support.

If the month of MAY closes below support then the Aussie market could 
end up fullfilling its Primary down target in 2009.


----------



## Frank D

*SPI Monthly and Weekly: Day Session*

Even though I'm expecting lower prices in MAY.....

Today should be about trading and filling the 'gap' in the day session.

The SPI has struggled to move more than 44 points in a day session, so
 'gap' fill might come in Sycom or 3pm buying.

As long as price remains above 3740 today, that's how I will be trading it.

US markets should have sold off more on Thursday, so my hunch isn't
 a lower Friday close, it's a Weekly close around the midpoints.

If that happens then I would be using next Weeks 50% level as a trend 
guide if there is going to be another push lower next Week.


----------



## Frank D

*SPI 5-day & Spiral filter*

This morning I was bullish based on the 'gap fill' pattern

Today’s up move started with price opening above 3740, but has 
stalled around Wednesday’s  breakout @ 3785 low :- retest the break.

My hunch tells me that there needs to be a ‘gap’ fill in the market before 
any further downside plays out in MAY, but at this stage that doesn’t 
look like happening until either very late today or sycom at best.

*I wanted to trade longs on open but nearer to 3740 so I missed 
trading longs as the market opened too high and  I didn’t  chase 
price upwards…*

Instead switched to trading shorts, due to the Spiral filter and the 5-day break pattern. @ 3785:- random resistance.

The SPI has struggled to move  more than 44 points in the day
 session, which isn’t uncommon, as most moves occur during sycom, so
 these trades are based on the range moving down 40-44 points and not 
up this afternoon.

*Either 3pm buying comes into the market taking out my stops and 
continues into the gap fill pattern, or follows the spiral pattern down* 

At this stage I can’t trade longs around these levels as I don’t have a 
set-up to trade longs unless the SPI  moves down in afternoon trading.


----------



## Frank D

When you analyze the larger trends of the market you make 
certain conclusions based on Price moving from one level into the 
next:- *Support into Resistance and back into Support.*

Either support and resistance holds, or it breaks and a new trend 
develops.

There are larger trends in play, and then there a lesser trends that ebb 
and flow between those levels on a  Weekly & Daily basis.

I’ve always said that there is probably 1 maybe 2 times per week 
that provide traders with the ideal set-ups during the week to capture 
these trending patterns, and the rest of the week most are fighting 
for scraps which is the intra-day ‘noise’ ......

I use certain techniques to trade that noise, but I also realise that the 
'noise' is always at its best if I'm Buying Support or Selling resistance because my entry is at its least Risk based on probability and reliability.


*SPI Weekly (Chart Below) *

Expectation of a reversal down was confirmed with the MAY highs, then 
the break of the Weekly 50% level @ 3856 and the first target reached 
@ 3740.


Once price has reached 3740 on Thursday I was looking for Friday to 
move up into the Weekly 50% level once again, as that would have 
provided another ideal 'short' trade pattern early next week:- *Sell resistance and a higher Daily open*

That didn't happen, and the Weekly 50% level has now moved and 
dropped down next week @ 3789, and this is simply going to be my 
trend guide over the next 5-days.

A down trend should just sell off from this level next week and continue
 down into the MAY 50% levels @ 3589.


If there is a lower Day move on Monday but a higher Tuesday close 
above 3789, this could lead into a *Daily HOOK pattern.*

*
HOOK patterns normally lead to higher Friday closes.*

So we end up with a consolidating Weekly timeframe:- *Lower open and
 higher close, and more noise along the way*


----------



## Frank D

*DOW Weekly and 5-day pattern*

Previous post I mentioned a 'HOOK' pattern based on the position of
 the Weekly 50% level in the Aussie Market on Tuesday.

And that was mainly based on the price action in the US markets and
 the expectation of higher prices early this week.

Lower Weekly open rising up from Support (chart Below) 

Last Week's reversal down from the MAY highs in the US markets 
found support around the Weekly 50% level, and this Monday's UP 
move began from this Week's 50% level:- lower Weekly open

*A bearish pattern would have stalled around the 3-day highs on 
Monday:- White line.*

This would have provided a higher Daily open and short sell the 3-day 
high pattern on Tuesday with the expectation price would continue down, 
as part of the MAY high Resistance....but that's not the case now.

Back to trading the Noise until the next pattern comes along.


----------



## beamstas

Frank,

I just read Brent Penfolds book "trading the spi"
He mentions you in it in relation to pivot points 
Do you discuss this in your book in more depth? It is only touched on lightly in Brents book & i'd like to learn more about it.

Cheers
Brad


----------



## Frank D

Beamstas,

Brent was referring to the information found in my first book.

I’m currently editing my first book because I wrote it during the last
 bear market in 2003 and subsequent rally, and I want to compared 
those patterns with this current bear market.

I do and will go into more depth, but you can see a lot of the information
 in this thread, as it stands.

~~~~~~~~~~~~~~~~~~~~~~~~~~~

*SPI Weekly and 5-day pattern…*

Today’s up move has filled last Week’s gap, and price has the potential 
to continue higher this week, as part of a Weekly HOOK pattern

But yesterday’s rally on US markets and the breakout of the 3-day
 highs (White line), would normally see US markets reverse down and 
retest the break.

That can be a 1 or 2 day stalling/reversal pattern above the 3-day 
highs, which can then lead to a higher Weekly close.

However, a 1-2 day stalling pattern can also revisit the 3-day lows once 
again.


----------



## sails

beamstas said:


> Frank,
> 
> I just read Brent Penfolds book "trading the spi"
> He mentions you in it in relation to pivot points
> Do you discuss this in your book in more depth? It is only touched on lightly in Brents book & i'd like to learn more about it.
> 
> Cheers
> Brad




Brad, I found Frank's dynamic levels seem to work pretty well.  I now use them with other TA and they are quite impressive.  But then I only purchased Frank's latest book, so not sure if they are the same thing Brent Penfold was talking about.

I really haven't got my head around some of Frank's other intraday filters, etc, but at this stage, I felt the book was certainly worth the outlay to understand his dynamic levels.


----------



## Frank D

*S&P Weekly and 5-day pattern*

3-day cycle patterns and applying chart reading skills is based from my 
first book and isn't mentioned in the 2nd, but Tuesday's trading is an example.

Tuesday high reversal pattern down from precise highs and moving down towards Monday's 3-day break @ 897.

Today is the first day of a 'stall' pattern to retest Monday's 3-day high break. 

Next Probability needs to be defined after Wednesday's trading, and how
 it reacts to 897.

It's hard to see more Upside due to the MAY high Resistance levels, but 
at this stage I can't discount it going higher.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Exact same pattern in the Aussie market after yesterday’s break above 
3789 and gap closure from last week

Higher Daily open and back down to retest &  verify the break:- exit and take profits.

*Support & Weekly 50% level @ 3782-89*

Now a bullish pattern will see some support around this level and 
consolidate for the rest of today, and then continue higher from tomorrow.

I’m not expecting a bounce and rally off this level, because my view is 
a  lower daily close:- random length.



Frank D said:


> That can be a 1 or 2 day stalling/reversal pattern above the 3-day
> highs, which can then lead to a higher Weekly close.
> 
> However, a 1-2 day stalling pattern can also revisit the 3-day lows once
> again.




 But keep in mind if it’s a lower daily close, and Support can’t hold @ 3782, then it’s heading back down towards 3740 towards the 3-day lows (3716)


----------



## Frank D

*DOW Weekly and 5-day pattern*

2-day 'stalling' pattern above the 3-day cycle highs has played out, 
with precise movement between the levels of resistance and support.

This 2-day stall pattern above the 3-day highs would normally
 continue higher into Friday:- *retest breakout and verify the level,
 and then price continues higher from a lower Daily open, which is 
Thursday rising up from Support*

But it's hard to have a view of how high price can go in the short-term 
when price is already trading around the MAY highs:- higher 
timeframe resistance.


----------



## Frank D

*SPI Monthly (24 hour) *

MAY high Resistance and continue to look for a pullback into the Monthly
 50% levels.

I have an expectation of higher prices in the 3rd Quarter, as long as 
the market remains above the 50% levels.

With 1 week to go until the end of the month, my 
ideal pattern would be to see the monthly timeframe in MAY close around 
the 50% levels.

If that's the case then the ideal pattern would be a lower Monthly 
open around support and then have a 4 week pattern upwards and into
 the 3rd Quarter


*If Support breaks and closes below, then adjust to the market.*

The Highest probability of a level failing is most likely in the last week of
 the Month, so it's imperative that MAY doesn't close below support.


----------



## Frank D

*S&P 500 Weekly & Monthly*

With US markets rising up from Weekly 50% level support, and 
probably heading towards the JUNE highs with only a few days left in
 the month of MAY.

MAY resistance disappears and shifts higher in JUNE.

It doesn't look like my ideal pattern of retesting the Monthly 50% 
levels before the next UP move is going to happen.

My longer term view remains that prices are rotating UP towards the Yearly 50% levels in 
2009.


----------



## Frank D

*DOW Futures:- Weekly and 5-day pattern*

US markets continue higher from Weekly support and closing on MAY 
high resistance on the last day of the month.

Resistance now disappears and shifts higher, as part of a larger rotation
 up towards the Yearly 50% levels.

Ideal long set-ups on Friday, as part of Weekly Hook patterns and 
higher Friday closes using the 5-day 50% level.


----------



## Frank D

*SPI Weekly (Day session)*

SPI continues higher with another push up at the start of the Month.

*Short-term target 3941
Medium term target 4042 (June highs)

Longer term target 4400 (Yearly 50% level)*

Today:-  5-day breakout today @ 3859 should continue higher into Tuesday and complete the short-term move @ 3941.

*Note*: - longer term target can move towards 4400 in a text book 
fashion following the monthly patterns, as what has occurred in March, 
April, & MAY

But it can also continue to drive upwards, and breakout of JUNE highs 
and complete the move into 4400 quicker than expected, simply because 
the Financial Index hit MAY support levels last week.
*
Trend & support guide this month should be 3822.*


----------



## Frank D

*SPI Weekly and 5-day pattern*

Yesterday there was a breakout of the Monday highs, along with 
the expectation that price would continue up into Tuesday’s highs 
around 3944.

There is a larger monthly trend pushing prices higher towards 4042, and 
as explained can go higher.

Whenever there is a breakout of the 5-day range (Monday), the 
normal pattern is that over the next 1-2 days price comes down and retests 
the break @ 3873 and then continues upwards.

*That should have started @ 3944, and it did with a 20-23 point
 reversal down.*, but it didn't follow through

However, you know that you are fighting a losing trend today if it breaks 
out of 3965.

*Text book pattern is move down and retest the break.. but Monthly 
trend is to continue up towards 4042+*

You just don’t fight the trend above 3965 today, as it's going higher.


----------



## Frank D

*SPI 5-day pattern & spiral filter*

SPI trading above 3965 on Wednesday.

Whilst above 3965 price can continue towards 4021 as part of  the move towards 4042 (June highs) by Thursday.

However, the 5-day pattern has changed from trading outside the 
channels to back inside the channels @ 3988, which can often lead to
 price rotation.

That was part of my view from yesterday, a move down over the next
 2-days to retest the Monday’s break or the 5-day 50% level @ 3897.
*

Therefore 3988 is the trend guide either way.*

The move up into 3988 and pull back down into 3965 today often suggests 
that yesterday’s breakout has become valid support, and now 
should hopefully continue higher:- retest the break and continue 
towards Wednesday’s highs @ 4021

Using my spiral filter patterns I’m just simply trading on the side of 3973 
and the risk level , and at this stage the bias is to continue higher but it needs to clear 3988,

And as long as I partial exit around this level and money manage the position either side of 3973.

Therefore I'm trading an each bet on Wednesday, either it goes up towards 4021, or it goes down after 3pm.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI nearing June highs @ 4042, which completes the medium term move 
this month, with a larger move still in play (4400)

We have a Weekly trending range since the start of this week, and
 the thrust pattern upwards from 3822 along with a number of 
'high probability patterns' in the 5-day range.

And Today was another.

SPI opened lower than expected today under 3965 but  it eventually 
played out precisely, as part of the JUNE move towards 4042.

The move into 3988 and then the push back down into 3965 to verify 
the breakout, and then once above 3988 there was only 1 way to go, 
and that was UP into Wednesday's highs @ 4021.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Usual 5-day rotating patterns after moving into yesterday's highs @ 
4021.

Yesterday's trend guide was the breakout above 3965 but confirmed with 
the move above 3988...

And today's reversal pattern was simply using the exact same level @ 3988

*Footnote*:- All good trends revisit the 50% levels and then 
continue with the Trend. 

It's now up to US markets to see whether price moves into 4042 and June highs, or continues the rotate down towards 3822 again.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Looks like June highs will be reached Today


----------



## Frank D

*XJO Monthly (CASH MARKET)*


Futures market failed to reach the JUNE highs @ 4042, whilst the CASH Market has hit the JUNE highs and stalled.

Higher Weekly open and around resistance can see a pullback towards 
3796.

The strength of the trend in the 3rd Quarter it going to be dependant on 
how price reacts to this level over the next few week.

I'm still bullish on the market towards 4400, but if the SPI is trading
 below this level come July (3rd Quarter).....i'll have to reasses the market
 in the 3rd Quarter as a multi-month sideways pattern


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI heading back towards the June highs.

After a 2-day consolidation at the start of the week, which didn't see 
much downside, today's move above the 5-day 50% level @ 3974 set up
 a rally into Wednesday's highs.

Last 5-day high reversed down, helped by US markets having a down
 night...

But this time I'm not factoring in a down day in the US, as they go
 looking for their own JUNE highs.


----------



## Frank D

*SPI Monthly (24 hour)*

SPI June highs reached in sycom @ 4088.

Day session highs 4042

Based on repeating patterns I would begin to look for a rotation back 
down into the Weekly 50% levels next week.

If the SPI is going to reverse down today and not have a 'higher Friday close' :- breakout.....

It should remain below 4070 today with a max move towards 4008 
(5-day 50% level) on Friday.

However, i'm leaning to the SPI being supported once again around 4029, as 
it was yesterday, and any continuation downward will be dependant on US markets on Friday and the direction they take.....

Eventually US markets will have to pop out of their tight sideways 5-day 
pattern either way.


----------



## Frank D

*SPI monthly and 5-day pattern*

As per morning report, *4070 was the critical level on taking shorts today...*

This was based on breakout and extend pattern from 4028 into 4070.

A bearish pattern will complete an entire 44 point rotation into 4028 
and continue down into the 5-day 50% level @ 4008.

Bullish price action would see support around 4042, and a reversal 
and breakout above 4070....

If that happens then there is a Friday upper move in sycom around to
4116.

But at this stage I would focus on price heading down towards next 
week's Weekly 50% level, and run stops accordingly


----------



## skc

Frank D said:


> *SPI monthly and 5-day pattern*
> 
> As per morning report, *4070 was the critical level on taking shorts today...*
> 
> This was based on breakout and extend pattern from 4028 into 4070.
> 
> A bearish pattern will complete an entire 44 point rotation into 4028
> and continue down into the 5-day 50% level @ 4008.
> 
> Bullish price action would see support around 4042, and a reversal
> and breakout above 4070....
> 
> If that happens then there is a Friday upper move in sycom around to
> 4116.
> 
> But at this stage I would focus on price heading down towards next
> week's Weekly 50% level, and run stops accordingly




Frank you sound like a god this morning.

EDIT: Sorry, I mean The GOD


----------



## Frank D

skc said:


> Frank you sound like a god this morning.
> 
> EDIT: Sorry, I mean The GOD




Skc,

I just know my levels very well and trade accordingly, and I've said 
it before, I'm a very good chart reader which helps greatly.

But like all 'chart-reading' there's an each way bet:- you've got to know when 
to hold and when to fold within a *multi-timeframe model.*

*SPI 5-day pattern & spiral filter*

Whilst it's below 4070, along with the June highs it's going down into 
the Weekly 50% level.

If the SPI moves up above 4078 this afternoon, there is a good bet that 
the SPI will head towards Friday's highs @ 4105-16.

This time I've got a matching spiral filter, so hopefully this time it 
continues down, but it won't surprise me to see higher prices either.

*Trading above June highs @ 4042:- (day session)*


----------



## Frank D

*SPI Weekly and 5-day pattern*

June high @ 4088 & reversal back down into the Weekly 50% level @ 3953 has played out.

This is the exact same pattern for the past 3 months.

This is the trend guide for this month, but there is still the potential 
that prices are trying to pullback towards the 3rd Quarter 50% levels.

As per Weekly report, the September contracts running at a discount to 
the SPOT, which often sees lower prices, and this was confirmed in the
US markets on Monday with a breakout of the 5-day lows and close 
below the Weekly 50% levels, first time since March lows.


----------



## Frank D

*S&P Weekly and 5-day pattern*

On Monday was the first time in 3 months that there was a daily close
 below the Weekly 50% level and the 5-day lows:- breakout.

And as per 5-day pattern breakouts, they extend down into the next
 Day's lows.

At this stage prices are rotating back down into 3rd Quarter 50% levels in July.


----------



## Frank D

*RIO TINTO*

Since the March lows there was an expectation that RIO was heading 
back towards the Yearly 50% level @ 75.29.

Once it completed the move into the Yearly 50% level  (Stock Report) it 
was time to exit any longs and wait until the 3rd Quarter forms.

The Yearly 50% level can act as resistance, which is also part of 
the breakout pattern in 2008:- retest the break and 50% level in the 
new year:- 2009

The trend of RIO will be defined by the 3rd Quarter 50% level, as was 
the case in 2008.

*We have two plays on RIO for the rest of 2009….*

3rd Quarter UP move towards $94.00

or a down move towards the lower levels and 2009 lows over the next 
3-months

A move down into the Yearly lows is part of the Primary Trend breakout 
from 2008.

*Breakout*:- reversal into the Yearly 50% level and then a 
rejection pattern away from the Yearly 50% level towards new lows over 
the next 2 Quarters.

Two weeks to go until the 3rd Quarter begins and it's simply a matter of trading on the side of the 3rd Quarter 50% level.


----------



## Frank D

*DOW Futures Weekly and 5-day pattern*

Weekly 50% level continues the push downward confirmed with 
another breakout on Monday.

The view is that over the next week or so, price is trying to make its
 way back towards the Monthly 50% level in June/July.


----------



## Frank D

*SPI Weekly and Monthly*

SPI first target on the downside is 3705, with a max move down
 towards 3645 and the June 50% level.

Once these levels are reached, I would look for a 2-3 day up move 
back towards next week's 50% level, which is currently around the 
3rd Quarter 50% level. 

As we can see price is currently trading below the 3rd Quarter 50% 
level coming into the last week of the 2nd Quarter, which is my trend guide.

Any short-term up swing should be based by a small range day, 
and the next day takes out the previous day's high, confirmed with a 5-day 50% level cross-over.


----------



## Frank D

*SPI Weekly and 5-day pattern*

I mentioned yesterday that I was looking for a swing upwards and back towards the Weekly 50% level, using a probability pattern...

*Probability pattern*:- Break of the previous Daily high and the current 
5-day 50% level....

This occured today with the move above 3808...

However, I wasn't expecting today would be the day. I would have if the 
SPI hit 3705 yesterday before this reversal pattern occurred.

Should be interesting over the next few days, as price is trading near 
or around the 3rd Quarter 50% level.


----------



## Frank D

*SPI and S&P 500*

Both the SPI and S&P have moved back into their Weekly 50% levels
 coming into the last day of the Week...

Interesting pattern coming into play with 3 days remaining until in the end 
of the Quarter, and we should get a fair idea about next week's trading 
by how Friday closes in the US..

IF the S&P 500 is going to show some early weakness next week, 
then Price needs to close below 923, and I would then look for a 
2-day rotation back down towards the July 50% level....

Otherwise, there is going to be a breakout of the 5-day high and
 back above the Weekly 50% level....

*Not a good sign in the short-term for any bears..*


----------



## Frank D

*SPI Monthly*

I've been harping on for a couple of months that the SPI is going to go 
higher in the 3rd quarter towards 4400...

I didn't know where the SPI would be at the close of the 2nd Quarter, 
but based on the current price action and trading around the 3rd quarter 50%, there is a 
potential Thrust pattern in play...

*Thrust pattern:- is a trend originating from the Monthly 50% levels in 
the new Quarter.*

However, we first have to deal with next week's higher Weekly open:- 
*Higher Weekly open trading below the Weekly 50% level, would normally 
send the market down 2-3 days,* which aligns with the start of the 
3rd Quarter.

Therefore, it might take another 5-days of trading until next week closes
 to verify any continuation upwards, or whether the SPI is trading either 
side of the 3rd Quarter 50% level.

We will get an idea about any trend direction by price trading either side 
of the Weekly 50% level, confirmed with a 5-day breakout range.

If Price is trading below the 3rd Quarter 50% levels, then any UP trend continuing higher is open to Risk....

And the market could continue to move in another 2-3 month sideways pattern, with a downward bias.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Higher Weekly open around the Weekly 50% level @ 3897 should 
hopefully continue down over the next 2-days

Based on Today's pattern, a move down would be towards 3855-60.

However, I never discount the SPI following the 5-day pattern from Friday's range break @ 3764 towards Monday's highs @ 3827.

but based on the higher timeframes, at this stage I won't be trading 
that move, but trade managing shorts.


----------



## Frank D

*SPI Weekly and 5-day pattern*

_We will get an idea about any trend direction by price trading either side 
of the Weekly 50% level, confirmed with a 5-day breakout range._

Yesterday's reversal in the 5-day 50% level, and today's trading of moving above the Weekly 
50% level and breaking is Bullish...

However, it needs to be confirmed with a 5-day breakout, and at this stage 3927 is viewed 
as resistance.

All this price action that has occured in the 2nd Quarter, and that is currently occuring now in
 the last day is starting to aligned with my view of a 3rd Quarter UP move...

*As long as price remains above 3847:- July 50% level.*


----------



## Frank D

*SPI Weekly*

The SPI reversed down from the 5-day highs @ 3927 yesterday, and 
the start of this month is the first time in 3 months that price has 
opened below the Weekly 50% level.

The previous 3-months price has opened above the Weekly 50%
levels, and the market rallied towards each monthly high:- April, MAY, JUNE.

Therefore the trend guide is 3846 (July 50%) and at this stage it's not looking like it's going higher.

I also mentioned last week… _“that I'll get a clearer view of the 
market after another 5-days of trading and the end of next week to see
 if there is going to be a 3rd quarter UP move...._

That is based on this Friday's close.

For the market to continue up, I would like to see the SPI continue to consolidate around 3846 and open above 3907 next week….

Otherwise the 3rd quarter rise is open to risk.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Another choppy and consolidating trading day above 3846, which is what 
I expected, and 1 more day until this week closes and next week opens.

The critical level on any further upside moves is based on 3907 and 
price consolidating above that level for 2-3 days early next week, and 
I would favour a new move towards July's highs.

I'll change my tune if or when price closes below a 5-day low breakout, 
which isn't that far as they are creeping upwards (3819)


----------



## Frank D

*S&P Weekly and 5-day range*

That answers my view on the 3rd Quarter rise, with Thursday’s 5-day 
low breakout in US markets @ 908.

Slight difference in market dynamics between the Australian market and 
the S&P…

S&P is still trading above the 3rd Quarter 50% levels, whilst the SPI is 
now below.

I pointed out yesterday that a breakout of 3819 on the SPI would
 confirm being bearish, as price is now below all timeframe 50% levels 
verified with a 5-day breakout.

However, early next week I would like to see the SPI swing back into 3819 to 
verify the break, which should align with the 5-day 50% level and go 
from there.


----------



## Frank D

*S&P 500 Yearly*

Ever since the March lows were reached that coincided with the Yearly
 lows in 2009, my view has been a 3rd Quarter UP move towards the 
Yearly 50% level.

This is a technical pattern that can often be seen throughout a number 
of lesser timeframes, which is occurring in the largest timeframe and the
Primary Trend:- breakout of the 2008 extends downward and then begins
 to long journey back towards the Yearly 50% level from lower support levels 
during each of the Quarterly timeframes.

*Complete DOW and S&P Reports*

http://www.usindexweekly.blogspot.com/

*Australian Market (SPI)*

Australian Market will start the 3rd Quarter based on Friday's close 
below, which is bearish.

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


----------



## Frank D

*S&P Weekly and 5-day pattern*

Lower Weekly open and rising up from the July 50% levels :- Support.

I would expect a 2-day swing, with a max move towards the
 Weekly 50% level @ 911.

If the S&P is going to go down, then a higher Daily open using 
resistance would provide the next down move in the market from
 Wednesday:- 

*Ideal pattern:-  short trade a higher daily open using a higher
 timeframe resistance level.*

If Wednesday fails to get sustained selling, (if it's is near the Weekly 
50% level),  and this lower Weekly open keeps
rising up from July's 50% level and ends up closing above the 
Weekly 50% level on Friday, then expectation of further downside in the 
S&P is open to RISK.


----------



## Frank D

*S&P 500 Weekly*

Last Week I was hoping for a 2-day UP swing from July's 50% level so
 that Wednesday would align with the Weekly 50% level and a Higher 
Daily open:- Sell resistance.

Instead price reversed down the next day and is now trading below the 
July 50% level, as are most Index markets in the 3rd Quarter.

I would favour more weakness down into next week's lows, as price is
 below the July 50% level.

If or When price gets that low, then I'd be looking for a potential  UP swing
 a towards the 50% levels once again:- resistance.


----------



## Frank D

*S&P Weekly and 5-day pattern*

I was expecting a UP swing back into the Weekly 50% level, but not on Monday, especially not when it didn't  rise up from the 5-day lows or 
higher timeframe support levels

Monday has closed between the Weekly 50% level @ 898 and the Monthly 
50% level @ 884.

Based on this pattern it is unclear which direction the S&P will take until 
after Tuesday.

I would think Tuesday will try and consolidate between 898 (Weekly 50% level) and 884 (Monthly 50% level).....

And then decide on the direction......

Back under 884 on Wednesday and S&P will try a push back 
downward:- Weekly 50% level failure and back under the Monthly 50% 
level.

or Wednesday/Thursday continues towards 920-928:- monthly 50% level 
and a 1-2 day consolidating pattern above 884, and then price 
continues higher into Friday


----------



## Frank D

*SPI Weekly and 5-day pattern*

Same pattern in the SPI as the S&P, except the SPI was confirmed with 
a breakout of the 5-day highs @ 3769.

The reversal back into the higher timeframe 50% levels played out 
precisely, however the UP move this week had to be confirmed with a
 5-day high breakout, as there wasn't any higher timeframe support to 
swing the market back upwards.

Based on this UP move and back into resistance levels, it is unclear 
whether the SPI will continue up.

Often price will breakout of the 3-day cycle @ 3763, but then move into a
 2-day stall (consolidation pattern) until the 3rd day, before price continues with the trend

Because price is hitting resistance and not above resistance. I favour a 
stall/ consolidation pattern at this stage.

But that will depend on what happens in the US on Tuesday.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Yesterday I had the view that Tuesday would consolidate between
 the Weekly 50% and the Monthly  50% level and the trend direction would 
be decided on Wednesday.

There was a *breakout of the 5-day highs on Monday, so there was 
an  expectation that price would push up into Tuesday's highs and 
then reverse down into the 5-day 50% level, which matched the Monthly
 50% level:- * 'Stalling pattern' to verify support.

Support:- lower Daily open rising up from support on Wednesday.


That pattern played out, but price didn't rotate down into the 5-day 
50% level & support, instead breaking out of Tuesday's highs and now
 moving up into 920.

At this stage the price action in US markets is starting to look like a 
'fake' break of the July 50% level and the trend continuing higher.

But I would like to see Friday close and then use next week's 50% levels 
as trend guides


----------



## Frank D

*Financial Index*

I said a number of months ago that any continuation upwards would
 be based on the Financial Index in the 3rd Quarter.

*We have a breakout of the 2008 lows, a move down into the 2009 lows, 
and price action should now be swinging back towards the Yearly 
50% levels @ 4400+ *

After last weeks push down I thought it wasn't going to play out...

But it now looks like a fake push down and prices now rising above the 3rd quarter 50% levels, which can lead to 'thrust' patterns upwards.

Reporting season in August, and I just don't see any weakness simply 
becasue the current price action doesn't favour heading down.

If markets were going down, they wouldn't 'spring' back above in the
3rd Quarter like they have.

The Financial Index begins to consolidate above 3700 over the next 
5-days, it's a good bet it will go higher.


----------



## Frank D

*S&P Monthly and Weekly*

This week has seen the S&P Rally into 920-28, which was my view on 
any further upside once above the Weekly 50% level.

It was a bummer that this move didn't happen from Wednesday:- lower 
Daily open rising up from support, as previously explained.

I have a larger trend pattern that should take the S&P up towards 960 in 
July (read this weekend’s Report), and probably continue towards 1037 in 
the 3rd quarter

This week’s UP move began from a lower weekly open and a 3-day rally into the Weekly highs @ 928.

A 4th UP day in a row drops considerably, without retesting the 5-day 50% level, even though Friday can close higher.

If there is a push down on Thursday into the 5-day 50% level, then a
 higher daily close (higher high) can still play out and continue towards 
960 (July highs)

If trading the market at this 'top' it makes it hard to go long unless there
 is some short-term pullback into Trailing support levels.

Ideally a 2-day ‘stall’ pattern that aligns with next week’s 50% level would 
be the my most robust pattern for any UP side to continue.


----------



## Frank D

*S&P Weekly and 5-day pattern*

3rd quarter rally with this weeks move back above key higher timeframe levels:- Monthly 50% level

As each day stalled around higher timeframe levels over the past 3 days, 
and normally price would stall and reverse down into the 5-day 50% level 
and then continue higher, traders need to be reminded that each day 
is closing above the 5-day highs.

*A daily close above the 5-day highs is a breakout in the 5-day pattern, and price will
 often continue into the next 5-day high.

If it keeps closing above the 5-day highs, it keeps going up.*

Why is this pattern happening now?

It's part of a higher timeframe *'thrust' pattern*, as all trends orginate 
from 50% levels and push outward. 

And a 3rd Quarter 50% level is a major trend guide that's going to push
 the market, especially when you look at the Primary trend and change of cycles, as shown in 
the Financial Index chart (above)

Thursday is the first day that the 5-day high has stalled price closing below.

But there is still an expectation of a move into 960 in July


----------



## Frank D

*S&P Weekly and 5-day pattern*

On Monday there was an expectation that US markets would continue higher into Tuesday's 5-day highs

There was a high probability 'Short-trade' last night on Tuesday's 
highs, which was right on the Money, except this 'probability pattern' would 
have normally closed down (lower Daily close) and not bounce UP 
from support.

Tomorrow will be 8 days since US markets have retested any 50% levels,
 and Wednesday will begin to hit July's highs.

Monthly highs are normally seen as robust resistance levels, however 
I've mentioned it before:- Quarterly *'Thrust' patterns *can breakout of 
the Monthly range and continue to move towards the highest 
timeframe levels, currently 1037 on the S&P.


----------



## Frank D

*SPI Monthly and 5-day pattern*

SPI Trading around July highs @ 4067. (high 4066)

These Monthly highs have stalled the market over the past 3 months
 and could do the same.

That will mostly likely occur with a 5-day high rejection pattern and price trading below the 5-day 50% level.

That 5-day 50% level jumps up tomorrow @ 4013..

Each monthly high was confirmed by a matching 5-day high, and at 
this stage there hasn't be a test of the 5-day highs this week.
*
Current 5-day highs @ 4067, and matching the Monthly tops*

However, 3rd Quarter Thrust patterns can breakout and continue to move higher.

If price is trading above 4067 tomorrow it will also be above the 
5-day high tomorrow, which normally leads to a breakout and 
continuation upwards.

What do we also notice above the previous reversals down from the 
Monthly highs, and even the March Lows...

They all started from higher Weekly opens (or lower Weekly open in March) and at this stage that's not the case.

A number of critical patterns are starting to line up, which should give 
traders including myself an idea about the direction of the market.

Pullback or continuation of the trend UPwards...


----------



## Frank D

*S&P 500 & SPI Futures*

*Thrust patterns* in the 3rd Quarter 50%  have seen markets
 rally into their July highs without any short-term pullbacks.

*S&P 500 974
SPI 4120*

Precise tops in both markets on Thursday, along with a 'Stalling 
pattern' around a higher Weekly close and July's highs, with next week's
 open the trend guide on any short term reversal pattern

Currently there are 5-day breakouts in both markets on Thursday, so it's 
a bit early to tell whether Friday will reverse down or Friday closes near those highs.

There is still a view of higher prices in the 3rd Quarter, and July's highs
 will dynamically move upwards in August.

We are due for a short-term pullback into the Weekly 50% levels, but I 
have seen 'Thrust' patterns before and they are what they are:- 
Trending patterns.

*Dilernia Principles:- all trends originate from 50% levels and extend outward.*

*All trends end around support or resistance and rotate inward*

*Currently there is a Primary Trend that's rotating inward:- 4400*


----------



## Frank D

*S&P Weekly and 5-day pattern*

Global Markets hit their Monthly highs on Thursday & Friday, but as pointed 
out yesterday, there was a 5-day breakout on Thursday, which 
often extends up towards the next highs, in this case Friday.

Regardless of the levels in the higher timeframes, the larger 
timeframe patterns need to be optimised using 5-day pattern
recognition techniques;- *Dilernia Principles*

Whilst daily patterns and intra-day trading are optimsied using support & resistance along 
with *'Spiral points' & range trading*

We start the next week from a higher Weekly open next week....

*Complete Weekly Reports on Aussie market & US markets.*


http://austindex.blogspot.com/

http://www.usindexweekly.blogspot.com/


----------



## Frank D

*SPI Weekly & 5-day pattern*

As per Weekly report, expectation Monday would try & push up another 
42-44 points into Monday highs @ 4129.

As per Weekly report, any reversal down is now based on Tuesday’s open 
in relation to tomorrow's 5-day 50% level, because if it’s not below the 5-day 
50% level it’s going higher.

However, that will obviously depend on price action in US markets.


----------



## Frank D

*SPI Weekly and 5-day pattern*

As per Weekly report…

 July high @ 4120 reversal pattern was based on Monday’s high @ 4130 
and Tuesday’s open.

The past 3 months has seen the same reversal pattern from a higher 
Weekly open back towards the Weekly 50% level as a first target.

However, we are in a new Quarter and a ‘thrust’ trending pattern 
is occurring, which is sending the markets higher.

Once Today (Tuesday) failed to open below the 5-day 50% level, 
market dynamics has pushed the SPI up towards Tuesday’s highs @ 4150.

The reversal down from these monthly highs was based on Monday 
remaining below 4130,which it did, but Tuesday failed to open lower.

Monday’s expected resistance and ‘sell’ zone was open to RISK because 
of the shift in the 5-day pattern and a Thrust pattern occurring along 
with price now trading above the Monthly highs.

Anyone shorting around July's highs based on Tuesday’s trading has got
 to begin to feel that the trade is moving away from them, and following the 
3rd quarter pattern UP towards August highs.

Anyone *holding ‘long’ positions on stocks *can sit back and trade
 the trend towards 4400….

However, around August highs will complete a 2-month wave 
pattern upwards, which is an ideal area to partial exit some positions
 and leave open others towards 4400, which is what I’m doing.

My whole focus on trading stocks within each Quarterly cycle is try and 
take 10-15 % per quarter.


----------



## Frank D

*SPI Weekly and 5-day pattern*

If you are short, then that's what you want to see...

A daily close below the 5-day 50% level @ 4099, with the expectation 
that price will begin to rotate towards the Weekly 50% level next week.

*As per Weekly US report...*

I was expecting a 2-day stall/reversal pattern from this week's higher 
Weekly open, and that's completed.

However, A bearish pattern would have seen the 2nd day close below 
their 5-day 50% levels and not above, thus providing a greater probability that the SPI could 'gap' open lower tomorrow.

Now it depends on what US markets do on Wednesday, and if they follow 
the same pattern as the SPI....


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI continues towards Thursday's highs along with a Spiral top @ 4164.

Today's trading was a high probability pattern for a continuation upwards 
as part of the 3rd Quarter UP move.

Yesterday reversed down into the 5-day 50% level into a lower Daily close, 
and today rose up from the 5-day 50% level from a lower Daily open and has continued with the trend and 5-day pattern:- higher Daily close.

Random resistance around Thursday's highs, but there is an expectation 
of higher prices in the near future.


----------



## >Apocalypto<

which broker do u use Frank???


----------



## marknz88

Cheers Frank! After finishing the book I can now re-work back through a lot of these charts as 'revision material'

Keep up the good work. Your contributions dont go unoticed


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI continuing to trend upwards into the last day of the month, and 
heading into August highs early next month as part of the 3rd quarter 
Thrust pattern.

Thursday high breakout:- breakout and extend into Friday's highs @ 4215.

Friday highs @ 4215 can be an intra-day resistance zone ,but i'm not expecting too much downside in afternoon trading.

Normally  a HOOK bar over 4189 (blue) will continue upwards another
 42-44 points, putting the SPI into 4228 and closer to the Weekly highs.


----------



## Frank D

*SPI Monthly*

3rd Quarter 'Thrust' pattern with the expectation of price moving towards 4400+

However, based on market dynamics it might take until September for that pattern to play out.

August highs are view as resistance, whilst the 50% level is viewed as support.

Precise high on Friday @ 4215, and based on this pattern there is an expectation of a 2-day pullback in the market:- random length.

Day traders then look for patterns within the 5-day range thereafter.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Bullish on the Market in the 3rd Quarter, however price has stalled on 
the Friday highs @ 4215 and whilst below this level I would expected a 
2-day reversal towards the 5-day 50% level @ 4159 as the first target.

This is based on the higher Weekly open pattern and 5-day high stall 
from the previous week, which normally starts with pullback into the 
5-day 50% level.

However, there is a Range that’s still thrusting upwards from Friday @ 
4189…

If price is above 4215, then there is an expectation that it’s following 
the August Trend higher towards Monday’s highs.

It’s a simple case of trading on the right side of 4215 in early trading 
and then using the levels in the 5-day pattern.


----------



## Frank D

*SPI Weekly and 5-day pattern*

*Open trading set-u*p as per book:- last R42-44 range from 
the previous day has to complete before we move into the next day’s 
range.

I mentioned 4215 in the morning report, but that level was nullified once 
the range completed and the levels dynamically changed into Monday’s 
levels

SPI Gapped on open forming higher spiral point...

*Once below 4226 *expectation for a move towards the 5-day 
50%level or at least a range completion at 4190.

We have seen price move down and swing upwards 21 points and
 retested 4226 already today, along with pushing price down once again 
21 points (partial exit),but it’s having a hard time moving down towards 
4190.

Even though I have a view higher prices in August, based on today’s
 pattern I can’t be trading longs on the SPI…

At this stage today's set-up is part of the higher Weekly open and 2-day reversal down (stall pattern)

However, If the SPI moves above 4226 in afternoon trading the bias is 
to move towards Monday’s highs but I’m not expecting that to happen as
 yet....

But I would have expected a complete 42-44 reversal down from 
today's highs by now, and that hasn't happend either.


----------



## tech/a

Frank D said:


> *SPI Weekly and 5-day pattern*
> 
> *Open trading set-u*p as per book:- last R42-44 range from
> the previous day* has to complete *before we move into the next day’s
> range.
> 
> I mentioned 4215 in the morning report, *but that level was nullified once *the range completed and the levels dynamically changed into Monday’s
> levels
> 
> SPI Gapped on open forming higher spiral point...
> 
> Once below 4226 *expectation *for a move towards the 5-day
> 50%level or at least a range completion at 4190.
> 
> We have seen price move down and swing upwards 21 points and
> retested 4226 already today, along with pushing price down once again
> 21 points (partial exit),*but it’s having a hard time *moving down towards
> 4190.
> 
> Even though I have a view higher prices in August, based on today’s
> pattern *I can’t be trading longs on the SPI*…
> 
> At this stage today's set-up is part of the higher Weekly open *and 2-day reversal down (stall pattern)*
> 
> *However, If* the SPI moves above 4226 in afternoon trading the bias is
> to move towards Monday’s highs but *I’m not expecting *that to happen as
> yet....
> 
> *But I would have expected a complete 42-44 reversal down from
> today's highs by now, and that hasn't happend either.*




So like *any other analysis *the landscape will alter as trading takes place.
No analysis is poured in concrete.
Expectations,targets and projections all move with the market.What is clear at the beginning of the day may not be as clear during or toward the end of the day/week/month/year.

It's not the analysis its the exponent and their application of their/that analysis---in my view.


----------



## Trembling Hand

tech/a said:


> So like *any other analysis *the landscape will alter as trading takes place.
> No analysis is poured in concrete.
> Expectations,targets and projections all move with the market.What is clear at the beginning of the day may not be as clear during or toward the end of the day/week/month/year.




Tech the diff is in the probabilities and expected range. Where to enter and where to get out on the _bigger time frame probabilities and range_. As you move down into smaller time frames and ranges flip ya coin I guess for direction. Range still gives good "if - then" type of scenarios. Thats all that matters?

But I'm sure Frank will address your points.

EDIT: 



> It's not the analysis its the exponent and their application of their/that analysis---in my view



 Isn't it always?


----------



## tech/a

A wise old trembling hand once said.



> I was merely pointing out that just like the rest of us so called Muppets you haven't got the market on a piece of string.




and 



> Isn't it always?




Franks got some good stuff,which I use from time to time,but after the spray I got on the XAO thread re Elliott,I came in here for a quick counter attack! 



> But I'm sure Frank will address your points.




I hope so.
I have no doubt a "Dilernia Principal" will fix it.


----------



## Trembling Hand

tech/a said:


> Franks got some good stuff,which I use from time to time,but after the spray I got on the XAO thread re Elliott,I came in here for a quick counter attack!




 hehe 

Oh yes I know what ya up to. But I'm bored not trading so the forum audience gets the pleasure of my sh!te stirring and crazy fundraising ideas


----------



## Frank D

tech/a said:


> So like *any other analysis *the landscape will alter as trading takes place.




So what’s your point?




tech/a said:


> No analysis is poured in concrete. .




Yes there is, it's called 'elliot wave'. It’s got concrete boots on and at 
the bottom of the harbour, where it should remain.

If you want to continue to use a lame methodology then there is a 
Elliot wave thread that needs some help. it's deadly silent.



tech/a said:


> Expectations,targets and projections all move with the market. What is clear at the beginning of the day may not be as clear during or toward the end of the day/week/month/year.
> 
> .




Let me explain this clearly.

Trading is about finding patterns in the market and trading with
 entry techniques with 'least risk'.

Once you find those patterns you trade-manage them.

I want to know where those patterns are in advance not after the 'fact'.

I want to be trading the trend before others get on it, and want to 
get off the trend before others realise what's going on.

How a position trader trades is going to be different to how a day trader is 
going to trade  even though they are trading within same multi-frame 
model.

As a day trader, all I care is finding trades using 'least risk', either 
trading with the trend or against the trend, and I think I’ve
 certainly described that in detail:- spiral point trading and 5-day 
patterns and using intra-day patterns of 21-42 points.

I’m long stocks so I’m not missing any of this move in the market, but I’m 
certainly not going to trade the same if an opportunity presents itself and
 I can short a 'money pattern' of 21-42 points moves intra-day.


I could be shorting a higher point in a rising trend because I know that 
there is a statistical bias and potential 21-42 point rotation downward.

If price moves above the ‘high probability level’, which once again has 
been hardcoded that everyone can see and use, then you have a 
statistical bias to either cover positions or switch into the change of 
trend, once again trading a 'money pattern':- least Risk & reward

*I work with a methodology, theory and mutl-timeframe Model that 
has statistical reliability and statistical probability, that has been 
hardcoded and objective along with certain 'principles and rules'*



tech/a said:


> I have no doubt a ‘Dilernia princple’ will fix it
> 
> .




The important part in all my analysis,  was that it was described in detail in 
this thread that some people continue to ignore. I was using an 
objective model that everyone else can use, and they can see it plan as
 day. I have rules and *prinicples *so that patterns in the market can be anticapted in advance and traded accordingly.

1. Market to continue down in 2009, known from 2008


2. March lows reversal and 30% percent swing upwards:- known in advance

3. APRIL, MAY , June highs and precise tops in the market with the 
expectation price would come back down into the 3rd Quarter 50% level:- known in advance.

4. *3rd Quarter Thrust pattern towards 4400, known in advance.*

5. June high break out and extension pattern into August highs 4313:- which is always part of a Quarterly Thrust pattern:- Known in advance

Of course the actual outcome is not known in advance, but we are
 trading statistical probability & reliability that the actual outcome will act accordingly, and we trade accordingly to our _'a window into the future'_

It beggars belief that people still want to use methodologies that 
were written 100 years ago (EW and Gann) that rarely stands up in a 
real-time trading environment.

They are so fixed out the actual outcome of their subjective analysis that 
they find it hard to adapt to the changing market dynamics:-  Daily,Weekly and so on.....



> Im sure Frank will address your points




I think I've explained myself and there is enough useful information in 
this thread that i'm sure many readers have used in the past or are
 currently using at this time but won't acknowledge it.

They will only briefly mention in passing comment, as ‘ the other methodology’ .

Back to Trading and making a buck.


----------



## tech/a

> Model that
> has statistical reliability and statistical probability,




Ive bought your book/read your blog/Followed this thread.
i'm yet to see any of the above.
Can you point me to this.
I was un aware you have been to such lengths to validate your method Frank.
This statistical bias has my attention. I was un aware there was a proven bias---.

Is this the 21/42 rotation we are talking of or the Ranges and retracements?---The statistical evidence.
Whats this related against.--Random?

Gann I agree.
E/W is quite a young form of analysis.
I find it very useful and very insightful.



> They are so fixed out the actual outcome of their subjective analysis that
> they find it hard to adapt to the changing market dynamics:- Daily,Weekly and so on.....




The exact opposite I find.
But then again I have my suspicions that many "exponents" (Past---as of lately.) on this board are more analysts than practical traders who apply the analysis.


----------



## Frank D

tech/a said:


> Ive bought your book/read your blog/Followed this thread.
> i'm yet to see any of the above..




Have a look at the above Monthly chart….I mean how much ‘reliability’ do you need.

Am I mistaken, blind or just plain dumb, or does the market seem to closely follow my trading model?

It illustrates the key technical components of T/A:- support, resistance & trend analysis.



tech/a said:


> E/W is quite a young form of analysis.
> I find it very useful and very insightful...




Yeah, if you want to play tennis with a wooden racquet. 



tech/a said:


> Is this the 21/42 rotation we are talking of or the Ranges --The statistical evidence....




Have a look at the intra-day patterns during the trading day, they move in
 21-23 and 42-44 points.

I already know where to trade, when to trade 'momentum' and when to 
'swing trade'...... the market and trade management takes care of the
 rest:- ‘Entry of least Risk’

The random pattern is, I don't know how far price will move away from
 the entry especially when it's not optimised to the current trend.

For example:- the market is going higher into the August highs, however 
I might short a 'spiral point' or a 5-day high looking for a 'statistical range' 
in the market that is the dominate pattern intra-day of 21-44 points, but 
it doesn't always complete the entire range, as was the case late yesterday
 @ 4243 and currently now. (Chart Below)

And that's all I'm interested in:- patterns of statistical reliability & 
entries of least Risk within a multi-frame model, whether day trading or trading stocks over a number of weeks/months.


----------



## Frank D

*SPI Monthly and 5-day pattern*

SPI moved into the 5-day highs and reversed down today:- probability and reliability.

There is an expectation that US markets still need to move up and 
complete their August highs:- Tuesday/Wednesday.

Even though I think markets are still heading higher, and could 
continue higher in August towards 4400, I would begin to look for 
short-term 'tops' in the market around these August highs and a move back 
down towards the Monthly 50% levels. 

This pattern is based on a breakout & extend pattern from the
 previous month,  and price moves back down to retest the breakout and 
50% level in the current month:- support

If that occurs, then I would want to be looking for 'long' positions once
 again for a move towards 4400+ over the next 2 months.

This is my ideal pattern that I want to see instead of 'spiking upwards' 
into 4400 in August, because it allows two bites of the cherry within 
the Quarterly trend:- 

At this stage it's not the ideal time to go 'GUNHO' into short positions 
(long-term), because there isn't an alignment with a US markets and
 their August highs, I would still like to see a Friday close below this 
level @ 4314, and the Financial Index is about 100 points away for its 
own August highs.

There is enough information in this post that might be of interest to 
some over the medium term.


----------



## tech/a

Frank D said:


> Have a look at the above Monthly chart….I mean how much ‘reliability’ do you need.
> 
> Am I mistaken, blind or just plain dumb, or does the market seem to closely follow my trading model?
> 
> It illustrates the key technical components of T/A:- support, resistance & trend analysis.




If your referring* to an example as statistical evidence*,I guess it's just plain dumb.





> Yeah, if you want to play tennis with a wooden racquet.




Ive often thought about this.
Elliott has many many books written on the topic,In fact scholars write their own books on the topic selling for 100s and often running out of print. 
Software is available on the topic,amazingly powerful.Many 1000s of software programs have been sold to 1000s of traders.Often voted by software critics as the best around. 

Frank you've been around since I started 15 yrs ago. 

I certainly hand it to you, you are an out there guy,passionate and with "Something".
But after 15 yrs the Hawk-eye light sabre tennis racquet just hasn't seemed to have taken off.
Sure 2 "E" books and a hell of a lot of work in that.
But Id have thought something as powerful and as full of statistically PROVEN evidence which has been presented now for 10 yrs to the public would have been tracked down and become the new Market Profile---rendering all other analysis obsolete.
The inventor would have so much proven track history that rooms would be filled with people beating a track to your door with testimonial after testimonial appearing in support of this revolutionary trading methodology.
Books/Software/Seminars/Websites/Interviews/guest speaking invitations to tell the Muppets exactly where we just dont get it!

Just an observation---have often wondered.


----------



## weird

Frank, interested in your attack on E/W,



Frank D said:


> Yeah, if you want to play tennis with a wooden racquet.




while I don't use E/W myself, there are people like Paul Tutor Jones that beg to differ,

http://en.wikipedia.org/wiki/Elliott_wave_principle

"Paul Tudor Jones, the billionaire commodity trader, calls Prechter and Frost's standard text on Elliott "a classic," and one of "the four Bibles of the business" --

        "[McGee and Edwards'] Technical Analysis of Stock Trends and The Elliott Wave Theorist both give very specific and systematic ways to approach developing great reward/risk ratios for entering into a business contract with the marketplace, which is what every trade should be if properly and thoughtfully executed."[11]"


Also a quote from the first Market Wizards book (pg 130), and also mentioned here as the quote,

http://www.mtptrader.com/MTPredictor.html

"Elliott Wave Theory allows one to create incredibly favorable risk/reward opportunities. That is the same reason I attribute a lot of my own success to the Elliott Wave approach"

-Paul Tudor Jones"

Anyhow, while not wishing to distract from your thread, just not sure why you appear so vehement in rubbishing E/W.


----------



## Trembling Hand

hey Tech I believe the Beta video system was a superior one to VHS.

I believe Nicks education is better than SIM or Aussie Dog wonder where they sit in revenue?


----------



## tech/a

Trembling Hand said:


> hey Tech I believe the Beta video system was a superior one to VHS.
> 
> I believe Nicks education is better than SIM or Aussie Dog wonder where they sit in revenue?




On the one hand we have a belief in superiority (AMT Model & Methodology)
Frank/Yourself a few others.
On the other hand we have a bigger belief in superiority.(Elliott and all its followers/educators/academics/traders). Books/Software/a few 100,000 others. 

Interpretation and Application.
This in it self levels the field. Regardless of analysis type or style.

Now those proven statistical probability and reliability figures--are where?


----------



## Trembling Hand

tech/a said:


> On the one hand we have a belief in superiority (AMT Model & Methodology)
> Frank/Yourself a few others.
> On the other hand we have a bigger belief in superiority.(Elliott and all its followers/educators/academics/traders). Books/Software/a few 100,000 others.




Ah I see. I always thought MacDonalds was Sh!te but on your logic bigger proves it is the best.


----------



## It's Snake Pliskin

> tech/a
> Ive often thought about this.
> Elliott has many many books written on the topic,In fact scholars write their own books on the topic selling for 100s and often running out of print.
> Software is available on the topic,amazingly powerful.Many 1000s of software programs have been sold to 1000s of traders.Often voted by software critics as the best around.



Tech there is no correlation of numbers of books, software programs to real proven methodology that really works without doubt.

Catching cigarette smoke is an apt analogy for EW but I won't be biased. 



> Frank you've been around since I started 15 yrs ago.
> 
> I certainly hand it to you, you are an out there guy,passionate and with "Something".
> But after 15 yrs the Hawk-eye light sabre tennis racquet just hasn't seemed to have taken off.
> Sure 2 "E" books and a hell of a lot of work in that.
> But Id have thought something as powerful and as full of statistically PROVEN evidence which has been presented now for 10 yrs to the public would have been tracked down and become the new Market Profile---rendering all other analysis obsolete.
> The inventor would have so much proven track history that rooms would be filled with people beating a track to your door with testimonial after testimonial appearing in support of this revolutionary trading methodology.
> Books/Software/Seminars/Websites/Interviews/guest speaking invitations to tell the Muppets exactly where we just dont get it!
> 
> Just an observation---have often wondered.



Don't you think it is an issue for Frank to deal with as he see's fit?


----------



## tech/a

It's Snake Pliskin said:


> Tech there is no correlation of numbers of books, software programs to real proven methodology that really works without doubt.
> 
> Catching cigarette smoke is an apt analogy for EW but I won't be biased.
> 
> 
> Don't you think it is an issue for Frank to deal with as he see's fit?




(1) I'll remember that when investigating my options.
(2) Of course its just something I have pondered.

Those who don't use technical analysis at all think we all trade cigarette smoke.
Franks "My method is the greatest thing since a chart was invented" attitude to analysis is what gets up peoples noses.


----------



## Frank D

There is enough information in this thread and my books for people to use.

If you want to discredit it, then go right ahead. Start your own thread 
and let's see what you got. I'd be more than happy to learn something new.

And, I actually do think it’s superior to all other subjective analysis. 
It provides the core basis of what Technical analysis is all about, Support/resistance and trend identification.

I run this thread because I try and educated others of using a method 
that’s far more objective than what’s out there.

If you don’t think that’s the case, then I couldn't give a rat's a*rse. Stick 
to what works best for you.

It seems because I don't run seminars or charge $000's it makes it less creditable.

I've been around long enough, if you like what i've got add it and use it. 

If you don't, then go back to your EW thread. I'm sure there will be a few trading set-ups coming long. Don't miss out.

99% of traders aren't Paul Tutor Jones and never will be, with or without EW.

I’ll continue to run this thread as I’ve always run it, end of story.


----------



## glenn_r

Does anyone have Franks indicators coded up for Amibroker and if so can you share them.

Thanks.


----------



## Frank D

That’s a good idea.

Can you please email me the codes also so I can pass them on, as I get a lot of Amibroker users asking the same questions, but I’m not familiar with the program or the coding.


----------



## Trembling Hand

Frank D said:


> That’s a good idea.
> 
> Can you please email me the codes also so I can pass them on, as I get a lot of Amibroker users asking the same questions, but I’m not familiar with the program or the coding.




What format/software are they in now Frank?


----------



## nunthewiser

FWIW.

i have found this thread intresting , educational and to be honest i have seen franks analysis fairly spot on most( NOT all) of the time ........ 

i do not subscribe to the notion of "the more sales must make it better theory " as thats like comparing a toyota corrolla to a bently 

at times it probably would have paid me to actually listen/follow a few calls here instead of following my own analysis on overall moves of late ..BUT that has only been proven with hindsight and thats not how we enter trades.

thanks Frank , keep it up


----------



## wayneL

I've got a some Amibroker codes that work, but not sure of the exact parameters.

If someone PMs me them I'll happily share the adjusted code.


----------



## beamstas

I've written a heap of stuff with pivot points in Amibroker, but im not sure it's what frank does.

Basically what i have is 50% level is the pivot point for the month, with the top and bottom 50% range from the pivot point.

I have it done in daily, weekly and monthly, with paramaters to turn each one on and off, and also listing down the side of the chart each level for easy reference.

Im glad to pass it on, if it resembles anything close to what frank does. I basically coded the pivot points, from the section about frank in penfolds book, to see how it works.

Here's an old pic with plotting turned off


----------



## wayneL

beamstas said:


> I've written a heap of stuff with pivot points in Amibroker, but im not sure it's what frank does.
> 
> Basically what i have is 50% level is the pivot point for the month, with the top and bottom 50% range from the pivot point.
> 
> I have it done in daily, weekly and monthly, with paramaters to turn each one on and off, and also listing down the side of the chart each level for easy reference.
> 
> Im glad to pass it on, if it resembles anything close to what frank does. I basically coded the pivot points, from the section about frank in penfolds book, to see how it works.
> 
> Here's an old pic with plotting turned off




OOOOhhhh  yours looks much more elegant than mine... I'm all self conscious about my probably clunky code now.


----------



## Frank D

Trembling Hand said:


> What format/software are they in now Frank?




TH,

I use a program called fibonacci Trader, it  has all the coding for
the indicators shown in this thread.

However, all the indicators need ‘tweaking and changing'



nunthewiser said:


> FWIW.
> 
> i have found this thread interesting , educational and to be honest i have seen franks analysis fairly spot on most( NOT all) of the time ........
> thanks Frank , keep it up




Thanks nut.

I’ll never be spot all the time, anything around 50% and I’d be happy with.



wayneL said:


> I've got a some Amibroker codes that work, but not sure of the exact parameters.
> 
> If someone PMs me them I'll happily share the adjusted code.




Thanks, Frank


----------



## beamstas

wayneL said:


> OOOOhhhh  yours looks much more elegant than mine... I'm all self conscious about my probably clunky code now.




It's what is on the inside, that counts


----------



## nunthewiser

Frank D said:


> Thanks nut.
> 
> I’ll never be spot all the time, anything around 50% and I’d be happy with.
> 
> 
> 
> Thanks, Frank




i wish i could think that was a typo , but i cant


----------



## Frank D

nunthewiser said:


> i wish i could think that was a typo , but i cant




Sorry Nun, it was a typo.

cheers
Frank


----------



## nomore4s

glenn_r said:


> Does anyone have Franks indicators coded up for Amibroker and if so can you share them.
> 
> Thanks.






Frank D said:


> That’s a good idea.
> 
> Can you please email me the codes also so I can pass them on, as I get a lot of Amibroker users asking the same questions, but I’m not familiar with the program or the coding.




I have had Franks channels coded up for amibroker and while it isn't as 'neat' as Franks software it works. I have coded up weekly, monthly, quarterly and yearly channels. These are able to be overlayed on charts one at a time or in multiples.

I will happily share with anyone interested in them. I'm currently overseas atm but will be back next week and can email them to interested people then.


----------



## Cartman

Frank D said:


> Thanks nut.






nunthewiser said:


> i wish i could think that was a typo , but i cant




it was just a "franking" credit Nun :


----------



## Frank D

*SPI Weekly and 5-day pattern*


As pointed out in yesterday's post, I'm looking for a rotation downward 
into the August 50% level this month, as part of a 'retest' of the July breakout.

I'm not sure of how quick that's going to be, it could happen in 1 week or
 it could take until the last week of August for that to play out.

My view still stands for higher prices in the 3rd quarter, but I want to see 
a lesser timeframe pullback this month to verify the breakout & support.

If that plays out, then i'm looking for support and then 2-month wave pattern upwards into 
higher highs in the 3rd quarter or until it reaches @ least 4400.

With stocks going ex-div later this month it should put pressure on the 
market to pullback, even though I think the market needs to complete 
the move into 4400+


----------



## beamstas

Here is the Amibroker code i wrote for the points.
It may not be what frank is doing here, but i'll upload it anyway and see how accurate it is.

The code does not, will not, and doesn't make any suggestions to buy or sell a certain stock, do not make financial descisions from the use of this code, as i cannot guarantee the accuracy of the code.

It was all written by me, so please do not attempt to sell it.

To use the code, simply save it and open it as a new chart. Then you can right click the chart and go to "paramaters", to change certain aspects of it, or the display on the actual chart.

Regards
Brad


----------



## beamstas

Here is the code, me previous post was more than 10,000 characters so it wouldn't fit.



		Code:
	

//Pivot Points By B Beams, 2009.

SetChartBkColor( ParamColor("BG Colour",colorDarkGrey ) );
SetChartOptions(0,chartShowDates);
//Switches
CS = ParamToggle("Chart Style","HLC|Candle",0);
VC = ParamToggle("Chart Colours","Off|On",1);
VCX = ParamColor("Default Chart Color",31);
Resistance = ParamToggle("Turn off Title","Off|On",1);
mp = ParamToggle("Write Monthly Resistance","Off|On",0);
p1 = ParamToggle("Plot Weekly Points","Off|On",0);
mx = ParamToggle("Plot Monthly Points","Off|On",0);
dy = ParamToggle("Plot Daily Points","Off|On",0);
Shw = ParamToggle("Show Extra Weekly","Off|On",0);
Ribbon = ParamToggle("Show Extra Ribbons","Off|On",0);
ps = ParamToggle("Show Indicators","Off|On",0);
//Switches


//Weekly//
TimeFrameSet( inWeekly );
PivotPoint = (High+Low+Close)/3;
Range = (High-Low)/2;

PivotPoint = (High+Low+Close)/3;
R2 = (2*Range)+PivotPoint;
R1 = Range+PivotPoint;
R3 = R2+High-Low;

S2 = ((2*Range)*-1)+PivotPoint;
S1 = (Range*-1)+PivotPoint;
S3 = S2-High+Low;

TimeFrameRestore();
PivotPoint = TimeFrameExpand(PivotPoint,inWeekly);
R1 = TimeFrameExpand(R1,inWeekly);
R2 = TimeFrameExpand(R2,inWeekly);
R3 = TimeFrameExpand(R3,inWeekly);
S1 = TimeFrameExpand(S1,inWeekly);
S2 = TimeFrameExpand(S2,inWeekly);
S3 = TimeFrameExpand(S3,inWeekly);
Displace = 1;

			if(p1==1 AND NOT shw==1)
			{
				Plot(PivotPoint,"PivotPoint",colorBlue, styleDashed,0,0,displace);
				Plot(R1,"R1",colorRed, styleDashed,0,0,displace);
				Plot(S1,"S1",colorGreen, styleDashed,0,0,displace);
			}

			if(shw==1)
			{
				Plot(PivotPoint,"PivotPoint",colorBlue, styleDashed,0,0,displace);
				Plot(R1,"R1",colorOrange, styleDashed,0,0,displace);
				Plot(R2,"R2",colorRed, styleDashed,0,0,displace);
				Plot(R3,"R3",colorDarkRed, styleDashed,0,0,displace);
				Plot(S1,"S1",colorPaleGreen, styleDashed,0,0,displace);
				Plot(S2,"S2",colorGreen, styleDashed,0,0,displace);
				Plot(S3,"S3",colorDarkGreen, styleDashed,0,0,displace);
			}


//End Weekly//


//Monthly
TimeFrameSet( inMonthly );
PivotMidm = (High+Low+Close)/3;
Rangem = (High-Low)/2;
PivotMaxm = Range+PivotMidm;
PivotMinm = (Range*-1)+PivotMidm;

TimeFrameRestore();
TimeFrameRestore();
PMidm = TimeFrameExpand(PivotMidm,inMonthly);
Pmaxm = TimeFrameExpand(PivotMaxm,inMonthly);
Pminm = TimeFrameExpand(PivotMinm,inMonthly);

			if(mx==1)
			{
				Plot(Pmaxm,"monthly resistance",colorRed, styleDashed,0,0,displace);
				Plot(Pmidm,"monthly resistance",colorBlue, styleDashed,0,0,displace);
				Plot(Pminm,"monthly resistance",colorGreen, styleDashed,0,0,displace);
			}
//End Monthly


//Daily//
PivotMidd = (High+Low+Close)/3;
Ranged = (High-Low)/2;
PivotMaxd = Range+PivotMidd;
PivotMind = (Range*-1)+PivotMidd;

pmaxd = PivotMaxd;
pmidd = PivotMidd;
pmind = PivotMind;

			if(dy==1)
			{
				Plot(Pmaxd,"daily resistance",colorRed, styleDashed,0,0,displace);
				Plot(Pmidd,"daily resistance",colorBlue, styleDashed,0,0,displace);
				Plot(Pmind,"daily resistance",colorGreen, styleDashed,0,0,displace);
			}
//end Daily//

//Date
function IncDate(idate)
{
    yy = int(idate / 10000) + 1900;
    mm = int((idate % 10000) / 100);
    dd = idate % 100;

    dd++;
    lim = 31;
    switch (mm) {
        case 2: {
            lim = 28;
            if (!(yy % 4) && yy != 2000)
                lim = 29;
            break;
            }
        case 4:
        case 6:
        case 9:
        case 11:
            lim = 30; break;
        }
    if (dd > lim) {
        dd = 1;
        if (++mm > 12) {
            mm = 1;
            yy++;
            }
        }

    return (yy-1900)*10000 + mm*100 + dd;
}
tday = LastValue(DateNum());
tmor = IncDate(tday);
yy = int(tmor / 10000) + 1900;
mm = int((tmor % 10000) / 100);
dd = tmor % 100;
dstr = StrFormat("%g/%g/%g", dd, mm, yy);
//End Date//

//Define Title//
			if(resistance==1)
			{
					if(mp==1)
					{
					Title = 	EncodeColor(colorWhite)+ "Pivot Points" + " - " +  Name() + " - " + EncodeColor(colorGreen)+ Interval(2) + EncodeColor(colorWhite) + " - " + Date() +
					"\n"+"\n" + EncodeColor(colorRed) + "Open " + EncodeColor(colorWhite)+ O + " - " + EncodeColor(colorRed) + "High " + EncodeColor(colorWhite)+ H + " - " + EncodeColor(colorRed)  + "Low " + EncodeColor(colorWhite)+ L + " - " + EncodeColor(colorRed)  + "Close " + EncodeColor(colorWhite)+ C +
					"\n"+"\n"+"-Daily Resistance for " + Dstr +"-"
					+"\n"+ EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorRed) + pmaxd + " " 
					+"\n"+ EncodeColor(colorWhite) + "Pivot Point:  " + EncodeColor(colorBlue) + pmidd + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:       " + EncodeColor(colorPaleGreen) + pmind + " "+
					"\n"+"\n"+EncodeColor(colorWhite)+"-Weekly-"+"\n"+EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorDarkRed) + R3 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorRed) + R2 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorOrange) + R1 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Pivot Point:   " + EncodeColor(colorBlue) + PivotPoint + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:        " + EncodeColor(colorPaleGreen) + S1 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:        " + EncodeColor(colorGreen) +  S2 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:        " + EncodeColor(colorDarkGreen)+ S3 + " "
					+"\n"+"\n"+EncodeColor(colorWhite)+"-Monthly-"
					+"\n"+ EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorRed) + pmaxm + " " 
					+"\n"+ EncodeColor(colorWhite) + "Pivot Point:  " + EncodeColor(colorBlue) + pmidm + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:       " + EncodeColor(colorPaleGreen) + pminm + " ";
					}
					else
					{
										Title = 	EncodeColor(colorWhite)+ "Pivot Points" + " - " +  Name() + " - " + EncodeColor(colorGreen)+ Interval(2) + EncodeColor(colorWhite) + " - " + Date() +
					"\n"+"\n" + EncodeColor(colorRed) + "Open " + EncodeColor(colorWhite)+ O + " - " + EncodeColor(colorRed) + "High " + EncodeColor(colorWhite)+ H + " - " + EncodeColor(colorRed)  + "Low " + EncodeColor(colorWhite)+ L + " - " + EncodeColor(colorRed)  + "Close " + EncodeColor(colorWhite)+ C +
					"\n"+"\n"+"-Daily Resistance for " + Dstr +"-"
					+"\n"+ EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorRed) + pmaxd + " " 
					+"\n"+ EncodeColor(colorWhite) + "Pivot Point:  " + EncodeColor(colorBlue) + pmidd + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:       " + EncodeColor(colorPaleGreen) + pmind + " "+
					"\n"+"\n"+EncodeColor(colorWhite)+"-Weekly-"+"\n"+EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorDarkRed) + R3 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorRed) + R2 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Resistance: " + EncodeColor(colorOrange) + R1 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Pivot Point:   " + EncodeColor(colorBlue) + PivotPoint + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:        " + EncodeColor(colorPaleGreen) + S1 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:        " + EncodeColor(colorGreen) +  S2 + " " 
					+"\n"+ EncodeColor(colorWhite) + "Support:        " + EncodeColor(colorDarkGreen)+ S3;
					}
			}
			else
			{
				Title = 	EncodeColor(colorWhite)+ "Pivot Points" + " - " +  Name() + " - " + EncodeColor(colorGreen)+ Interval(2) + EncodeColor(colorWhite) + " - " + Date() +
			"\n"+"\n" + EncodeColor(colorRed) + "Open " + EncodeColor(colorWhite)+ O + " - " + EncodeColor(colorRed) + "High " + EncodeColor(colorWhite)+ H + " - " + EncodeColor(colorRed)  + "Low " + EncodeColor(colorWhite)+ L + " - " + EncodeColor(colorRed)  + "Close " + EncodeColor(colorWhite)+ C;
			}		
//End Title//	

//Chart Colour//
			if(VC==1)
			{			
				VColor=IIf(C>R2,colorDarkGreen,IIf(C>R1,colorGreen,IIf(C>PivotPoint,colorPaleGreen,IIf(C>S1,colorOrange,IIf(C>S2,colorRed,IIf(C>S3,colorDarkRed,colorWhite))))));		
			}
			else
			{
				VColor=VCX;
			}
//End Chart Colour

//Set Style//
			if(Cs==1)
			{
			PlotOHLC(O,H,L,C,"",VColor, 64 | styleThick );
			}
			else
			{
			PlotOHLC(Null,H,L,C,"",VColor,128 | styleThick );
			}

//End Style//

//Ribbon
RibbonColor = IIf(C>R2,colorDarkRed,IIf(C>R1,colorRed,IIf(C>PivotPoint,colorOrange,IIf(C>S1,colorPaleGreen,IIf(C>S2,colorGreen,IIf(C>S3,colorDarkGreen,colorWhite))))));
RibbonColorD = IIf(C>Pmaxd,colorDarkRed,IIf(C>Pmidd,colorRed,IIf(C<Pmidd,colorPaleGreen,IIf(C<Pmind,colorGreen,colorWhite))));
RibbonColorM = IIf(C>PmaxM,colorDarkRed,IIf(C>PmidM,colorRed,IIf(C<PmidM,colorPaleGreen,IIf(C<PminM,colorGreen,colorWhite))));


			if(Ribbon==1)
			{
				Plot( 1, "", RibbonColord, styleArea | styleOwnScale | styleNoLabel, -.0000010, 170 );
				Plot( 3, "", RibbonColor, styleArea | styleOwnScale | styleNoLabel, -.0000010, 170 );
				Plot( 5, "", RibbonColorm, styleArea | styleOwnScale | styleNoLabel, -.0000010, 170 ); 
			}
			else
			{
				Plot( 1, "", RibbonColor, styleArea | styleOwnScale | styleNoLabel, -.0000010, 170 );
			}
//EndRibbon//

//Shapes//
			if(ps==1)
			{
				PlotShapes(IIf(C<S2 && (C<Pmidd && C<PminM) OR C<S1 && (C<Pmind && C<PmidM),shapeSmallUpTriangle,Null),colorGreen,0,Low-(C/100));
				PlotShapes(IIf(C>R2 && (C>Pmidd && C>PmaxM) OR C<S1 && (C>Pmaxd && C>Pmidm),shapeSmallDownTriangle,Null),colorRed,0,High+(C/100));
			}


Regards
Brad


----------



## Frank D

*SPI Weekly and 5-day pattern*

5-day 50% level support on Thursday and back into the highs.

4313 is still viewed as resistance in August and I still haven' t change 
my view of lower prices.

However, there are two patterns that I want to see next week...

1. How Friday closes this week and next week's higher Weekly open...

2. Any reversal down needs to be verified by a 5-day low breakout.

At this stage price is rotating within the 5-day range.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Today' s price action in the SPI was one of the most volatile we had in a 
long time.

Good ranges and good rotation.

US markets still haven't hit August highs, which I'm hoping they will 
tonight, and hopefully next week's higher open can begin to rotate 
back down into the monthly 50% levels.

I've exited my long positions on stocks, as part of my plan, therefore I 
want the market to pullback so I can get back into the trend at lower 
prices.

If markets continue up towards 4400+ before any pullback, then I'll 
wait until the 4th quarter from October to define my next entry pattern.


----------



## Frank D

*DOW Monthly and 5-day pattern*

We have the same 5-day range patterns in the DOW with the August highs the target. 

Whether that high is reached Friday or Monday, the pattern I want to see
 for any move back down towards the Weekly 50% level is a break of the 
5-day lows to validate my view.

SPI completed the August highs @ 4313 in Sycom last night.

The SPI starts to trade under 4253 on Friday (close) it will be the first 
stage that prices can begin to unwind, but it still needs a 5-day low 
breakout to confirm my view of a pullback in August in a 'zig-zag' fashion.


----------



## Frank D

*SPI Weekly and 5-day pattern*

August highs 4313 reached and a break of the 5-day 50% level, and at 
this stage the price action in the SPI is favouring a move back down towards August 50% level.

However, I'm not expecting a reversal down in 1 week, at this stage my 
view is that price will zig-zag downward within the 5-day range and it could take a number of weeks to play out...

A continuation down shouldn't move back above the 5-day 50% level 
today, but I've been wron.....g before, or US markets move upwards on
 Friday and the SPI opens higher on Monday above the August highs

To get the market to continue down there would need to be a lower daily 
close below the 5-day lows or White line (3177) this will verify the change
 in the 3-day cycle.

But I don't think that's going to happen today.

If for some reason there is late buying in the market and Friday closes 
above 4313, my view of a rotation downward might not play out.(bummer)

Because I want to see a pullback in the market in August because I think the 
3rd Quarter will still continue higher....

*Weekly Report out tomorrow*


----------



## squeezed out

anyone thinking arvo sell off in the SPI??

good time to take profits before non-farms in the US tonight...


----------



## Frank D

squeezed out said:


> anyone thinking arvo sell off in the SPI??
> 
> good time to take profits before non-farms in the US tonight...




This thread is about the *Dilernia model and methodology*.

If you’ve got nothing to add to the methodology or your not criticizing me for whatever reason...

Then you can add your comments regarding the SPI here

https://www.aussiestockforums.com/forums/showthread.php?t=4876


 I’m not interested in the non-farms, i'm only interested in making money during the day session and helping others do the same.

King Regards,
Frank.


----------



## Frank D

*DOW and S&P 500*

US markets finally complete their August highs, with Friday closing below.

All markets (SPI, DOW, S&P) will begin next week below resistance and 
a higher Weekly open.

Based on monthly high resistance levels which are valid and are very 
reliable, along with a higher Weekly open, the only conclusion I can come 
up with is a reversal down before it goes up later in the 3rd Quarter.

*Weekly Report UPdates....*

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

http://www.usindexweekly.blogspot.com/


----------



## Frank D

*SPI Monthly and 5-day pattern*

All previous highs and reversals in April, MAY, and June began from
*Monthly highs*, *a higher Weekly Open*, and all reversed down from the *5-day highs*;- precise tops.

There were three confirming patterns to verify the tops.

Even the start of July started from a higher Weekly open and the 5-day 
high, pushing the first week downward before 3rd Quarter Thrust pattern 
and rally.

This week was no different & *Monday highs @ 4307 set-up the move for 
the same pattern and continuation down *towards the 5-day lows, as part 
of a monthly reversal  highs in August and my expectation that the 
trend would move down before it continued higher later this quarter.

However, Tuesday should have continued down and not bounce up from 
4251, because once the range closed above 4279, the bias was to follow the 5-day pattern
 into Tuesday's highs @ 4318.

*4400 + could be reached quicker than expected and hoped for.*


----------



## aussiemo

Hi Guys,
I joined this forum only a few days back and really captivated by Frank's model.
I do not want to direct this basic question to Frank as he is doing a great job educating members of this forum. Can someone else please spend the time or give me a link so I can educate myself.
Can someone educate me on how the support resistance pts are calculated on the "channels" that are drawn.
I have used the Formula listed in this post for calc. PP and R1,R2....S1,S2...etc writen for AB. I have also used alternate Formula for calculating supp.& Res. have done an excel SS to give me the various values of Sup.&Res but I cannot get a single one to coincide with those used by Frank. 
I understand there is a book out there by Frank that explains everything
Thks, Mo


----------



## nomore4s

aussiemo said:


> Hi Guys,
> I joined this forum only a few days back and really captivated by Frank's model.
> I do not want to direct this basic question to Frank as he is doing a great job educating members of this forum. Can someone else please spend the time or give me a link so I can educate myself.
> Can someone educate me on how the support resistance pts are calculated on the "channels" that are drawn.
> I have used the Formula listed in this post for calc. PP and R1,R2....S1,S2...etc writen for AB. I have also used alternate Formula for calculating supp.& Res. have done an excel SS to give me the various values of Sup.&Res but I cannot get a single one to coincide with those used by Frank.
> I understand there is a book out there by Frank that explains everything
> Thks, Mo




Hi Mo,

Welcome to the forum. The best thing to do is click on the link at the bottom of Franks post and buy his book off his site. You can buy it in Ebook form so you can pretty much start studying it straight away.

This is the best way to start to understand his system, it is well worth the money.


----------



## Frank D

Aussiemo,

Sometimes it not just about the levels, it about the 'principles' used 
behind the levels when either ‘day trading’, 'swing trading' or 'position 
trading'.

When to use a certain level as a target and exit, whilst another level is used 
a resistance and a 'sell' zone, or support and a 'BUY' zone

A day trader will trade differently to a swing or position trader, but all 
three traders should be helped by optimizing their set-ups to the trends 
and cycles in the larger timeframes along with 5-day patterns for shorter trends.

Without an understanding of the methodology and 'set-ups' within a 
muti-timeframe model you’ll continue to struggle to use the levels 
regardless how ‘captivating’ they look.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Early move down into the 5-day lows and a reversal and higher Daily 
close in US markets

That down move and reversal upwards on Wednesday was part of a 
2-day pattern play (higher Daily close) but I must admit I was surprised 
by the extent of the reversal upwards because of the monthly high resistance.

August highs continue to resist price from rising at this stage.

The rest of this week can continue to consolidate in a tight 
5-day pattern and the next two days remain range bound below 
August highs.

If this happens then I'm looking for next week to sell down into the 
Weekly 50% level.

This usually happens when a 5-day pattern (Weekly timeframe) can't 
break Monthly resistance, then following week often reverses downward 
into Trailng support levels (Weekly 50% level)

*So far, this week has see a higher Weekly open and a 2-day 
reversal down into the 5-day lows from august highs.

A 3rd Day UP move from the 5-day lows and back above the 5-day 50% 
level and higher Daily close.*.

If this current price action was occuring anywhere else I would
 favour Thursday and then Friday to continue higher (1026), as part of the 
3rd Quarter UP move, and that's still a possibility.

However, because of the August high resistance levels it makes that 
higher weekly close all that harder.

Thursday's 5-day 50% level will be the trend guide on any further rises or 'consolidation'

*Note SPI:- * The past 3 days has seen the August highs @ 4313 resist price but not follow through on the downside.

Today will open above August highs, but also above the 5-day high 
from Wednesday, which doesn't usually favour price dropping below 4313.

And reach 4400 quicker than I wanted it to


----------



## aussiemo

Tks guys for the prompt replies.Was on the road latter ytday.

Frank,

I have noted that 2 members have written code using Pivot points resistance and support for AB.They comment that it is not as good as yours.
I noted that in your bk. you have given coding presumably for users to put into their own charting software. What Charting software is best suited for this code. Are using purpose written software for your model or is it a plug in on a generic charting package.

Thanks
Mo


----------



## Frank D

*SPI Monthly and 5-day pattern*

SPI continues with the Wednesday high breakout and into Thursday's highs.

There is still a weekly close to determine how far the UP move will continue 
in the short-term

If there is a lower Weekly open below 4313 because US markets
 can't breakout of their August highs, then there is a potential to rotate back 
down based on the US markets 5-day pattern below August highs, as described in the previous post.

If US markets continue to follow a higher friday close, then it's obvious 
the SPI is going to continue up.


----------



## Frank D

*SPI Monthly and Yearly*

SPI Completes the 3rd Quarter move into the Yearly 50% level @ 4455.

That was my entire 3rd Quarter pattern, which occurred much quicker than 
I wanted it to.

My preferred play was the reversal down from August highs @ 4313 
and trade longs once again off support into these highs based on the 
2 month higher high pattern into the 4th quarter.

This now completes the 3rd quarter move, and I won’t have a view until this month ends or even the next quarter begins.

Exact same pattern in 2003 stalled at this precise level and reversed
 down into trailing support levels and then continued higher in the 
following Quarter.

*However, US markets are still short of their Yearly reversal targets.*


----------



## Frank D

*SPI Monthly and 5-day pattern*

SPI continues up from yesterday's breakout and the extend pattern
 into Friday's highs & spiral top.

Spiral top high (Friday high 4475) and price completes the range @ 4432, 
and now below 4455 (Yearly 50% level)

My view that whilst below 4455 it's trying to move back to retest 
yesterday's breakout.

This could stall @ 4404 (target) or continue down into the 5-day 50% 
levels @ 4371 in afternoon trading.

*Note:- a spiral low @ 4432 and back above 4455 could attract buying, but personally I'm not interested in trading any longs *


----------



## Frank D

*Financial Index *

This entire rally in the 3rd quarter were lead by Financials, and I thought that would be the case with the 'thrust' pattern' set-up.

Friday's highs in the Index in my opinion is probably going to be the highs for a number of weeks if not months.

If anyone is interested I have 4 different patterns to play out over the 
rest of 2009 and into 2010, which will have bearing on how I will trade 
the banking stocks once again.

Personally, I wouldn't want to BUY (trade) into banks again this Quarter...

Full report click here...  http://austindex.blogspot.com/


----------



## Frank D

*SPI Monthly and 5-day pattern*

I'm bearish on the market since Friday's highs, but it's a bit early to tell if 
the SPI will continue down.

This is because the current price action is moving back down to retest 
last Thursday's 5-day breakout, which often occurs:- 5-day 
breakout (Thursday) moves up into the next day's 5-day high (Friday)
 and then reverses down to retest the break (Monday)

This price action has completed, and a bullish market would continue 
upwards, if I was expecting the market to go higher. But I'm not in this Quarter.

Because price has already completed the move in the 3rd Quarter, I 
would continue to look for 'short' set-ups at this stage in the 5-day 
pattern.

US markets will have a huge bearing on the price action:- small 5-day patten and failure to 
breakout of the August highs on Friday.


----------



## Frank D

*S&P Weekly and 5-day pattern*


August high resistance, and I mentioned last week that if US markets 
failed to break the August highs by Friday then this week would most
 likely reverse back down.

This is based on the ‘tight’ 5-day range pattern, and then the following 
week price continues down.

Start of the new week and sell off starts from the 5-day 50% level.

The first confirming pattern is a break and close below the 5-day lows, 
and the first target will be the Weekly 50% level:- random 1 day support


----------



## Frank D

*SPI monthly and 5-day pattern*

Interesting pattern taking place in the SPI…

I’m bearish and my expectation is that over the next 6 weeks price is 
trying to rotate down towards the 4th quarter 50% level.

However, August highs (4313) are now playing a support role in the 
market, and today's 5-day 50% level failure to sell down on Tuesday
 could see prices move upwards once again within the 5-day range.

August high support will be dependant on how US markets respond to their 
5-day low breakout on Tuesday, as I would favour a move down on Tuesday but not necessarily a lower daily close.

*Weekly 50% level random 1 day support.*


----------



## Frank D

*S&P Weekly and 5-day pattern*

As per previous reports I’m bearish in the short-term because of the August high resistance 
and higher Weekly open ‘sell’

And confirmed with a 5-day break on Monday:- Target Weekly 50% level.

Yesterday we had a higher daily close, but the most robust sell pattern is
a retest of the 5-day 50% level and a continuation down:- same day or 
next day

I expected that down move to occur yesterday, but it's already in 
the process of moving down:- Higher daily open on Wednesday 
and continuation downward.

5-day pattern is slightly different today, because of the change in 
support, and these support levels are extemely valid in up trends, but 
are used as filters in downtrends:- optimisation.

If price is below support then there is less reason the 5-day lows will
 support the S&P on Wednesday and continue with the trend into the 
Weekly 50% level:- Higher Weekly open and continuation down

Weekly 50% level 1 day support.

If price bounces off the 5-day filter support levels (yellow) and is 
trading above Wednesday's 50% level, then the overall Weekly 'sell' 
pattern is open to RISK.


----------



## Frank D

*SPI Weekly and 5-day pattern*

I’ve been bearish since the highs last Friday but I would have expected
 price trading below 4313  (August highs) by now and not consolidating above them.

However, that continuation down was reliant on US markets moving down 
on Wednesday and not up, based on the Weekly 'sell' pattern.

The down trend reversal on the SPI will need to see the 5-day 
lows breakout, which have jumped up to be trading @ 4296

There isn't anything to suggest the S&P will move down unless it
 breaks support once again (no probability pattern set-up on open), 
however price is still below August highs @ 1012


----------



## Frank D

*SPI Weekly and 5-day pattern*

Today’s price action verifies my view that last Friday in the market was
 the high and that there is a bias to continue down 
over the next 6 weeks until the 4th quarter.

5- day low breakout and back under the August highs

Currently SPI is trading above around the Weekly 50% level, which could 
play a support role for a number of days.

Until the SPI is trading below that level or US markets the same, it looks
 like more consolidation around these highs

US markets currently have weekly ‘Hook’ patterns, so I’m not factoring 
in a DOWN day on Friday in the US, as HOOK patterns normally favour higher Weekly closes.


----------



## swm79

great commentary there Frank, "picked" it well.


----------



## Frank D

swm79 said:


> great commentary there Frank, "picked" it well.




Commentary and picking it is the easy part: - I know how to read charts

Trying to find the ideal set-up intra-day (least risk set-up) is the hard part because they don't always align.

Anyhow, I have no idea where the market will be in six weeks, but that’s 
my preferred option to take another medium term position.

I might dip my toes in before then when September rolls around, but I 
won’t BUY into the market at these highs.


----------



## Frank D

*DOW and S&P 500*

Bearish at the start of the week, until Wednesday's HOOK pattern.

As per book, Weekly 'hook patterns' favour higher Weekly closes.

*S&P 500 should reach it's own Yearly 50% level next week:- 1038*


----------



## Frank D

*SPI Weekly and 5-day pattern*

5-day range trading with today’s open above the 5-day 50% level and 
above the 5-day filters.

Continuation of the 5-day pattern into Monday’s highs.

Any reversal down from this level needs to see the S&P 500 stall and 
reverse down from 1038 on Monday, and then be trading below the 5-day 50% level by Tuesday.

I'm looking for a 3rd quarter pullback from these Yearly 50% level in 
the Australian market, but the reversal pattern is now going to be decided on
 the S&P if it follows the same pattern once it hits the Yearly 50% level.


----------



## ozbecool

I browsed some of the above posts and I had a look at those fancy charts and numbers. Can somebody please tell me in plain language / a few simple sentences: what is the conclusion of all this , as for TODAY


----------



## ThingyMajiggy

ozbecool said:


> I browsed some of the above posts and I had a look at those fancy charts and numbers. Can somebody please tell me in plain language / a few simple sentences: what is the conclusion of all this , as for TODAY




Have a look at Franks blog in his signature, he also has a book you can buy there. Might make things a bit clearer for you


----------



## peter2

Simply stated, it means that price could go up, down or sideways and that the ASX will probably follow the US market.

Frank trades specific setups that are based on his dynamic levels of support/resistance ("fancy charts and numbers") and is generous enough to share his charts on this thread.


----------



## Frank D

*S&P 500 Monthly and Weekly*

S&P Yearly 50% @ 1038 has reached after last week's HOOK pattern.

This has completed my 3rd quarter pattern from March lows.

At this stage for any continued weakness in the S&P, price needs to 
be trading below the August highs @ 1012 by the end of the Month, and
 be continuing down the following week.

Otherwise, a Monthly close above 1012, can see the S&P follow 
the September pattern into higher highs.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI back into the 5-day highs and the Yearly 50% level.

It's too early to tell whether there is a double top at this level until price 
is trading back under the 5-day 50% level.

And that will depend on the direction of US markets on Wednesday.

I was a lot more confident in the reversal down last time, even though 
the exact same patterns of the 5-day highs have stalled price from rising, previously @ 4475 and 4457 today.

At this stage with the market nearing the end of August and trading 
above the August highs, a breakout and extend pattern in September
 can occur towards next months highs.


----------



## kotim

An interesting conjunction coming up if we get there is that your yearly 50% on the all ords sits at the same level as the 50% retracement of the wave 2 top of 6060 odd down to the March lows and also the 38.2 retracement of the whole bear marekt is in the vicinity of 4536 which is only 40 odd  points below your 50% level of 4578.  Should see some resistance up there.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Based on the close above the monthly high in August (4313) I would favour
 a continuation towards the September highs

Based on a higher Weekly open and reversal down from the 5-day 
highs today, I would like to see a move towards the support levels 
@ 4363-94

Those levels are my trend guides (support) for any higher moves in 
September.

If the SPI ends up consolidating above 4455 over the next few days, there
 is probably going to be a higher move towards the September highs 
next week.


----------



## Frank D

*S&P 500 and 5-day pattern*


Early sell pattern from the 5-day 50% level down into the 5-day lows
 saw buyers come into the market using support:- 5-day lows and 
Weekly 50% level.

However, as pointed out Tuesday was part of a 2-day stall set-up from
 the higher weekly open, which often results in a lower daily close.

If Tuesday had remained above support levels, then Wednesday would normally continue into a higher Weekly close.

Tuesday instead has closed lower breaking support, with now the bias 
to continue down towards September 50% levels.

Support now becomes resistance for this week (1012)

This is the first break of the Weekly 50% level (brown) since the June's 
highs.

And important because it is occuring after reaching the Yearly 50% level
 @ 1038


----------



## Frank D

*SPI Weekly and 5-day pattern*

Whilst the SPI is below the Yearly 50% level @ 4455, the bias is to drift towards the 4th Quarter 50% level (september-October 50% level)

However, that needs to see Support fail on a lower Weekly close.

A weekly close above 4455 and it's more 5-day pattern swing trading for 
the next few weeks, with a bias to rise upwards into the 4th quarter towards 4600+


----------



## Frank D

*SPI Weekly and 5-day pattern*

Lower Weekly close but still trading above support levels on SPI.

This was set-up with the 5-day pattern  @ 4474 with an extended down
 move towards 4409.

S&P 500 still trading below Support and I have the same expectation of 
a lower Weekly close.

Maybe it might close around the middle of the 5-day range, but based on 
this week's trading and 'no' HOOK patterns in the first 3 days, normally this
would lead to more weakness into Friday's close.

*Weekly report out tomorrow*


----------



## MRC & Co

Hope that S&P analysis is right Frank, I've got a lot riding on it!  Eek.


----------



## nunthewiser

MRC & Co said:


> Hope that S&P analysis is right Frank, I've got a lot riding on it!  Eek.




personally thinking because of the long weekend in the u.s a few would be reluctant to stay in many actual trading positions , personally expecting a weak (red ) night in the u.s and am currently positioned for that also 

i could be wrong but thats where probabilitys have placed me

sorry frank for interupting just giving my 2 cents on where i see tonight also


----------



## ThingyMajiggy

MRC & Co said:


> Hope that S&P analysis is right Frank, I've got a lot riding on it!  Eek.




the es actually looks quite strong right now, but I hope its a red day for you  

keep it up frank.


----------



## Frank D

*S&P 500 Weekly and 5-day pattern*

S&P didn't have a lower Friday close. 

The set-up was for a retest of the Weekly 50% levels, which was 
matched with the 5-day 50% level:- higher Daily open and 'sell resistance'

Normally this would result in a move down into friday's lows and a rotation towards the September 50% levels.

That might still happen this month, but not based on Friday's close.

There was some early selling on Friday but no follow through on the 
downside, and the S&P closing in the middle of the range.


*Weekly Reports out now...*

http://austindex.blogspot.com/

http://www.usindexweekly.blogspot.com/


----------



## tech/a

MRC & Co said:


> Hope that S&P analysis is right Frank, I've got a lot riding on it!  Eek.




Based purely on Franks analysis?


----------



## MRC & Co

tech/a said:


> Based purely on Franks analysis?




lol, of course not.

Took a bit of a hammering on that one!    But still in the shorts.


----------



## Frank D

tech/a said:


> Based purely on Franks analysis?




Depends on where you took the shorts?

Did you take the shorts on the Yearly 50% level @ 1038?

Did you take the shorts on the 5-day 50% level on Tuesday @ 1024? 
 (2nd day sell pattern from a higher Weekly open)?

You would be still in the money…

If you took shorts on the next Set-up you would have been stopped out, 
but initially you would have been up $400 US per lot on Friday.

If you are still short from higher prices (1038 or 1024), then you would still 
be in the money, but now the probability of going down decreases?

BTW,

I already know how to trade the entire week next week based on 
two probable set-ups.

I would like to post it, but I have a gut feeling that Tech/A will once 
again criticize it, for the simple reason he just doesn’t get what 
probability and objective pattern recognition is.

He prefers to use an illusory & subjective methodology which is contantly curve fitted thereafter. 



If anyone wants it, just PM @
frankied@tpg.com.au

I’ll send it Monday afternoon.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI rising from last week's support and this week's lower weekly open, 
but confirmed with today's Hook & break of 4482 on open.

The continuation upwards is helped by this week's mini 'thrust' pattern in 
the US markets after Friday's HOOK back above support, and expectation
 of a move towards the Weekly highs.


----------



## tech/a

Sad really I asked.



> Based purely on Franks analysis?




You replied



> I would like to post it, but I have a gut feeling that Tech/A will once
> again criticize it, for the simple reason he just doesn’t get what
> probability and objective pattern recognition is.
> 
> He prefers to use an illusory & subjective methodology which is contantly curve fitted thereafter.




To which I replied.

https://www.aussiestockforums.com/forums/showthread.php?t=16357&page=15

Post 288

More illusion and subjective methodology.
Love it!


----------



## Frank D

tech/a said:


> Post 288
> 
> More illusion and subjective methodology.
> Love it!




I would hope you are making money in these markets, there are a ton
 of opportunities to do so.

I’m interested in seeing whether those trades have anything to do 
with EW, or simply using tradional T/A:- trends & breakouts.

*DOW Weekly and 5-day pattern*

US markets following last Friday's HOOK close back above support, with
 the expectation that price is moving towards the Weekly highs this week.

At this stage price action remains range bound within the 5-day range.


----------



## tech/a

I'm actually limiting my analysis to purely illusionary and subjective.
Why do you care Frank?


----------



## Frank D

*S&P Weekly and 5-day pattern*

"_Monday has a 'Mini Thrust' pattern because of Friday's close above
 the Weekly 50%.

A mini Thrust pattern is a rally into the Weekly highs in the first two days
 of this week.

If that rally occurs and price hits the Weekly highs by Tuesday, then
 my expectation is that price will once again drift back down into the 
Weekly 50% level by Friday. (Set-UP A)"...... 6th September report_


*Set-up A* has finally played out, but not in the first two days.


At the start of the week the move was based on rising into these highs 
in the first two days and then closing lower by Friday back around 
the Weekly 50% level once again.

The 2nd part of the set-up to close back around the Weekly 50% level
 has occurred too late in the trading week for the market to move all the
 way back down, nevertheless the first stage of the set-up 
has completed for this week.

Friday can follow a lower close around the 5-day 50% level, or it
 can continue to move towards the September highs:- no probablility
 on Friday's close.

This week's resistance 1043, but that resistance will shift based on 
Friday's close.


----------



## Frank D

*SPI Weekly and Primary Range filter*

As per Weekly report, expectation of a 2-day reversal pattern from this week's higher open towards the 50% levels.

If the market is going to follow the September pattern upwards then 
4488 should hold and then look for longs set-ups from Wednesday, helped 
by US market set-ups.

Otherwise a 2-day reversal and close below 4488 normally continues 
down.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Last week’s view was a mini thrust pattern into the Weekly highs and
 a reversal back down into support.

S&P hit the highs on Friday and Monday started from a lower open at 
support levels.

At this stage S&P looks to be continuing higher into and September highs
 @ 1062


----------



## Frank D

*SPI Weekly and 5-day pattern*

This week was about the 2-day stall reversal from last Friday’s highs, and
 a continuation up *towards September highs from Wednesday*.

Today started with price above the 5-day 50% level @ 4572,  but
 confirmed with the HOOK pattern break above 4588 and rally into the
 highs on Wednesday’s highs @ 4633.

Random resistance around this level, but I’m looking for higher prices 
into September @ 4656, which could easily occur today.


----------



## Frank D

*S&P Weekly and 5-day pattern*

S&P reached the September highs and has stalled around these levels (Thursday's highs)

S&P starting the week from a higher Weekly open and below the
 September highs @ 1062, and normally I would look for a short-term 
pullback the begin the trading week (2-day reversal)

However, unless the S&P breaks the 5-day 50% level on Monday, I'm 
leaning towards a higher highs into Tuesday.

I won't have another ideal set-up until this month ends and the next 
begins. 

It's back to trading the 5-day patterns until September ends


----------



## Frank D

*S&P Weekly and 5-day pattern*

I mentioned on Saturday that I was looking for higher moves in the S&P on Tuesday.

This was set-up with Monday’s early push down (higher Weekly open) 
and late daily close above support. This price action of early selling and 
then a higher daily close often sends markets higher with a 
continuation towards the 5-day highs on the next day.

Once Monday's price action occurred the bias was to continue higher on 
Tuesday towards the highs, but the follow through didn’t play out.

Normally what I would look for in this pattern would be a Tuesday UP day 
into the 5-day highs and resistance with some selling, however the 
5-day 50% level on Wednesday would then be the critical level, as this 
often leads to a break resulting in a change of the Weekly trend into a
 lower Friday close because we are already trading around higher
 timeframe levels (September)

Because Tuesday hasn’t completed the move into resistance there is now 
a bias to follow the Weekly range higher


----------



## Frank D

*S&P Weekly and 5-day pattern*

Expected up move and sell pattern occurred 1 day late using the 
2-day pattern rise and 5-day high sell, but the important pattern 
was Wednesday’s break of the 5-day 50% level and move down towards the
 5-day lows..

As per the pattern, whilst price is below 1062, I would look for a 
continuation down towards a lower Friday close, which could end up 
around the Weekly 50% levels.

Because there isn’t a break of the 5-day lows, the market can still 
remain range bound within the 5-day range over the next two days.

*Next Set-up next week...*


----------



## Ato

Hi Frank

Sorry, but I havent had the time to read through your thread here in it's entirety just yet. So apologise if the information I ask is already existent.

I am wondering about your book/s. I remember reading that you were writing a second book. Is that out yet? Does it detail your method, like your first, or is it about a different subject?

Also, I'm very interested in purchasing your first book and learning about your method to see what I might make work for me, but I live in Japan. Do you ship to Japan?

Cheers


----------



## Frank D

Hi Ato,

I’m still in the process of writing the book (slowly, very slowly). It could still be months away.


The contents are based on the same Model, Methodology and Principles.

The entire book will be based on set-ups, set-ups and more set-ups, and
 pre-empting those set-ups in advance and how long to hold those 
set-ups for, whether day trading or longer.

The important part on any set-up is the entry, timing and then trade management, and that’s the focus

There are a number of set-ups that I haven’t discussed in either of the 
two books for stock traders, and also for day traders there will be 
2-day pattern trading within the 5-day range for futures.

For example, when I go to bed and place a limit entry trade in either the 
S&P or DOW (not screen trading) I want to know where to place it, how 
far my stops are going to be so that I don’t get ‘taken’ out of the trade, 
and whether I take profits during the same day (range bar and ATR trading) or whether to hold over 1-3 days based on Weekly pattern trading.

It’s important for any overseas trader to analyse the price action in the 
US, because pre-empting a pattern in the S&P will dictate trades in 
Australia or Japan

For example a 5-day high breakout in the S&P will normally continue
 higher over the next day or 2. If that’s the case, even if you don’t 
trade futures,it allows you to take a position in a  stock or stocks’ and hold an expected higher open the next day.

If there is an expectation of a market reversal in the short term like
 this week, then there is a good reason to trade manage any positions in 
your home country.

The book will be in PDF version, so it won’t have any trouble of going to 
Japan.


----------



## Frank D

*DOW Futures and the 5-day pattern*

This week in US Index futures was about looking for a continuation down into
 a lower friday close after the expectation of an early rise on Tuesday
 and reversal pattern break on Wednesday.

US markets pretty much followed the 5-day pattern precisely this week and into Friday's lows.

Based on this week's price action I would favour more weekly 
rotation starting with a bias of a 2-day UP move from the lower Weekly
 open.


----------



## Frank D

*DOW Futures Weekly*

As per last week's view of reversing down into the Weekly 50% levels, 
and then swinging back upwards this week in the 2-day pattern reversal 
set-up, we are now coming into the end of the 3rd quarter and starting the 
4th quarter.

In the next 3-month cycle my view is that we are moving into higher highs...

However, my preferred pattern would be during October sometime, a 
move back down to retest the Weekly lows (shown below), find support
 using a lower weekly close set-up, and then continue upwards into the higher
 high pattern in the late October/November

When will that happen I won't know as yet, but it's something i'll be 
keeping an eye on during any 5-day pattern set-up starting from 
October. 

In the short-term after Monday's 2-day pattern reversal  pattern, the next  set-up won't occur until next week.

Back to 5-day pattern 'day-trading' from Wednesday.


----------



## Frank D

*S&P Weekly and 5-day pattern*


The normal pattern on any 2-day reversal from a lower Weekly open is 
to continue towards the Tuesday highs and then reverse back down into the 5-day 50% level on the same day.

This is often based on the line of least resistance within the monthly timeframe.

As we can see the line of least resistance is around 1062, not allowing the 
2nd day ‘set-up’ to play out, instead remaining within a 2nd day stall 
pattern coming into Wednesday and the last day of the 3rd Quarter. 

September resistance shifts higher.


----------



## Ato

Thanks for the detailed reply, Frank. I'll keep an eye out on this thread, watching for your post saying you've finished the book.

Cheers


----------



## Frank D

*S&P Weekly*

S&P remains range bound between the September highs levels and the Weekly 50% levels to
 close out the 3rd Quarter.

There is an expectation during the 4th Quarter that the market will 
continue higher during October/November, this is helped by 
resistance disappering on Thursday.

However, my preferred pattern before any continued UP trend would be
 to have a lower Weekly close and test the Weekly lows in the early part 
of the Month, and then continue higher in the later half of 
October/November.

Whether the preferred pattern plays out, I'll just have to wait and 
see, because the line of resistance for September has ended, and the
 trend will follow the line of least resistance.


----------



## Frank D

*SPI monthly*

SPI continues to consolidate over the past couple of weeks between 
the September high levels.

There is an expectation that price will continue towards the October 
highs based on the *breakout and extend pattern *from July:- break 
in the 3-month cycles will normally  continue to move towards the highs in the
next 3-month cycle.

Along the way I like to have preferred patterns to trade the larger cycles,
 my first preferred pattern was the Yearly 50% level @ 4455 to resist
 price and then trade longs from the monthly 50% level for the next
 move upwards.

However that didn’t occur, and once above 4455 at the end of August 
the trend was going higher, helped by the S&P moving into it’s own 
Yearly 50% levels which was lagging at the time.

Capturing the rest of the trend is based on the smaller thrust patterns 
using the weekly 50% levels and Weekly open strategies, helped by 
set-ups within the S&P 500

And the same applies in the 4th quarter.

Expectation of a higher move to complete the break and extend pattern 
from July, but as pointed out in the previous post, my preferred pattern is 
to see a ‘dip’ early in October.

A dip doesn't have to be large, i would just like to see a retest of the 
3-week lows.


----------



## Frank D

*DOW Weekly and 5-day pattern*

Early push down in October and into the Weekly lows.

I have an expectation that US market will continue higher into October, 
but that's going to depend on how Friday closes.

There is a potential move down into the October 50% level, however, 
if Friday & Monday ends up being supported around this week's lows @ 9398 
(5-day low on Friday)

Then I need to see a Weekly HOOK pattern back above 9581 (next Week),
 to get the last leg of the July breakout pattern to complete higher in October. 

*Note:-* it not a forgone conclusion that the last leg will complete 
upwards because the S&P has failed at the 3-year 50% level (precise 
highs @ 1073) and now below the Yearly 50% level @ 1038 starting the 4th quarter.

Therefore next week's HOOK has to be back above 1038 on the S&P, otherwise have to respect the Primary Trend.


----------



## Frank D

*S&P Weekly and 5-day pattern*

S&P has moved down into the 3-week lows (1012), which is the pattern 
that I wanted to see happen at the start of October.

In a Bull market, this level will normally hold & form a support base over 
the next 3-days and then continue higher in the same month to complete 
the 3-monthly cycle:- break and extend pattern from July
 into October/November highs.

In a bull market what I would normally look for is the *3-day high range 
to drop below 1038-1039 and then trade longs on the break*. This
 is based on *verifying support on a large timeframe (weekly), and 
then validate support in a lesser timeframe:- 3-day high breakout.*

However, the S&P isn’t in a bull-market trend, all it has done is reverse 
back into the Yearly 50% levels and reject back down. The Primary cycle 
and trend is defined by the Yearly timeframe.

If the Trend is going to continue down then the same pattern can
 occur:- consolidate for 3-days below 1038 and then continue down 
once again towards the October 50% level.

At this stage the important part was Friday remaining above
 1012 and Friday's 5-day low support.


----------



## Frank D

*S&P Weekly and 5-day pattern*

3-week low support and an early rotation back into 1038.

As per my ideal pattern, I would like to see the 3-day cycles drop down 
and match 1038 and then look for any breakouts if US markets are going 
to go higher in the 4th Quarter.

3-day cycles @ 1055.

Tuesday is either going to stall below 1039, and then see the 3-day 
cycles drop down on Wednesday, and then the next set-up will be
 on Thursday.

or Tuesday goes looking for the 3-day cycles @ 1055, as last week's 
support has been validated and rising up from a lower Weekly open. 

However, based on today's close below 1039 I don't favour the happening. 
If Monday had closed above 1039, then a move towards 1055 is more likely.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Expectation of a 4th Quarter up move after reaching the 3-week lows
 last week, however based on Monday’s close below1039, I was expecting a 
3-day drop pattern and then trend to continue higher from Thursday.

However, once above 1039 on Tuesday the 2nd day reversal pattern 
back towards 1055 played out.

At this stage US markets look well supported with an expectation 
price should follow the last leg of the July breakout pattern into
 October highs.

If the trend is going to continue higher, then we need to see a daily
 close above 1055 and then a short-term 2-3 day consolidation above 1039.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI completes the same moves as the S&P with a swing back into the 
3-day cycles (Thursday’s highs)

A close above this level today (4763) and it will swing the 3-day
 cycle around,  and even though I’m bullish in the 4th Quarter I’ll be 
looking for any hint of a short-term reversal pattern from tomorrow back into 
support levels.

I wanted to see the S&P close above the 3-day highs @ 1055 
(closed above today), and then look for a short-term 
 reversal into support levels from the next day.

This should hopefully provide another swing support for a 
continuation upwards in October and complete the *breakout and
 extend pattern from July.*

However, a lower Weekly open from Support & 3-week lows 
(US markets) often moves up into a higher Friday close, as the line of 
least resistance from September has disappeared.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Selling on the higher open on Friday after yesterday's close above the 
3-day cycle  @ 4768.

Normally I would look for Set-up A to playout and then move into 
Set-up B for next week

However, It wouldn’t surprise me to see the SPI remain above the 3-day highs today, as the Range down matches.

Yesterday saw US markets have some early resistance on Thursday, as I 
was looking for a short-term reversal pattern, but when Thursday 
moved down but then closed back above the 3-day highs, this normally
 leads to a higher move on Friday, which is what normally happens after
 a bounce off the 3-week lows.


----------



## Frank D

*S&P Weekly and 5-day pattern*

As per Weekly report, there was a bias to continue upwards over 
Monday and Tuesday.

Price has remained range bound within the 5-day range, along with the 
highs (random resistance).

I don't have a 2-day probability pattern for the rest of this week, other 
than using the levels:- support/ resistance.

If the S&P is going to reach the October highs it might take another week 
for that to happen:- shift in the Weekly range.

1083-1092 remains resistance levels for this week


----------



## Frank D

*S&P Weekly and 5-day pattern*

S&P continues to creep upwards as reporting season breathes more life 
into the markets.

Wednesday pushed upwards hit resistance in the 5-day pattern and 
some early selling pressure, but a late move above will push prices higher 
on Thursday.

As of Thursday, I would be to look for the same patterns and continue to 
use market dynamics as resistance levels in the 5-day pattern, and begin 
to hold positions contracts into the close.

That’s simply because on Thursday, the 3-month cycle from July into October will have played out @ 1092:- break and extend pattern.

There’s no view that there will be a major reversal down on Thursday or 
even this week, but it’s something to be aware that any short-term 
reversal being 1-2 days or more will start from a level within the model.

I have a 4th Quarter extension pattern that can take the S&P towards 
1141, but if it’s going to go towards that level I feel it's more likely to 
kick upwards from November.

At this stage I have 3 Weekly set-ups coming into play based on this 
Friday’s close and this new 3-month cycle (4th Quarter)


----------



## Frank D

*SPI monthly and 5-day pattern*

As previously explained, October highs complete the 3-month break 
and extend patterns from July, and I would begin to look for
 another consolidation pattern or reversal patterns into the November 
50% levels (or lower)

That will now depend on the S&P 500.

I made the assumption that a Wednesday high breakout will move higher 
on Thursday. I also made the assumption a couple of days ago that once 
the S&P reaches 1092 on Thursday, the 3-month cycle has ended and 
there is a potential reversal down.

I don’t know if that’s going to happen, all I can do is work with the
 lines of resistance, my ‘assumption’, the ‘price action’ unfolding, and
 run stops accordingly.

Otherwise there will be another extended pattern upwards in October @
 5032 in the SPI, if US markets follow the continuation of higher prices 
on Friday.


----------



## Frank D

*SPI monthly and 5-day pattern*

As per weekly report, my expectation that this week would remain range
 bound  within the 5-day ranges and consolidate around the upper
 resistance levels until November.

Same patterns in the US markets with intra-day swing trading within the 
5-day range.

Today being Friday there are 3 options based on the Weekly close in the 
S&P tonight

1. Friday closes higher
2. Friday closes in the middle of the 5-day range
3. Friday continues to rotate and moves down into a lower Friday close.

Because the markets are already trading around October resistance levels, 
I would prefer to trade options 2 & 3 rather than 1.


----------



## Frank D

*S&P monthly and Weekly*

US markets reversed down on Friday and into a lower Friday close, but 
I expected more selling today with price to be trading or closing around 
the Weekly 50% level. 

The 3-day sell cycle and higher Friday open normally favours a lower 
Weekly close as price is trading around monthly high resistance levels.

I only finished writing a section in my new book “ *TIME, PRICE, 
SUPPORT, RESISTANCE*, and reversal patterns after the completion of the 
3-month cycles…

Each reversal down started from this exact same pattern:- higher 
Thursday close and Friday sell off.

And the trend continues down early next week with a break of the 
Weekly 50% level and a short-term mini collapse down into the Monthly 
50% levels (SET-UP A)

Except this time the exact same pattern hasn't occurred as previously 
with the follow through down into the weekly 50% level not occurring

However, next week's 50% level is the one to watch with the potential 
*SET-UP A* in play.

Normally the break occurs in the first two days of the new week, so i'll have a
fair idea whether *SET-UP A *is going to occur, or 
price continues to consolidate and remain with *SET-UP B.*


----------



## Frank D

*S&P Weekly and 5-day pattern*

_"This often happens on Tuesday after Monday initially moves down into 
the Weekly 50% level and finds support, and then Tuesday breaks 
support and trends down (large trending day)

Monday:- price normally will try and rise upwards, therefore it won’t 
surprise me to see a Spike upwards on Monday using Yellow Support in
 both markets

DOW spike and resistance 10021
ES spike and resistance 1086.

If there is a spike upwards and then price should continue down and
 into Monday’s 5-day lows, then I would suggest holding positions 
open because Tuesday might surprise a few people. 

Depending on how many contracts traded:- partial exit the 5-day lows
 on Monday"_ *Monday's Premium*


Everything on Monday has played out precisely, from the rise upwards 
on Monday and the ‘spike’ into upper resistance levels in both the DOW 
and S&P, and both markets have reversed down into the Weekly 50% 
level closing on the lows.

If US markets are going to follow *SET-UP B,* as per the Weekly report, 
then Tuesday will swing upwards off these lows and close back above the
 5-day 50% level.

However, we aren’t trading SET-UP B, *we are trading SET-UP A,* 
and traders should have partial exited around Monday’s low and or 
the Weekly 50% level and hold…

_Because Tuesday might surprise a few people?_

Well if it follows *SET-UP A,* Tuesday’s trending down day will be 
back around the 3-week lows on the same day and could even be lower
 by Wednesday.


----------



## Frank D

*SPI monthly and Weekly*

SPI continues with the reversal down after completing the 3-month cycle breakout pattern from July into October.

I expected more weakness in US markets on Tuesday, and for the SPI 
to already be trading around the 3-week lows by Wednesday and heading 
lower by Friday.

Hopefully the S&P continues down and provides the trending pattern that 
I expected yesterday, and not remain inside the 5-day range and more rotation until November.

I want price to drop as far as possible this week so the volatilty comes 
back into the market and provides more ideal swing trading for the rest 
of this quarter.


----------



## Frank D

*SPI Monthly and Weekly*

SPI completes the move down into the 3-week lows, and there is still 
an expectation of lower prices towards 4398 by Saturday.

These 3-week levels are robust support zones in up trends, but not so 
much when 3-month cycles end, as I’m expecting these levels to fail 
and continue down towards the monthly 50% levels.

At the start of October if you recall, my expectation was a 
short-term pullback into the 3-week lows for support and for a move 
upwards in October to complete the 3-month cycle tops as part of 
the breakout pattern from July and into October.

This played out precisely.

Once the 3-monthly cycle was completed (October highs), these 
3-week lows are first target pullback zones, with *SET-UP A* 
favouring a move back down into the monthly 50% levels by Saturday/ Monday.

Doesn’t leave much room for another +200-point fall with 1 1/2 days 
remaining until the end of the month, but it can happen.


----------



## Real1ty

This is a very interesting thread to follow and you have made some very accurate calls Frank. I would think the most accurate on here.

Thanks for the contribution.


----------



## Frank D

Real1ty said:


> This is a very interesting thread to follow and you have made some very accurate calls Frank.




I wish they were more accurate, especially last night on the S&P.
*
S&P Weekly and 5-day pattern*

S&P has followed a higher timeframe support level @ 1038 and a swing
 back towards the Weekly 50% levels.  (Yearly 50% level 1038)

These Weekly 50% levels are the trend guides for the rest of this week.

It wasn’t the pattern that I wanted on Thursday, as I was looking for 
the market to complete the move into Thursday’s lows, which matched the 
3- Week lows around support zones.

I’ve been bearish all this week and this UP move on Thursday isn’t a 
concern in a downtrend just yet, because often price can have a higher
 daily close and then continue down into a lower Weekly close on Friday
 after retesting the 50% levels

However, the concern for any downtrend is, price shouldn’t be trading 
above the 5-day 50% level, as a Weekly down trend will retest the 
5-day 50% level and then continue down the same day or the next.

And if Thursday midnight closes above the Weekly 50% level, then there is 
a potential higher weekly close back around the 3-day cycle highs 
@ 1088

Not good for short-term bears, as price is rising up from the Yearly 50%
 level and still above the monthly 50% levels - *SET-UP B*

And also not good for lower swing traders, as I had ideal long swings 
trades from lower prices next week (bummer)


----------



## Frank D

*S&P Weekly and 5-day pattern*

As I mentioned yesterday, Thursday's UP day wasn't a concern, as I've 
seen these patterns before.

Thursday just gave another opportunity to get back into the trend.

*Friday*:-Higher Daily open using resistance levels (weekly) with
 the expectation that price would continue down into a lower Friday close 
and follow the original Weekly direction.

Yesterday closed above the 5-day 50% level, but Friday opened
 below forming a thrust pattern into the lower Friday close.

The only thing I'm not happy about this week's trading, was it didn't go 
down more: Tuesday should have crashed and be trading below the 
3-week lows.


----------



## Frank D

*SPI Weekly and 5-day pattern (day session)*

SPI continues to consolidate  around the November 50% level, but still in 
a down trend in the lesser timeframes (below 50% level)

There is a breakout in the weekly lows from last week so there is 
an expectation that price will continue down into the Weekly lows this week 
@ 4414. (3-day sell cycle)

This week has seen the exact same patterns, early rise to complete the 
r42 highs and then 42-point reversals down and more consolidation.
 (#1. #2, #3)

5-day channels are tightening (Blue) so I’m looking for a breakout 
shortly, and hopefully a move down into the Weekly lows.

For any UP trend to continue it needs to be above the resistance levels 
and consolidate for a number of days, and I can't see that happening just
 yet.


----------



## Frank D

*SPI Weekly (day session) and 5-day pattern*

This week has seen the SPI remain below a number of key levels @ 4573-76

Below the 3-week lows
Below the 3-day highs
Below the 3-month 50% levels

All at the same price @ 4573-76, so this level was a key level 
for this week & probably the month.

Therefore any UP trend to continue needed to be moving above this level 
and heading towards 4610 (R42 points) and continuing higher on Friday.

Trend guide and support 4561 today (5-day 50% level).

My Preferred pattern today was a rally on open and continuation of the
 trend up towards the Weekly 50% level on the same day.

Instead it was choppy around the top for most of the day around 4575 
with late buying in the afternoon (but a lack of volume) until the market closed @ 16.10 and then the SPI kicked  higher into the close.

SPI is still below the Weekly 50% levels.


----------



## Frank D

_"Robust swing points to trade longs from lower prices
 from next Friday. The trend would continue down another week, but 
then provide support *next Friday and for a large 3-day counter-trend
 rally back upwards the week after that*" .....31st October US Weekly._

*SPI Weekly and 5-day pattern*

5-days later and the SPI has a higher Friday close (not lower) but the large
 3-day rally begins this week with the confirmation of the 5-day high breakout on Monday

Expectation that the SPI should continue to move towards the 
November highs, helped by the S&P remaining above their weekly 50% 
levels on Monday.

*Important support zones*:- Yearly 50% level @ 4455 tested 
and support, confirmed with price closing back above the 3-week lows
 with Friday's close, and trading the november 50% levels


----------



## Frank D

*S&P 500 Weekly and 5-day pattern*

S&P continues with *SET-UP B*, with Monday's breakout and 
extension upwards into Tuesday.

This is part of a 3-day rally this week, after last weeks November 50%
 level support.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI continued the 3-day pattern with today's open and range towards 
the spiral top @ 4775...

However, it was a bit disappointing that price didn't continue higher 
on Wednesday and follow the move towards the highs @ 4810+

That completes the 3-day UP move this week and my probability pattern
 for this week.

Therefore any continuation upwards will have to be based on price action
 in the S&P 500, which already trading around resistance levels.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Weekly high resistance @ 1103 and reversal down into support @ 
1092.25.

Ideally the pattern would have been for the S&P to break 
support and reverse back down into the 5-day 50% level, as part of 
a reversal down into the Weekly 50% levels by Friday.

Today's price action suggests that the S&P will hang around these highs 
until Friday.

~~~~~~~~~~~~~~~~~~~~~~
SPI continues into Wednesday's highs @ 4817 overnight.


----------



## Frank D

*SPI Weekly and 5-day pattern*

As per my 3-day pattern rally this week (exit stocks on a higher Daily 
open on Thursday), expectation of a 2-day reversal.

At this stage this is viewed as a 2-day reversal pattern back down into Weekly 50% level
 support levels.

If the market is going to go higher, then next week's open should align with support for a
 move towards the November highs.

If the SPI is opening below 4615 then there is probably more weakness 
to come, depending on the price action in the S&P 500 over the next 
2-days.


----------



## Frank D

*S&P Weekly and 5-day pattern*

After last week's 3-day rally and 2-day reversal into Friday's 5-day 
50% level, US markets and the SPI are follwing in the Weekly dynamics 
into higher highs early this week.

As per Weekly report, S&P target in the 4th Quarter is 1126 (SET-UP B)


----------



## Frank D

*SPI Weekly and 5-day pattern*

In last week's US Index report I posted this....

_Even though there is an expectation that price 
can continue higher, that might not happen next week, as there is 
a possibility of another 5-day sideways pattern.

The most robust pattern for any higher moves upwards would be a choppy
 5-day sideways pattern with the bias to drift down into the weekly 
50% levels by next Friday...

And then continue higher the week after that using support"_

What we are seeing is the SPI follow that price action, remaining in a 
tight sideways 5-day pattern, whilst US markets continue to rise.

Normally next Monday would open around the Weekly 50% levels and 
then continue higher using Support for a continuation upwards into 
November highs and then December highs:- *2-month wave pattern 
within a new 3-month cycle  (4th Quarter)*

However, it’s the price action in the S&P that’s going to dictate whether 
the SPI follows another move upwards next week, because the S&P is 
now nearing my upper 4th Quarter targets.

If we starting seeing the S&P 500 moving down and the SPI below the
 weekly 50% levels, I’d be extremely careful with any long positions
in the short-term.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Choppy 5-days of trading and a lower close on Friday @ the Weekly 
50% levels.

In theory the trend should continue upwards and follow higher highs
 into December over the next 2 weeks.

*Ideally using Monday and a Weekly open to validate the support*

Normally you can align the price action in the SPI with the S&P 500 to 
pre-empt the move in the SPI, in this case up. 

However, the price action in the S&P 500 is conflicting, with 
yesterday’s break of the short-term support levels @ 1097.50.

If US markets follow a simiar pattern and continue down on Friday 
towards their Weekly 50% levels, then that's 200 points down which puts 
the SPI back around the November 50% levels.

Even though the S&P 500 in the short-term looks bearish and a possible Weekly trend reversal into a lower Friday close. 

It wouldn't surprise me if there's an UP day.

But it's not a 'BUY' day in my books.


----------



## Frank D

*SPI Weekly (day session) and 5-day pattern*

As pointed out early last week:- lower Friday close into support levels 
and this normally favours a lower Weekly open and a continuation 
upwards into higher highs over the next 2 weeks.

Normal price action would begin with a 2-day reversal back towards 4797, 
as the first pattern and then continue upwards in December.

However, it’s not the price action in the SPI, it’s the price action in the
 S&P 500 over the next 2 days that’s going to validate that happening.

Currently the price action in the S&P 500 is bearish in the short-term:
 - below 1097.50, and whilst below this level I have a view that the S&P
 is trying to make its way down into the Weekly 50% level over the
 next 2-days.

I have a conflicting pattern in the S&P to validate any higher moves at 
this stage in the aussie market.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Short-term reversal pattern down into the Weekly 50% levels by 
Tuesday didn’t pan out once price started the trade above 1097.50.

Above the 5-day 50% level and 3-day cycle breakout from Thursday 
@ 1097.50, and the markets are back inside the 5-day pattern and following 
the Weekly highs once again.

Even though I was waiting for Wednesday to validate if the SPI was going 
to continue higher into December, the price action in the S&P on Monday 
has answered that.

In the short-term markets look well supported, I just would have
 preferred more downside into Tuesday to trade a larger potential swing
 from lower support levels.


----------



## Frank D

*SPI Weekly and 5-day pattern*

With a lack of weakness in the US markets over the first 2-days, 
the normal cycle would have the SPI rising upwards from these levels 
on Wednesday and have a higher Weekly close by Friday.

In the larger timeframe cycles the SPI direction was going to be defined
 by the price action in the S&P 500 in the first two days. I mentioned 
early last week that if US markets remained supported by Tuesday the
 SPI was most likely continue higher coming into December from 
Wednesday.

Normally this price action in the SPI would be matched by a mirror image
 of the S&P rising up from their Weekly 50% levels and/or 5-day lows 
on Tuesday, giving more probable casue and leverage for both markets to 
continue up towards the Weekly highs by Friday

Except this isn’t the case, as the S&P 500 continues to trade around
 it’s highs coming into Thanksgiving on Thursday and half day Friday.

*Trend guide from next week will be the December 50% levels.*


----------



## Frank D

*SPI Weekly and S&P 500 Weekly*

The price action in the SPI and the S&P 500 were conflicting at the start
 of the week.

I was bullish on the SPI if there was a matching pattern in the S&P 500 
using a lower Weekly open and support.

That matching pattern will be based on how the S&P reacts the Weekly 
50% level this week and Monday’s lower open…(support)

*And how the SPI reacts to the December 50% level.( currently 
supported @ November 50% level @ 4576

Whilst below the December 50% level next week there is a bias to move down.*

If S&P find supports using the Weekly 50% level and lower Weekly
 open, which was the original view for any further gains, then the SPI 
will most likely find support on the November 50% levels and open above
 the December 50% level and push upwards into Friday.

*
This is a bear pattern to keep an eye out if that occurs*

If next week moves upwards and closes on it’s highs on Friday, and the 
Week after that,  price reverses down and begins trading below 
the December 50% level…

Then the SPI will come off and follow the December lows and most 
likely continue down into the January lows.

*As price goes looking for the Yearly 50% level for 2010*

December 50% level is the trend guide in the short-term.


----------



## Frank D

*DOW Weekly and 5-day pattern*

The price action this week in US markets is what I would normally see 
within a weekly timeframe & 5-day range, and where price is in 
relation to the overall trend of the market. (Monthly Dynamics).

With the 5-day lows matching the Weekly 50% levels (support)

Because there was a change of the 3-day cycle on Thursday (break), this 
can often lead into a 2-day reversal back to retest the original break.


----------



## Frank D

*S&P Weekly and 5-day pattern*

After last week’s reversal into the Weekly 50% level on Friday the bias 
was to continue higher in December with a target @ 1126

This was based on the 4th Quarter target from October, that now has
 a matching monthly target in December at the same level.

Today’s trading had a bias to move upwards and back into the Weekly highs.

These highs @ 1112 will either resist price and push the market back 
down into a consolidation pattern until the end of the week....

Or continue with a ‘3-day UP move’ and complete the target @ 1126 this week.


----------



## Frank D

*SPI Weekly and 5-day pattern*

November 50% level support and a higher open above the December 
50% levels and a push upwards into the 5-day highs on Wednesday.

Today is the first day in a number of weeks that the SPI is above the 
3-day cycle highs (4761), with a view that price can continue towards 
the December highs later this month.

Whenever a change in the 3-day cycle occurs, price is either going
 to continue with the trend higher, (December highs) or move into a 
2-day reversal pattern.

A 2-day reversal pattern is often to retest support levels in the 
current trend, which at this stage are the December 50% levels.

It’s obvious that the SPI is going to be influenced by the direction the 
S&P 500 takes (read above)

*S&P direction:- 2-day reversal or continuation towards 1126*


----------



## Frank D

*DOW Weekly and 5-day pattern*

2nd day reversal after the change in the 3-day cycle, with a retest of 
higher timeframe support levels


----------



## Frank D

*SPI Weekly and 5-day pattern*

Change of the 3-day cycle on Wednesday, and a 2-day reversal
 pattern would be back down into the higher timeframe 50% levels to
 retest support.

Depending on the price action in US markets on Friday, I still have the
 view that markets will have one last push upwards next week and 
then probably top out for 2009.

Of course things change next week if price opens below the December 
50% levels, but I don’t have a high probability ‘short’ set-up in the
 larger cycles to pre-empt a major reversal Patten at this stage during this 
3-month cycle.

Only a short-term 2- day reversal during this Weekly cycle.


----------



## Frank D

*SPI Monthly and Weekly*

*Posted on 27th November….*

_This is a bear pattern to keep an eye on…

If next week moves upwards and closes on it’s highs on Friday, and the 
Week after that price reverses down and begins trading below the 
December 50% levels, then the SPI is likely to continue down, as price 
goes looking for the Yearly 50% level in 2010"_


This is the week that I was talking about, except the SPI didn’t close on
 it’s highs on Friday ( 5-day highs resistance), but the US markets did with the 5-day highs
 on Friday, and expected 2-day reversal.

*As I mentioned in the Weekly Report….*

_"Depending on the price action in US markets early 
next week, there could be early weakness in the first two days, but if
 price remains above support I’m expecting the market to continue higher
 into a higher Friday close"

"Even though the UP trend during this month is expected to rise higher, 
(2-month wave pattern) I’m also expecting a larger trend reversal into 
2010 (read previous reports)"_

At this stage it’s too early to tell whether this week is the week that
 does reverse down, because I didn’t get the 5-day high on Friday in the SPI.

That pattern is a larger cycle and trend reversal pattern, as mentioned on the 27th November.

The SPI is at major support levels in this up trend today,and my only 
concern is the price action in the US markets. If price does move down 
2-days in the S&P 500 the SPI will be below key levels in the 4th Quarter.


----------



## Frank D

*SPI Monthly and Weekly*

After my post on the 27th November.... of this week being a
 potential reversal of trend pattern, along with my view of  US
 markets beginning the week with 2-down days, I now favour our 
market slowly unwinding and moving lower in the first quarter of 2010
 (larger timeframe cycles and change of trend)

There hasn't been a breakout of support in US markets, and the only way 
I would get short-term bullish again is if US markets have a Daily 
'HOOK' pattern on Wednesday

That trend since March lows has been to BUY the dips using 
monthly patterns, but based on current price action in the Aussie 
market (not US markets), is to step aside until the first quarter in 
2010.


----------



## Frank D

*SPI Monthly and Weekly*

The important pattern in the reversal of trend in the Australian market 
was last weeks move below the December 50% levels, the weekly 
close below those levels on Friday and the start of this week moving 
lower:- potential ‘thrust’ pattern down.

At this stage the expectation remains a December low pattern and then
 a push downward in the first Quarter.

However, the same ‘bearish’ patterns aren’t appearing in US markets at 
the moment, after last week’s 2-day reversal and HOOK pattern on 
Thursday.


----------



## Frank D

*SPI Monthly and 5-day pattern*


Market trading below the December 50% levels along with my view that 
the market is heading down, but at this stage price action continues 
to consolidate within the 5-day ranges and movements of 42 points.

As pointed out, there’s no bearish patterns in US markets at this stage 
to help validate the move down in the Aussie market.

The next stage and continuation of the trend, or the reversal of the 
trend will need to see a 5-day range breakout.

My channel low support is beginning to creep upwards....(blue)


----------



## Frank D

*SPI Monthly and 5-day pattern*

December 50% level resistance, and today was the first day that the 
SPI would be opening below the brown filter @ 4668 since the 4th December @ 4751

"today will be the first day since the 4th December that
 price will be opening below the brown filter, which should help push 
the market down R42 target @ 4615"


A downward trend would have completed the move down into 4615 but 
then remained below 4641 and then continued down into Thursday’s lows.

Instead it reversed the range and moved back into the highs @ 4697, 
and we once again have more 5-day pattern rotations, which i'm not complaining about. (no long trading today)

*However, the SPI just won’t go down.*

*S&P 5-day pattern * in now contracting, which will eventually lead to 
a breakout of the 5-day range, and I’m betting that’s going to be tonight, 
and finally get the SPI out of this tight range.

And even though US markets are currently supported, it doesn’t mean 
the move will be UP on Thursday.


----------



## Frank D

*S&P Weekly and 5-day pattern*

Since last week’s HOOK pattern back above the Weekly 50% level I 
expected a move towards the Monthly highs within the first 3 days in the S&P.

*I didn’t have a bearish set-up on the S&P in the short-term as price 
wasn’t trading near resistance levels and price was above 50% levels, therefore the bias was to continue higher.*

However, that bearish pattern appeared at midnight US time 
with Wednesday's close and Thursday's open pre-empting the change of
 the trend and break of short-term support levels and the 5-day range.

I've seen these patterns before:- 2-days consolidation around the 
support levels and Wednesday moves higher but then drifts down 
and Thursday opens below the 5-day 50% level.

Normally the market will remain below the 5-day 50% level over the first 
4 hours, (after midnight NY) and then begin to move lower when the
 day session begins


Whilst price is below 1098, the bias is to continue down towards 
the December 50% levels.  I just would have preferred a larger trending 
day on Thursday towards 1083.


----------



## Frank D

*SPI Monthly and 5-day pattern*


As per Weekly report:-  _"Friday's price action often suggests that next week will begin with a 2-day UP move:- random length.

if Tuesday is above 4690, then there is a bias to move into a higher Weekly close" _


Today was part of the 2nd day up move, but price is still trading around
 the December 50% levels @ 4690 

Tuesday hasn’t closed above 4690 and hasn’t closed above the high on Tuesday to help verify a short-term breakout.

However, US markets have still 1 day to run on based my view of this 
week starting with a 2-day up move.


----------



## Frank D

*SPI Monthly and 5-day pattern*

As per Weekly report:- A 2-day UP move to begin the week, and if 
above 4690 there is an expectation that the Weekly timeframe 
should continue  towards a higher weekly close.

Confirmed with the 5-day high breakout.

S&P getting close to my overall 4th Quarter target @ 1126.


----------



## Frank D

*SPI Weekly and 5-day pattern*

As pointed out in the Weekly report:- above 4690 after the first 2-days 
 and potential higher weekly close by the end of the week.


----------



## Frank D

*S&P 500*

S&P 500 has reached the 4th Quarter target @ 1126.

With only a few days to go until 2010, price is most likely to continue 
higher into 2010, but it will be hitting a number of resistance levels, and I 
will be looking for potential reversal patterns back into higher timeframe 
50% levels.

*Important patterns in 2009 were the lows in the 
first quarter, the reversal pattern into the 2nd quarter 50% level. The
 3rd Quarter 'Thrust' pattern away from the 50% level. The October highs
 in the 3rd quarter and reversal down into the November 50% 
levels....*

*And lastly the 2-month wave pattern upwards from the November 50%
 level and into 1126 in December.*


2010 should be an interesting year....


----------



## Frank D

*S&P 500*

As per weekly report, open above the Weekly 50% level and expectation price will move back towards the Weekly highs.

Shift in December resistance @ 1126, with a target the January highs 
1142

At this stage there are some upper resistance levels, but I don't have 
any 'sell' patterns that suggest lasting reversals.


----------



## Frank D

*S&P 500*

S&P continues to trend from December 1126 and into January 1142

Friday’s highs match January’s highs, and if price hits those highs and
 closes below 1142, then I would treat next week as a higher Weekly 
open and resistance.

That would be my first ‘potential reversal pattern’ that could lead to 
some selling next week.

Therefore I’m interested in how Friday reacts to 1142 and how the 
Weekly timeframe closes:-  above 1142 or below 1142.

*Always verify higher timeframe patterns with lesser timeframes to 
validate the trend or reversal of trend.*


----------



## lukeaye

Frank D said:


> *S&P 500*
> 
> S&P continues to trend from December 1126 and into January 1142
> 
> Friday’s highs match January’s highs, and if price hits those highs and
> closes below 1142, then I would treat next week as a higher Weekly
> open and resistance.
> 
> That would be my first ‘potential reversal pattern’ that could lead to
> some selling next week.
> 
> Therefore I’m interested in how Friday reacts to 1142 and how the
> Weekly timeframe closes:-  above 1142 or below 1142.
> 
> *Always verify higher timeframe patterns with lesser timeframes to
> validate the trend or reversal of trend.*




Hi frank, 

just following your commentry, we have a close of 1145 on friday. Therefore based on your methodology, we now have an expectation to move higher in this month and into next month? So the time based resistance level now moves to 1154?


----------



## CascadeX

Hi,
I haven't read all the stuff in between, but what is the max system drawdown?
And what starting capital base did you begin with?
What is the annual risk-adjusted return?

What is the sharp ratio on the aMt model/methodology.

thanks.


----------



## Frank D

lukeaye said:


> Hi frank,
> 
> just following your commentry, we have a close of 1145 on friday. Therefore based on your methodology, we now have an expectation to move higher in this month and into next month?




Futures hasn’t close above 1142.

Read US report …

http://usindexweekly.blogspot.com/




CascadeX said:


> Hi,
> I haven't read all the stuff in between, but what is the max system drawdown?
> And what starting capital base did you begin with?
> What is the annual risk-adjusted return?
> 
> What is the sharp ratio on the aMt model/methodology.





If you read some of the stuff in between you’ll realise it’s not 
a system…

It’s a Model & Methodology based pattern recognition techniques using
 Time, Price, support & resistance.

That should answer the rest of your questions.

cheers
Frank


----------



## CascadeX

Why did you post all that backtesting information in the beginning? 
If it's not a system that can be tested, then all that backtesting info was pointless really.


----------



## Frank D

CascadeX said:


> Why did you post all that backtesting information in the beginning?
> If it's not a system that can be tested, then all that backtesting info was pointless really.




You can develop systems that are completely independent of a model
 and methodology. So it wasn’t pointless.

Systems are only as good the coding used and reliant on market 
conditions. A system never factors in all the nuisances of the market on 
the Monthly, Weekly and Daily basis.

Some that do use hard-coded systems can still optimize and improve 
the performance of that system using a methodology or chart reading.

Some just rely on systems and don’t give a toss about methodologies 
or applying chart reading skills. I gather this is where you fit in.


Personally I prefer to be a discretionary systematic trader relying on my chart
 reading skills to get me by, than relying on hard-coded systems.


----------



## Frank D

*SPI Monthly and Weekly*

As per my end of year post around 4956-68 is a major resistance level in 
the Aussie market in 2010, and I have a view of a larger trend reversal 
other than the usual medium term monthly reversals we normally see 
each Quarter.

Resistance was tested overnight in Sycom

As per my Weekly post, my expectation was to begin this week with a
 short-term reversal pattern (2-day) with the first confirming pattern a 
move below the 5-day 50% level.

This is occurring on the 2nd day @ 4919

2nd confirming tool on a potential reversal pattern will be a close below
 the cycle lows @ 4880.

Around these upper levels in the market I just can’t be bullish, unless 
the market begins to consolidate above 4956 for a number of 
weeks. Therefore the view during this Quarter is to make it’s was 
back towards the 50% levels in January

The reversal pattern in the S&P 500 isn’t as robust as a normal 
reversal patterns go, because the confirming pattern on Monday 
found support on the 5-day 50% level when it should have closed 
below:- break and continue on Tuesday

Anyway, the initial view was a 2-day reversal, and 2-days doesn’t make 
a major reversal but it can lead to a potential continuation of my view
 over the next 5-days.


----------



## Frank D

*S&P 500*

That completes the short-term 2-day reversal pattern to begin the week....

Even though I'm bearish around these upper levels looking for a larger
 trend reversal, it wouldn't surprise me to see the next 3-days remain 
within the 5-day range. (5-day pattern day trading)

And then align the next set-up next week.


----------



## Frank D

*S&P 500*

_"I'm expecting a short-term reversal pattern from 
these levels next week, but by Wednesday if price is still trading above 
1133, the market looks well supported "_....*Weekly Report*

Yesterday’s 2-day reversal pattern down into Tuesday’s lows and above
 the previous week’s highs has the market well supported and remaining in 
a tight 5-day pattern range.

I’d be extremely interested in how the market trades over the next 
3-days.

*If Monday is trading anywhere near the 5-day lows next week, I wouldn’t 
go near any longs for the rest of the following week.*


----------



## Frank D

*DOW Futures*

Precise high in the DOW around the January highs and Friday follows a 
5-day pattern reversal into the daily lows, and as the purple lines show in 
the chart I’m expecting the trend to continue down next week.

2nd Validation of the trend moving lower will be price trading below 
the Weekly 50% levels.

The price action on Friday if occurring anywhere else within the
 Secondary trends can often set-up further gains at the start of 
next week:- 5-day support and above the Weekly 50% levels and the continuation of the trend (UP)

If the next session in the market closes higher, my view of the market 
going down could be wrong, but little things can grow into big things and 
the current price action that is occurring in January is acting in a manner
 that often leads into big things.

And so far the price action is acting in an expectant manner since the start 
of the month.

 If the next session closes on its lows but not necessarily below the 
Weekly 50% levels, then the day after might be the start of the
 market continuing down.


----------



## Frank D

*SPI futures*

As you know I’m currently bearish on the markets and yesterday’s 
price action should have remained below 4871. (Weekly 50%)

I also understand that Weekly 50% level support from the previous week 
will normally begin with a 1-2 day counter-trend move (yesterday) at 
the start of the new week.

What looked like a short-term long set-up for many, has now turned into 
a retest of the 3-day SELL cycle (@ 4907) and a break of key levels 
once again, which helps match my original view.

To validate any reversal pattern and continuation down price needs to 
break support (weekly lows), which normally only happens overnight in
 sycom.

*However, there are no leads in the S&P because of the public holiday
 to help confirm my view, as the S&P in Globex has followed a similar
 pattern of rising up from Support.*


----------



## Frank D

*SPI Futures*

SPI is trading around the Weekly lows & near the January 50% level.

These levels are robust support zones, and can often be the bottom 
of a ‘downward trend’ and then the market continues higher thereafter.

 If this exact same pattern was happening in December then it will
 normally support the market and continue upwards and follow the trend
 into next months highs.

As you are aware I’m expecting more downside the closer we come to 
the end of the month, and I’m not expecting these levels to hold because 
of my overall view of 2010 (below 4956)  

However, I need US markets to follow and break support next week,
 because these levels in the SPI don’t often fail during the day session, 
even though there’s a breakout of the daily lows on Thursday @ 4821.


----------



## Frank D

*SPI Futures*


Break of support in sycom as US markets tumble on the Obama announcement Re-banks and hedge funds.

It was eventually going to happen regardless of the news or not.

At this stage my view is in the Monthly chart on the left, with an
 overall pullback towards 4300, but that might take a number of months
 to eventually happen.

I could be wrong on the pullback,  and support holds in January @ 4616, and 
the market pushes upwards from the February 50% level back towards 
the highs again.

However, I can gauge that when the next month begins, and I stick with
 my forecast from the start of the year @ 4300.


----------



## patchau

Hi Frank,

Would it be possible to post some charts of the S&P ASX/200 index with EOD as not all forum members have or trade future data?

david


----------



## Frank D

*DOW S&P Futures*

US markets complete the reversal pattern from January highs into the 50% levels.

I would expected some volatility around these levels for the next 5-days,
 but it doesn't mean that the trend is going to find support and the begin
 the next trend upwards.

That's about 5-days away.

*SPI down into support levels @ 4616*


----------



## CanOz

Uncanny Frank, nice work.

CanOz


----------



## Frank D

*SPI Monthly and Weekly*

As per Weekly report:- "_expectation that market will find support but not necessarily move higher, instead remaining in a tight 5-day range around support levels"_

There is a break and extend pattern in the Weekly timeframe, with the extension down into this Week's lows  @ 4602.

Because of my view that the market is range bound this week, I now 
have the expectation that the SPI will try and swing back towards 
the Weekly 50% levels by Friday, which matches the February 50%
 levels next week.

If the market is going to follow my larger trend reversal down, then 
February 50% level should push the SPI towards the February lows.

To verify an up move, price will have to have a higher daily open above
 today's highs:- *Short-term swing in a larger trend reversal pattern.... otherwise it's heading down into the January lows, as part of the larger trend reversal towards 4300*

At this stage I still favour a double monthly pattern down into the Feb
 lows, because the current price action is acting like it should continue
 down, but I prefer from resistance levels in February.

The further price drops in January, the further it goes down in February towards 4300


----------



## Frank D

*SPI Futures*

Today's open above 4602 and expectation that the SPI is moving into a 
2-day counter-trend move back towards the Weekly 50% levels.

I expected more upside today towards 4668 as a minimum move.

1-day to go until the next month begins, and support levels for 
January disappear and shift lower.


However, there are still a couple of days to go until US markets move 
into February and they are still above their Monthly 50% levels.


----------



## Frank D

patchau said:


> Would it be possible to post some charts of the S&P ASX/200 index with EOD as not all forum members have or trade future data?




*XJO CASH Market*

Currently XJO is supported at the close of January….@ 4560

However, my view has always been a pullback towards 4300,  with 4318
 in the XJO

I feel that level in the first Quarter is a very robust support level….

However, it’s how price responds to the level in the 2nd Quarter around 
4600.

Don’t underestimate the primary cycles in the market and the lines of 
least resistance.

Bullish market should bounce off 4300 and then continue to push 
upwards from 4600 in the 2nd Quarter towards 5200

Bearish pattern, and currently Energy Index looks terrible, can make it’s 
way towards much lower prices.....

Or remain in a sideways pattern until the 3rd Quarter begins and 
support levels catch up with price/trend (Yellow lows)


----------



## patchau

Frank,
Thank you for posting the chart of the XJO CASH Market together with a detailed analysis.
I checked my levels calculated as explained in you book and they all match so must be on the right track.
The red line has me baffled 1st Quarter 2010 the level is 4559, how is this calculated?

david


----------



## Frank D

*SPI Futures*

Cash Market (XJO) remains supported above 4559...

Whilst the SPI goes through it's usual 2-3 day counter-trend moves 
within the trend hitting resistance yesterday.

Current price action suggests more weakness towards February 
lows (today 4547)....

However US markets are dynamically different, as they are currently above support levels for the moment.


----------



## Frank D

*SPI Futures*

Expected move on Thursday towards 4547-48 has completed during 
sycom.

Preferred pattern was a continuation down during the day session...

However, 4564 supported the market with late buying.

S&P 500 currently trading on 50% level support levels (1087-88)


----------



## Frank D

*S&P 500*

Short-term counter-trend move until Wednesday, and S&P follows my 
overall view of continuing down and following the Weekly range into
 lower lows.

S&P should continue down into Feb's lows next week.....


----------



## Frank D

*SPI Futures*

SPI trading near the February lows and normally Friday's price will see a 
2-day move back towards the Weekly 50% level.

That's going to depend on the price action in US markets, because I favour 
a dip into February's lows this week, however I would prefer US markets 
an UP on Monday and into resistance levels.


----------



## Frank D

*SPI Futures.*

For those who have read my book:- we have a text book patterns in 
the Aussie market

Double monthly lows in this Quarter: January then February.
Matching with the Quarterly 50% level @ 4463.
Breakout of the 3-day cycle @ 4517..
And upper target the Weekly 50% level.

However, the SPI doesn’t want to go higher because US markets don’t 
have the same pattern.

*DOW futures*

Instead price is butting its head around resistance levels 
(February 50% level), with the expectation that the trend will follow the same pattern 
and continue down into the lows

*Normally a 2-day reversal into resistance would continue down, but 
that hasn't happened after Tuesday's high.*

Therefore, I give US markets 1 more day to make a move, because
 if Thursday ends up another consolidating trading day, then a breakout 
of resistance is more likely to happen on Friday (break of resistance
 and close above)


----------



## Frank D

*SPI futures*

Friday high reversal pattern @ 4563 and down into the 3-day cycle break 
@ 4517.

So far this reversal has been a precise 42 point down move, which is
 a statistical range for day traders and a retest of the break @ 4517.

If the market is going to find support today it will be around this level, as
 a retest of the break @ 4517 can continue higher into the close,

As pointed out in yesterday’s report regarding the conflicting patterns in 
the Aussie market and US markets.

Aussie market is trying to rise, whilst US markets are still butting
 heads around resistance levels even though both the DOW and S&P
 have closed on those resistance levels and there’s some selling during 
globex hours

*The interesting pattern on the SPI today is the Friday 5-day high and ‘sell’ pattern.*

 Friday high reversal patterns can often lead into a 2-day reversal 
towards the 3-day cycle lows @ 4429. This will occur if US markets 
reverse down from a higher Friday open using resistance levels and 
continue down, *or 4517 fails to hold in afternoon trading :- 2nd R42 
range down into the close*

As pointed out yesterday, a breakout of resistance in US markets can 
often occur on Friday, if price moves down during globex hours into the 
daily 50% level and then takes out the highs in late trading on Friday.

It's not a forgone conclusion that Friday will break higher, therefore the Monthly and Weekly 50% levels are still seen as resistance.

At this stage there are a number of patterns occurring in each market,
 but the market dynamics & price action in the SPI compared to the S&P-500 
and DOW are completely different coming into the end of the week, and 
we currently have a choppy 5-day pattern.


----------



## Frank D

*DOW Futures*


"A breakout of resistance in US markets can often occur on Friday, if 
price moves down into the daily 50% level and then *takes out the highs
 in late trading on Friday."*

US markets trading around resistance levels and the expectation was that price would push down early on Friday.

Based on the price action in the 5-day pattern, my view was that any 
upside would come late on Friday from the 50% level.

Friday has closed higher, which is what I thought would happen.

However, what normally happens is that Friday will breakout and close
 above the resistance levels, which hasn't happened.


----------



## Frank D

*SPI futures*

Monday and Tuesday completes a 2-day 'stall' pattern after last 
Friday's price action.

Any further gains will be dictated by US markets and the SPI trading 
either side of 4553.


----------



## Frank D

*SPI Futures*

First time since last year that the SPI had opened above the 5-day highs 
and it wasn’t coming back, as it reversed back into the Weekly 50% level
 @ 4635.


----------



## Frank D

*S&P 500*

S&P completes the move into the Weekly highs @ 1105 and sells down 
into the close...

Either price continues down 1 more day towards next week's 50% level,
which is what I would like to see happen, as part of the rest of 
Tuesday's breakout & 50% level

or Friday continues with a with an UP day into a higher daily & Weekly 
close (not ideal)


----------



## Frank D

*S&P 500*

As per Weekly report, expectation that this week would begin with a 
2-day reversal, and the 2nd day reversal pattern has played out 
with Tuesday’s lows holding support.

Based on current price action I would have to favour a move towards
 the Weekly highs by Friday.

Price now needs to be trading above 1098 and cross-over the Daily 50% 
level on Wednesday to confirm my view.


----------



## Frank D

*S&P 500*

Expectation that the trend would continue higher on Wednesday after completing the 2-day reversal pattern into Tuesday’s lows.

1104.25 is a partial exit zone.

Either the trend continues higher on Thursday & Friday as the
trend moves towards 1121 by Friday, and then higher highs into 
March.

Or there is still the possibility that US markets decide to move into
 a sideways consolidating pattern until March begins, and remain 'range 
trading' within the 5-day range (choppy)

Regardless of how bad the fundamentals look for the US economy,
there currently aren't any *'probable bear-patterns' * or any 
appearing on the horizon in US markets other than short-term 1-2 day reversal patterns.


----------



## Frank D

*SPI Futures*

SPI currently trading below the February 50% levels @ 4664, and price has
 reversed down the 5-day lows on Thursday.

Price is still above the Weekly 50% level @ 4565, and currently the market looks like 
consolidating into MARCH (2 days time)

I would normally look at this sell-off and simply factor in a short-term 
reversal pattern into lesser timeframe support levels, and for the trend
 to continue higher thereafter.

*This would normally align with the price patterns in the S&P 500,
 as the S&P continues up from Tuesdays lows and moves higher on Thursday & Friday towards
 the Weekly highs @ 1121*

However, in UP trends the S&P doesn't usually sell off during Globex hours 
and be trading back below 1098.

The expectation of the up trend moving into the Weekly highs by Friday
 is now less likely to happen, and my high probability 3-day pattern has fizzed after reaching 
1104.25 and back below 1098.

Hoping into Shorts on Thursday isn't optimsed the larger timeframe
 patterns.

Bernanke is giving another speech tonight at 1am our time, whether 
that makes any difference is to be seen.


----------



## Frank D

*S&P 500*

As mentioned yesterday...

There are two possible patterns that can occur for the rest of February.

1. Follow my view of heading higher into the Weekly highs by Friday

2. Choppy price action for a number of days (consolidation until March)

My preferred pattern was to see Tuesday’s low support price and 
then continue higher from Wednesday, Thursday & Friday into the 
Weekly highs @ 1121.

However, selling during Globex hours before the cash market opened set-up 
a push downward in the lows.

Thursday ended up moving down into the Daily lows, which matched
 the lower Weekly 50% level @ 1086 and we end up with a 
consolidating pattern within the 5-day range until March begins.


----------



## Frank D

*SPI Futures*

_"Based on the current price action and the reversal
 off Friday's lows, this could lead to a 2 day up move early next Week
 on Monday and Tuesday.

However, it might struggle to rise higher than 4612 on Friday, but it 
won’t take much for Monday to breakout"_*...Friday Report*

Today's up day was set-up with a Monday high breakout and the completion of the statisitical range of 42 points.

Expectation that the price action in the SPI to continue into 
higher highs by Tuesday.

At this stage US markets remain above key levels with only short-term counter-trend moves.


----------



## Frank D

*SPI futures*

SPI continued into this week's highs @ 4761 and stalled.

either the market continues lower (whilst below 4744), and follows a 2-day reversal pattern 
back towards the March 50% level:- 

Thursday pullback @ 4687-96...

Or buyers come in a prop it up above 4744 and Thursday continues to consolidate with an
 upward bias:- trading above the monthly 50% level


----------



## tech/a

Frank D said:


> *SPI futures*
> 
> SPI continued into this week's highs @ 4761 and stalled.
> 
> either the market continues lower (whilst below 4744), and follows a 2-day reversal pattern
> back towards the March 50% level:-
> 
> Thursday pullback @ 4687-96...
> 
> Or buyers come in a prop it up above 4744 and Thursday continues to consolidate with an
> upward bias:- trading above the monthly 50% level




Frank

So If your trading the SPI based upon the last 2 days reports 1/3 and today.
Youd have been long and currently there is an each way possibility so you would either be taking profit on some and holding some or waiting for an outcome to the bullish side with a trailing stop below to 4687 ish.

Is that the way this week would have been traded to now?


----------



## Frank D

To begin with, it's imperative to optimise the SPI with price action in the S&P. And Ideally trading both.

Simply because a pattern in the S&P will have a large bearing on how you 
are going to trade manage the SPI if holding longs or wanting to enter 
a trade. This has nothing to do with day trading, as this is separate 
thing altogether.

If I’m optimising the price action from last Friday’s lows and the 
expectation of a 2-day UP move at the start of the week, your exit
 would have been the 5-day highs by Tuesday

If the S&P had moved higher and has closed above it's own 5-day highs, 
then you hold positions in the SPI because of the expectation that the 
S&P will have a break and extend pattern in the daily range and
 continue higher the next day, which means the SPI will open higher the 
next day.

If the S&P has reached the Weekly highs then partial exit the SPI.

There is an observed phenomena that derivative markets are
 non-linear, which means 63% of the time markets remain within a 
dynamic range.

They get too high or low in a dynamic 5-day range they can rotate 
back. And the same applies with the Weekly levels, they can move into the 
extremes and then rotate back 2-days.

Whilst the S&P is above higher timeframe 50% level you want to be focusing on longs (hold longer) and use support levels.

This could mean two things:- If you are out of the market then you 
would want to wait for patterns to align in the S&P even if you are trading the SPI.

If you are already long in the market (after partial exit) then you can optimise
the entire exit based on the monthly high target in the S&P, or if the S&P
 closes below the Weekly 50% levels (cover longs)

At the end of the day it's about Identifying the trend, where the trend 
is going, and then recognising reliable patterns to find robust entry levels.

The easy part is identifying trends and where they are likely to go.

The hard part is capturing those trends with reliable patterns:- high probability set-ups. 

And High probability set-ups don't happen that often, if lucky once or
 twice per week. And  they are far more vaild if the set-up in the SPI 
is matched with the same price action in the S&P.


----------



## Frank D

*SPI Futures *

Early resistance and sell off from today’s highs @ 4761, but afternoon
 buying after 3pm propped the market once above 4744.

Is the SPI going to go higher or it is going to reverse back down into 
the March 50% level? 

There is nothing to suggest either way other than it has hit resistance
 during this week, and this level will shift higher next week.

If that down move is going to occur it will happen based on US
 markets moving lower on Thursday and not higher.

If I look at the S&P 500 I would think it was going higher. It’s above all 
the 50% levels and moving dynamically within the Weekly range towards
 the March highs @ 1152.

However, *whenever the S&P consolidates above the Daily 50% level
 for the first 3 days and can’t break resistance (Weekly highs) alarm 
bells begin to ring.*

Often a short-term bear pattern occurs with a break of the 5-day 50% 
level on Thursday @ 1111

Because the market is regressive and range bound within a 5-day range, 
this can often push the S&P back into the 5-day lows on Thursday, and
 I have seen on occasions these lows fail to hold support on Thursday
 and break lower

Therefore if long the SPI you don’t want to see the S&P 500 trading 
below 1111 in the short term…

If short the S&P (weekly highs @ 1120), then the interest is in the 5-day 
50% level on Thursday and price trading below it.

If long the S&P then you want it to remain above 1111 with a bias 
towards 1131+

If day trading the S&P then the key level is 1111 and focus on 8 & 
14-point range movements:- 14 points from the current highs is 1111.

Just as the SPI is 21 & 42 points.

*Note*:- DOW futures has just broken below the 5-day 50% level, so the bell is ringing


----------



## ThingyMajiggy

Nice wrap Frank  Keep it up


----------



## tech/a

Frank

Thanks for the reply.
I dont have the time to answer as I would like to---having a break so will visit again on a seperate thread so not to clog this one up sometime next week.


----------



## Frank D

*S&P 500*

 A *position trader trading Longs* on the S&P with the expectation 
price is rising towards the monthly highs, nothing has changed and dynamically the market points to higher prices next week.

If *short from the Weekly highs*, then the 2-day filter (yellow) is what you want to see broken and confirmed with a break of the 5-day 50% level.

At the week comes into the close, shorting this week's high has
 less probability of providing a 2-day reversal, because the line of
 resistance disappears and moves higher

If *long using the filter (intra-day trader*), the market move upward was 8 points, which is a day-traders first target range intra-day.


----------



## Frank D

*S&P monthly  and Weekly*

S&P completes the move into the monthly highs @ 1138 and will continue higher next week.

March highs will complete a double monthly pattern during this
 Quarterly cycle, which I would normally view as a high in the first 
quarter and then look for any higher moves in the 2nd Quarter using support levels (50% levels).

With the view that price is continuing towards the 2nd Quarter highs (yellow).


----------



## Frank D

*S&P 500*

S&P continues the slow climb upwards and should be reaching a number
 of resistance levels in the higher timeframes from Wednesday onwards.

Any resistance is viewed as only short-term weakness, as my view is to 
make higher highs in April


----------



## Frank D

*SPI Futures:- Weekly and daily range*

SPI continues to consolidate in a tight 5-day range with an upward bias towards March @ 4917

The 3-day cycle is the trend guide @ 4793, and next week's highs begin
 to match the March highs.

If there is a change in cycle:- break, then the view is a rotation towards
 next Week's 50% level.

*In other news....*

The* S&P 500 *hit the Weekly highs on Wednesday and has 
reversed down 8 points but not enough follow through to think it’s going
 to continue lower towards the Weekly 50% level.

If Wednesday's high reversed down and is already trading below the 
Thursday 50% level @ 1137, I would normally treat Thursday as a down day
 (lower Daily close)

But it hasn't closed below 1137.

Volatility is painful at the moment.


----------



## Frank D

_"Resistance on the S&P 1152 & 1159

I'd be surprised to see the S&P higher than 1159 this month" *.*_*..Thursday's report*

*S&P 500 Monthly and Weekly*

S&P has completed the move into the March highs and I would begin to
 look for a short-term pullback towards the higher timeframe 50% levels
 from next week.

I'm favouring higher prices in the 2nd Quarter, but because of Friday's
 spike into 1159 and the Weekly close below 1152, I feel the 'top' in
 March has been reached and a rotation pattern will begin
 to unfold.


----------



## ThingyMajiggy

I am in the process of getting Frank's Channels into NinjaTrader, its still a work in progress but I'm getting there, just in case anyone out there is interested, PM me and I can pass them onto you once they're done if you like.

That is if it's okay with Frank first, if he's cool with it then I'll pass them on to anyone who's interested. 

This is on the DAX tonight, like I said, they're a work in progress but getting there. 

Hope Frank doesn't mind. I won't pass them onto anyone if he doesn't want me to, so will wait to see what he says. 

Keep it up Frank 


Sam.


----------



## Frank D

*DOW futures*

Last Week we had the same short-term sell pattern on Friday, but this
 time it's matched with the *March Highs @ 10725* in the DOW.

The DOW has been lagging the S&P in market dynamics, and the same 
thing occurred around January's highs. S&P hangs around the highs and 
waits until the DOW catches up and then they proceed to rotate back down into monthly 50% levels.

Once again i'll start next week with the expectation of a short-term
 reversal pattern and then see how it reacts to the Weekly 50% level.

However, I’m not expecting the same swift reversal as in 
January/February, but I would like to see some short–term pullback
 into higher timeframe 50% levels before the continuation of the UP trends
 in the 2nd Quarter.


----------



## Frank D

*S&P Monthly and Daily range*

Same pattern as last Monday….

Gap down from Friday’s highs and swing back into the monthly highs @ 1162

Upside targets in the 2nd quarter are 1200-1255…

I just prefer not to see the market hug the highs each month until those upper targets are reached.


----------



## Frank D

*S&P 500 Futures*

US markets along with the SPI continue to consolidate around the 
March highs without any length of pullbacks.

Finally S&P provided enough range rotation of the downside on Thursday,
 as it remains within the daily range.

I would still like to see more downside before there's more upside in the 
2nd Quarter


----------



## Frank D

*SPI monthly and Daily range*

*March highs complete and reversal down from sycom 5-day highs on
 Friday @ 4950

Whenever a Friday high reversal pattern occurs I immediately factor in a 
2-day reversal pattern:- First target 4870....*

Friday selling on the SPI with a break of the dailyay channel @ 4896

Short-term target is the R42 completion @ 4870 (from Yesterday)

Potential move towards the daily lows by Friday/Monday

Quarter coming into an end, with upside targets in the 2nd Quarter @ 
5100+

Ideal pattern to capture next trend upwards would be to use the April
 50% levels as support/ trend guide.

However, the SPI might not continue  down from March highs 
into the April 50% levels just yet. That's going to depend on US price action.

I'm not factoring in the same Reversal pattern like January's highs into February's lows.


----------



## Frank D

*S&P 500*


2nd Quarter target 1230 (secondary Trend)

Monthly ranges:- (Intermediate trend).

Weekly ranges:- (lesser Trends)  & any reversal down will be first verified with the break of the Weekly 50% level

Daily patterns  (5-day range):- patterns and set-ups within the multiple timeframes


----------



## Frank D

*SPI Weekly (24 hour charts) and Daily range*

The breakout of the March high @ 4757 has completed today with the April highs @ 4975:- break and extend pattern.

Tuesday's daily breakout range @ 4959 has supported the market today, 
and can push up towards Wednesday's highs tomorrow.

I do have a view of higher prices in the 2nd Quarter towards 5170, but 
I personally wouldn’t want to be buying into the market when it’s 
already around the highs at the start of a new cycle, and also the 
completion of the break & extend pattern from last month into this month.

It’s the start of a new cycle so I want to use support levels and I
 would need to see the SPI rotate back towards the monthly 50% levels
 (3-week lows).

It might take 4-6 weeks until price slowly unwinds towards support
 levels, but I’m patient when trading certain stocks.

*If the Market continues to trend up towards 5170 I miss out during 
this Quarter*.

The only way a rotation is going to continue down in the short-term 
(this week) is if the S&P follows the same price action from 1185 and 
begins to slowly unwind towards 1164, and not continue to push up 
towards the April highs (charts above)


----------



## Frank D

*SPI Futures*

Break & extend pattern complete for April and looking for a unwinding 
pattern over the next few weeks.

My view remains a reversal pattern towards the Weekly lows and then the monthly 50% level 
(MAY 50%) over the next 4-6 weeks.

S&P reversal down from 1185 helps the cause


----------



## Frank D

*SPI (Left) and S&P 500 (right)*


*SPI *resistance this week has shifted and should see higher prices
 next week and into the April highs with matching Weekly highs.

*S&P Weekly highs *@ 1185 stalled the market until Friday, and is
 now continuing with the March breakout @ 1162 and extension into 1201.

2nd Quarter highs remain 5170 &  1230 in both markets.

I still have the view that there is a potential move into the 50% levels 
over the next 4-6 weeks before those upper targets in the 2nd Quarter are reached.


----------



## Frank D

*SPI Weekly and 5-day pattern*

SPI Trading around the April highs (resistance)...

However it's the patterns in US markets that's going to decide on whether 
it follows my view of a reversal pattern down into 50% levels.

Both the October highs in 2009 & the January highs in 2010 aligned with 
the DOW’s Monthly highs, and both ‘topped’ out on the 5-day highs on 
Thursday.

The same pattern has occurred last night in the DOW.

To help validate the scenario, Friday in the US needs to have a lower
 daily close preferrably around the 5-day lows & not a higher daily close.


----------



## Frank D

*S&P 500*

Precise tops on Thursday often lead to a reversal pattern down into the
 daily lows the next day, as per Monthly highs resistance patterns


And in my opinion continue down as the month comes to end.

However, I would like to see a double top early next week.


----------



## Frank D

*S&P 500 *

Monday’s low and expectant 2-day counter-trend move has
 completed:- *'double top'*

At this point I’m bearish once again, however there is nothing to 
validate that position until there is a break of the Weekly 50% levels.

Wednesday’s 5-day 50% level is now something I’ll keep an eye.

Whilst price remains above the Weekly 50% level then 2nd quarter highs
 @ 1230 is the target in MAY.


----------



## Frank D

*S&P 500*

Expectation of a *'double top'* and reversal pattern is slowly taking place.

However, I was a little disappointed that Price hadn’t made its way
 towards the Daily lows on Wednesday, as this is the usual pattern 
that occurs in 'double top' and monthly reversal patterns….


----------



## Frank D

*SPI Monthly*

Aussie market continues to rotate down from April highs, whilst US 
markets continue to hover around their own April highs... which is annoying.

I said it would take 4-6 weeks to unwind towards the Monthly 50% levels, which is about right at the moment.


----------



## Frank D

*S&P 500*


Thursday's support off the Weekly 50% level & Support on Friday 
@ 1198.50 pushed the market into a higher daily close

And the expected *Double top formation has failed* to materialise.

With the Daily close above 1211, it’s most likely that the S&P will follow the Weekly range upwards next week…..

And continue towards 1230 and 2nd Quarter highs in MAY.


----------



## Frank D

*SPI futures and DOW futures*

Delayed reversal pattern in US markets in April, has seen the SPI move 
down and complete the rotation towards the April 50% level in the last 
week of the month.

As per my expectation.... if there is going to be a move towards the 2nd Quarter highs then the 
price action *from next week onwards (MAY 50% level) *is something to keep an eye on:- 
as part of a 2-month higher high pattern (June).

*Note:- *US markets aren’t near their own monthly 50% levels,
 therefore April 50% level is a target and *MAY 50% level is the trend 
guide*.


----------



## Frank D

*SPI Futures*

As per my view from a number of weeks ago, this rotation down into 
the monthly 50% levels is part of a medium term pullback and with the
 view that the market is moving towards the 2nd Quarter highs in June.

*Short-term view:- *3-day counter trend move upwards off these lows

Word of Warning….

I like to verify my view with the same patterns in US markets, and that’s 
not the case as they aren’t near the same support levels.

*This could result in two patterns….*

3-week consolidation around these levels in MAY and then look for late
 month or early June set-ups in the Australian Market…

Whilst US markets continue to slowly unwind over the next 3-weeks and
 align with the MAY 50% levels providing potential early June set-up.

*Obviously below these MAY 50% levels any uptrend is open to risk.*


----------



## Frank D

*SPI Monthly and S&P 500 Monthly*

SPI swing trading within the monthly levels, whilst US markets complete 
the move into the Quarterly 50% levels with last week's down move into support.

The Aussie market completed that move in the first Quarter, forming a 
double monthly low pattern:- expectant pattern (february)

During the course of the year markets will revisit these 3-month lows,
 and now that's over in US markets it is whether there is going to be a 
double monthly low pattern in June that's the focus, or if MAY closes back above the monthly 50% levels.

If the S&P 500 follows a double monthly low pattern, this should drag the
 SPI back towards 4295, and then probably remain range bound between 
4295 and recent highs for the rest of 2010.

Primary Trend consolidation until a shift in the Primary levels for 2011.


----------



## Frank D

*DOW and S&P Futures*

*As per my Weekly report on the 8th MAY….*

_"I have seen these exact patterns continue higher and move into a 
3-day UP move to retest the previous Weekly lows. (breakout)

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

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

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

However, normally *Thursday has a much greater range on the 
downside *(trading below the monthly 50% levels once again)

At this stage, price is still trading above those monthly 50% levels, therefore a lower Friday close isn’t set in stone.

Any further weakness on Friday and likely reversal pattern is towards
the Weekly 50% levels once again.


----------



## Frank D

*S&P 500 Weekly *

Probability pattern was based on a 3-day counter-trend move and then a
 4th day sell pattern on Thursday back down into the Weekly 50% level 
and Friday's lows.

Friday's continuation (down-day) was verified with the break of the daily
 50% level.


----------



## Frank D

*SPI futures (Day Session) *

Weekly low breakout in MAY and below the MAY 50% level @ 4761

Extension down into MAY lows @ 4457  and then a 3-day counter-trend move back into the Weekly 50% level last week.

Test and reject pattern last week (Weekly 50%), after last Thursday's high & reversal patterns in US markets (lower friday close)

Break and extend pattern completes @ 4328. (Day session only)


----------



## Frank D

*S&P 500 futures*

Break and extend patterns in the S&P will complete on Friday.

Break occured two weeks ago @ 1173, and then the 3-day counter-trend move into last Thursday's highs.

And the extension down into Weekly lows by Friday.


----------



## Frank D

*S&P 500 Futures*

"_Thursday breakout and expectation that price is heading down into 
the daily lows on Friday.

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

Text book patterns on this downtrend and into Friday's lows. That 
completes the break and extend pattern in the Weekly timeframe from
 2 weeks ago.

Precise bottom on Friday and swing back towards the Daily 50% level.

And as per my view:-  price will try and swing back towards the 
monthly 50% levels in June.


Current support levels are valid in MAY but will drop lower in June


----------



## Frank D

*SPI Futures:- Weekly and Daily range*


Breakout of the MAY lows in the SPI @ 4457.

This week has seen a retest of the Weekly 50% level and whilst below
 4356 the bias is to continue down.

The Aussie market support levels @ 4457 failed as the S&P moved down
 into last Friday’s lows, and whilst below the MAY lows price can often 
continue down in the following month (June), unless the S&P 500 drags the Aussie market upwards in the short-term.

*With the subsequent bounce off the Weekly lows in the S&P on Friday
 I thought that US markets would have remained above 1070-74 
until the start of June *before the next potential leg down.

Because the S&P is now trading below 1070-74  (MAY low breakout 
and below the Quarterly 50% level) there is the view that price is
 rotating back towards the Yearly 50% level @ 969.


----------



## Frank D

*S&P Weekly and Daily range*

Same pattern as Friday:- Weekly and Daily low support and higher daily 
close.

This time with a close above 5-day 50% level.


----------



## Frank D

*SPI Monthly and 5-day range*


We can see our market have major support around the Yearly 50% @ 4295

However, there’s a ton of resistance today on the SPI @ 4457 (MAY lows)

This could result in the market remaining choppy around today’s 
highs (Friday’s highs @ 4464) and could even see a late sell just to keep 
the market capped under this level. (4457)

However, I’m still *factoring the S&P 500 rising up in the short-term*, which is probably have the SPI aligning with the June 50% levels next week.

Then it becomes interesting…..


----------



## Frank D

*Weekly report written 15th August 2009....*

_"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 50% levels and into the highs, which align 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 during the 2nd half of 2010"_

9 months later and this pattern has played out precisely in the 
Australian market. The Yearly 50% level in 2010 is supporting the market
 and we can now moved into a multi-sideways consolidation pattern over 
the next 2-Quarters?

However, what happens 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*:- in my opinion it's too early to get comfortable 
with current support levels as there are a couple of lesser timeframes 
that still have potential bearish patterns.


----------



## Frank D

*S&P 500 Monthly and Weekly*

Major support in the S&P continues as the Weekly timeframe remains in 
MAY until the close of the week

This week has seen a dip down into 1067 and now a swing back towards 
the June 50% levels, and which should align with the Weekly timeframe (next week)

Those June 50% levels become the critical levels for next week.


----------



## Frank D

*SPI Monthly*

As pointed out, it's too early to get comfortable with current support 
levels, as the lesser timeframes continue to have bearish patterns in June.

The Australian Market continues to remain supported above the
 Yearly 50% level @ 4296, and may do so for the rest of 2010 into 2011
 ( large consolidating pattern over the next 2 Quarters)

However, it's the S&P that's my concern.

If the S&P follows the move towards 969 in the *3rd quarter*, it will put 
the Aussie market around 3401 (max move 3061 on futures) and that would bottom out the market.

As the other thread says..... (BUY with open arms)

I'm not saying it will go that low, but is a possibility simply based on the 
S&P patterns.


----------



## healthandwealth

this is a really interesting thread! is the S&P and spi ready to drop or will they go higher? they seem to be at the top line now. How can we calculate the figures for next week? thanks


----------



## Frank D

*S&P 500 (left) & SPI (Right) *

With the Quarterly 50% level support @ 1074 and trading above the 
weekly 50% level this week, the natural swing has been back to the 
weekly highs and June 50% levels  @ 1113

These upper levels are seen as resistance for this week only:- minor resistance for the next 3-days


Normally what happens is that the weekly highs are much higher.

The market moves up into the weekly highs reverses down into next Week’s 50%
level, which by now is above the monthly 50% level, and then the trend
continues up over the next 2-months.


However, these 3-weekly highs in the S&P match the month 50% levels, and
 a reversal down into next week's 50% level is still below the monthly
 50% level.

Therefore, I'm still unsure whether the trend continues higher or it 
splutters into the end of the month and the start of the 3rd Quarter

Currently the market is now trading between two Weekly levels @ 1102
 & 1113.

At this stage I have the view that the S&P is trying to swing back
 down towards next week's 50% level, *simply using ‘history’ to 
pre-empt the current move. *

But for that to happen the market needs to be trading below 1102.

~~~~~~~~~~~~~~~~~~

*SPI Trading around the June 50% levels after hitting the Weekly highs yesterday.*


----------



## Frank D

*S&P 500*

_*These upper levels are seen as resistance for this week only:- minor resistance for the next 3-days*_

S&P has closed around the Weekly highs without any minor reversal
 pattern within the 5-day range.

Based on the Weekly close, and as long as price remains above 1105.75 (next week)
 the bias is to continue up over the next 2-weeks and the start of the
 3rd Quarter.

There could be a minor reversal pattern next week towards the
 Weekly 50% level early next week, as previously described, but I wouldn't 
be sweating on it.


----------



## Frank D

*S&P 500*

_"Normally what happens is that the weekly highs are much higher, the
market moves up into the weekly highs reverses down into the Weekly 50%
level, which by now is above the monthly 50% level, and then the trend
continues up over the next 2-months.

A reversal down into next week's 50% level is still below the monthly 50% level"_

The S&P has completed that exact pattern into the Weekly 50% level 
@ 1089.75, which would normally lead to the market rising upwards into
 the end of month (2 weeks) and up into July.

However, the price action that is taking place is below 3rd month 50%
 level coming into the end of the Quarter, and also trading below the 
daily lows on Tuesday. (negative)

If the market is going higher it needs to be closing back above 1106.50
 by Friday

If this week fails to move back above the June 50% level, the 3rd 
Quarter can start with a negative move down towards the July lows.


----------



## Frank D

*SPI Weekly and Daily range*

Last Week's reversal pattern below the June 50% level and this
 normally leads to a continuation of the trend during the 2nd Quarter 
and extension down into the 3rd. (July's lows)

Early rise today of 42 points but the reversal back below 4380 sent the
 SPI into Tuesday's lows @ 4326 (random support)


----------



## Frank D

*S&P 500*

S&P continues down into June lows on the last day of the month
 and most likely push down into July's lows. (random 3rd Quarter support)

Larger trend pullback remains around 969 for 2010


----------



## Frank D

*SPI Weekly*

Break and Extend pattern from 4744 in MAY has completed in July @ 4170 (sycom).

This could see a swing back towards next week's 50% level, depending 
on price action in US markets on Friday.

I still have the view that the market is moving down towards the
 July 
lows, therefore next week's 50% level is the trend guide


----------



## Frank D

*SPI Weekly and Daily*

4170 continues to support the market, with today's UP move beginning
 from Tuesday's Daily lows and a swing back towards the 5-day 50% 
level @ 4270.

At this stage my expectation is only a short-term counter-trend move, with
a larger timeframe downward trend still in play.

Weekly 50% level 4332


----------



## Frank D

*SPI Weekly and Daily range*

SPI capped under the Weekly 50% level @ 4332, but most likely headed
 towards Thursday's highs @ 4350. (sycom)

I was expecting the Weekly 50% level to send the SPI back down into
 the July lows, but the S&P's rally and daily close above the Weekly 50% level can see more short-term gains.

S&P's rally didn't begin from any higher timeframe support levels during
 July, which is a bummer....

As I was looking for swing patterns back towards the monthly 50% levels in July but only after hitting July's lows first.


----------



## Frank D

*SPI Weekly and R42 range*

As per Weekly report, my view is that this Quarter will remain in a
 large sideways consolidating pattern with the possibilty that the market
 can still continue towards the monthly lows during this Quarter.

Trend guide this week are the Weekly 50% levels:- 4395-4407

Whilst below pullback is towards 4299

above and the trend continues towards the July 50% levels +


----------



## Frank D

*S&P 500*

S&P has continued into 1099 and stalled.

As per the Weekly report, my view is that 1099 is resistance on the S&P
 and that this Quarter will move in a sideways pattern between 1099 and
 the monthly lows.

Yesterday's high and 'down' day doesn't validate my view, other than it
 being a 1 day reversal. I need to see lesser timeframe levels break to
 help confirm my view


----------



## Frank D

*S&P 500*

1099 was the recent high on the S&P, and a reversal down into a
 lower Weekly close on Friday helps verify my view

Two possible patterns that may play out for the rest of the month....

1. This month continues to trend downwards and into the July lows with
 a target @ 969

or

The market consolidates between the Weekly levels until the end of
 July, with a bias towards 969 in during this Quarter:- 3rd Quarter
 consolidation.


----------



## Frank D

*SPI Futures*

SPI currently remaining within the Weekly levels, after testing the 50% level @ 4316
 and rising up on Tuesday from the daily filter @ 4326.

Any further gains this week:-  4403 and then 4464.

However, I still have the view of lower lows during the 3rd Quarter.


----------



## Frank D

*S&P 500*

S&P currently consolidating between the Weekly levels, which may 
continue until the end of July....


----------



## Frank D

*S&P 500*

S&P consolidating within the Weekly levels during July.

Trend guide remains 1099...

Whilst above the trend bias is towards 1117


----------



## Frank D

*S&P 500*

S&P has continued up from 1099 and into the Weekly highs:- minor resistance.

These resistance levels could last for 2-3 days and remain range
 bound between 1092 and 1117.

Whilst the market remains above 1099 the bias is to continue higher,
 and those weekly highs have less probability of resistance by Friday with
 the next move up towards 1135.

If the market struggles over the next 3-days and drifts down towards 
1092 by Friday, then August 50% level becomes the trend guide.

At this stage I don't have a long term view of the market, and I'm treating
 each weekly timeframe as short-term 2 & 3 days patterns....

 but *1099 still remains the critical trend guide for the 3rd Quarter.*


----------



## Frank D

*S&P 500*

A number of days ago  I suggested the market can consolidate for the next
 3-days between 1117 and 1092 until Friday.

Thursday’s consolidation pattern started with the resistance and high around 1112 and the continuation below 1100

3-days is a long time in the markets and sequence of events over the
 past 3-days makes it hard to see the market set-up for a Friday rally towards 1135, as suggested.

If the events over the past 3-days differed, for example Wednesday
 moved down  into 1092 and Thursday closed higher, then it is much
 easier finding a high probability set-up on the last day of the Week & Month

At this stage the August 50% level starting next week will the trend guide


----------



## Frank D

*S&P 500*

Based on current patterns and the price action on Friday, my view is
 for the S&P to continue towards next week's highs.

Friday's low normally sets up a continuation trend upwards over the next 
2-3 days

As long as price remains above key timeframe levels:- 1090


----------



## Frank D

*SPI Weekly*

Both the SPI and S&P continue to hug the highs without reversing down.

Jobs data out tonight and this will let us know whether the trend
 continues upwards during the 3rd Quarter….

My view after last Friday's price action is to continue higher, with the
 SPI moving towards 4672 and then towards the monthly highs in 
Sepetmber.

However, any negative news on the Jobs front (I'd be surprised), and
 it's more consolidating over the next 3-weeks back towards the Weekly
 lows.


----------



## Frank D

*SPI (left)  S&P 500 (right)*

 I would normally treat the market with an upwards bias for the first
 2-days towards the Weekly highs (1137) based on last Friday’s price action in the S&P 500

However, it has struggled to rise upwards, and the SPI has struggled to
 move beyond 4565 in August

Next 3-days looks choppy (UP & DOWN days) with a possible
 rotation towards the Weekly 50% levels.

Both markets continue to remain above key levels in August (50% levels)
 for the moment


----------



## Frank D

*SPI Weekly and daily range*

Market heading down into the Weekly 50% level @ 4443 & 4435

However, the pattern that confirms a bearish scenario is a breakout of the
 5-day lows @ 4476 and trading below the August 50% levels @ 4486.

I would look at the current price action with a view towards a lower Friday close, with a potential move towards the Weekly lows @ 4375- 4330 at this stage.


----------



## Frank D

*S&P 500*

Same pattern as the SPI after the first 2-days, and with Tuesday's 
close below 1112-1116 this set-up a minimum down into the daily lows
 @ 1103

Which then resulted in a breakout on Wednesday and a continuation down into lower Weekly levels.

I'd like to see a minor counter-trend move upwards (1 -day) but whether
 price moves above 1099-1102 again during August is another matter.


----------



## Frank D

*SPI Weekly*

SPI moves down into Weekly lows @ 4330, after consolidating
 below 4375 yesterday

Friday has seen the Weekly support @ 4330 verified with a shift in 
the 5-day filter @ 4344 and then a consolidation back above 4375...

And now the counter-trend continues upwards back towards
 the 50% levels


----------



## Frank D

*SPI Weekly and daily range*

Australian market continues to look well supported (above the Yearly 50%
 level @ 4295), as 3-week lows is often a robust swing low during the
 month, but it’s not a forgone conclusion that the trend will continue 
higher just yet, as price is still below key Monthly and Quarterly levels.

At the moment we have a 2-day swing pattern from a lower Weekly 
open into resistance levels and a continuation of 3rd quarter consolidation.

*It’s now it’s up to the S&P to decide if the trend continues higher or not*, as the S&P remains below key Weekly levels.


----------



## Frank D

*S&P 500*

As per Weekly report, 1098.50 is a critical level during the 3rd Quarter.

We have seen the past 2-days rise upwards and hit 1098.50 and stall.

If the trend during globex hours drifts and Thursday is below 1084.75,
 my view is a possible 'sell pattern' continuing towards a lower Friday
 close:- random length

Random support are the Weekly lows, however there is a larger trend 
that's driving the market, and those Weekly lows have less probability
of providing a robust swing point this week.


----------



## Frank D

*S&P 500*

After 2-days of trying to crack 1098.50 and failing, this set-up Thursday as
 a down day but it needed to be verified with price trading below 1084.75 resulting in a
 continuation down into Thursday's lows.

Friday provided an ideal rejection from 1076 into random support using
 the Weekly and Daily lows:- 8.5 reversal ($425USD)

I still have a view of more weakness during the 3rd quarter, however
 I'd begin to look for short-term counter trend moves next week with 
the trend guide being 1077.50.

Day traders focus on 8.5 to 14 point ranges (spiral points)


----------



## Frank D

*SPI Weekly and Daily range*

Continued 3rd quarter weakness with the August 50% levels pushing the
 SPI back down into the highest timeframe 50% level @ 4295.

*This level is seen as a robust support zone for 2010*, however it's
 the price action in the S&P 500 that’s driving the markets lower.

And any further weakness in the S&P 500 as it moves down towards
 the August levels @ 1016-22 will see the SPI lower


----------



## Frank D

*SPI Weekly and Daily range*

As pointed out, the Australian market continues to remain well supported above 4295 (Yearly 50% level)...

However, it's the price action in the S&P that's going to potentially drag 
the market lower during the 3rd quarter.

Last day of the month and September 50% levels come into play.


----------



## Frank D

*SPI Weekly and Daily range*

Shift in market dynamics from August into September has seen a
 5-day breakout, @ 4471 and looks to be heading into 4522-27
 in the short-term

If this pattern continues as per Weekly report, that upside target
 during September is 4672.

Market dynamics in US markets aren't the same at this stage, as the S&P opens below
 their September 50% levels today.


----------



## Frank D

*SPI Weekly and Daily range*

Break and Extend pattern from yesterday @ 4471 completed overnight
 into Thursday's highs @ 4577.

Today's open aligned with the Weekly highs, and today has moved 
into another consolidating pattern:- higher open fade.

Any further gains will depend on the price action in the S&P for the next 
2-days


----------



## Frank D

*SPI Daily range and spiral filter*

SPI trading around the weekly highs @ 4569 and the market is consolidating:- resistance.

There has been a shift in the daily pattern from 4510 to 4551, therefore  there is now a
 possible continuation of the trend using the 'expectation'
 of retesting Wednesday's breakout @ 4471  and the next line of 
least resistance @ 4440

However, based on the levels in the Weekly timeframe, around 4522 could
 end up supporting the SPI today.

Whilst below 4551 the trend bias is down:- random support 4522.


----------



## Frank D

*SPI Weekly and Daily range*


Higher daily open aligned with Monday’s highs and a swift down move of 
42 points towards support 4542

The rest of today has moved into a consolidating pattern, which is often
 the norm after the completion of the 42-point range, and as part of
 the trend bias upwards

At this stage the Trend bias is to continue towards the Monthly and
 Weekly highs.


----------



## Frank D

*SPI Weekly and Daily range*

This week has seen a minor reversal pattern into trailing support levels
 in both the Weekly and daily ranges:- 4526-4530

Trend bias is to continue towards the Monthly and Weekly highs:- 4628-54

*Today:- *Whilst price remains above 4565 in the daily range the 
short-term trend is up (21 to 42 points)…

21 points already completed and hitting the daily highs @ 4589

Daily highs @ 4589, may or may not act as resistance today.

Simply because the larger trends are trying to move upwards.


----------



## Frank D

*SPI monthly and Weekly*

Last week saw the market reverse down into trailing support levels @
 4526 and then continue up towards the September highs:- 4628

The upside target during the 3rd quarter is 4672, which may or may
 not reach, as the current price action the looks to be losing
 some momentum around these monthly highs.

Any weakness during the next 2 weeks would see the SPI back down into
 the September 50% levels once again @ 4443, verified by a 5-day 
breakout.

The trend direction is going to be helped or hindered by the trend direction
 in the S&P500, which may align with price reaching the monthly highs @ 1126


----------



## Frank D

*SPI Weekly and S&P 500*

S&P 500 reaches the September highs @ 1126

Any loss of momentum in the Australian Market is going to coincide with 
this pattern in the S&P 500.

Usually a daily reversal pattern in the S&P, would move down further and
 test the 5-day 50% level on the same day, providing another Sell pattern 
on Wednesday.

Last night's reversal bar didn't move down far enough, therefore it is
 too early to tell whether markets move back towards their midpoints at the
 start of the 4th Quarter.


----------



## Frank D

*SPI monthly and Daily range*

3rd Quarter Target reached along with the September highs:- 4672-76

The way i'm looking at the market is; further gains in the 4th Quarter
 towards 4895

However, I would like to see a either a retest of the September 50%
 levels during this month...

Or a drop in the 4th Quarter midpoint for the next leg upwards,
 starting in October.

What I don't want to see it September continue to move upwards (gone to cash on Stocks)


----------



## Frank D

*SPI Weekly and daily range*


Same pattern as Friday:- Support with an upwards bias of 
21 points, resulting in more consolidation during the 'day session'

Whilst the market remains above the highs @ 4628 the trend bias is 
upwards…

However, as per Weekly report I have the view that the S&P is starting this week with a 2-day reversal pattern: -
 trend guide 1116.50 (currently supported the S&P during globex hours)

Therefore, the SPI is once again going to be helped or hindered by the
 price action in the S&P 500 over the next 2-days. If the S&P 500 
follows with a 2-day reversal pattern (continuation down from Friday's highs)....

Then the Weekly level @ 4593 in the aussie market will be the trend guide 
for the rest of the week.


----------



## Frank D

*SPI Weekly and Daily range*

S&P continues to help the aussie market remain supported with
last night's up move. 

I favoured this week starting with a 2-day reversal pattern, but instead 
we have a 2-day stalling pattern above 4593 with today's reversal down
 from Tuesday's highs

Until there's a 5-day low breakout, the congestion around the highs (upward bias) can
 continue until the start of the 4th Quarter.

4th Quarter target remains 4895, but my preference is for the market
 move down and then continue higher from the start of October...

rather than see September continuing higher and reaching 4895.


----------



## Frank D

*SPI Monthly and Weekly*

Expectation that SPI would hit resistance @ 4672-76 has played out.

The reversal pattern down into the monthly 50% levels hasn't played out, 
as 4602 continues to support the market this week.

My expectation is for the trend to continue upwards in the 4th quarter...

However, my ideal pattern would be to see a rotation back down into
 the October 50% level:- form support and then HOOK back above
 4584.

For a continuation up towards 4895 over the next 2-3 months during 
the 4th Quarter, as long as the market remains above the 4th 
Quarter 50% level


*Next Week*:- trend guide is 4658 depending on the price action in 
the US overnight

If the market is below 4658 for the first 2 days next week, then i'll look
 for a 'short' trade set-up from Wednesday onwards, as part of a 
rotation back down into October 50% levels

*Note:- New Book should be out in about 3-weeks*


----------



## barney

Please remember to let me know as soon as the new book hits the "shelves" Frank .... Looking forward to it. 
Cheers.


----------



## Frank D

*S&P 500*

S&P price action last night suggests further gains towards the Weekly
 highs and then to 1174 +

Wednesday on the SPI won't open below 4658, (sell set-up pattern) 
and probably continue up towards 4895 sooner than I hoped for.


----------



## Frank D

*SPI Weekly and 5-day pattern*

Wednesday sell day, but not precisely from my upper resistance levels 
@ 4724.

Confirmed break @ 4694 verified the sell day down towards 4658, which
 is currently the trend guide for this week.

I would continue to be bearish in the short-term only if this price action
 was occurring below 4658, or today opened below 4658.

At this stage it’s too early to tell other than a 1-day sell pattern
 set-up


----------



## Frank D

*SPI Weekly and Daily range*

Current price action helps validate my overall view and 'preferred pattern'
 of rotating down from September resistance levels and back
 towards the 4th Quarter support levels

The break of 4658, which I didn't think was going to 
happen (Wednesday 'sell' pattern), was what was needed.

Any further weakness will need to be helped by the S&P moving lower as
 well.


----------



## Frank D

*AUD/USD Primary and Secondary cycles*

2nd quarter sell off in the AUD down into the Yearly 50% level (#10)

3rd Quarter support, and then the continuation of the up trend  # 12…..

This resulted in a *breakout* that should extend up into the October highs:-  break and extend pattern

*Note*:- Yearly high completion target is 97.86, therefore the AUD begins to hit higher timeframe resistance levels between 97.86 and the October highs.

I'll be Looking for a rotation back down towards 93.61 probably in the 3rd week of October.

If the AUD is going to continue higher thereafter, it will be from the
 November 50% levels towards higher highs in 2011 (Target unknown as yet)

If there is going to be higher highs in the 4th Quarter and 2011, then
 validate the next UP leg using forward timeframe analysis and the
 November 50% levels.


----------



## Frank D

*NYMEX OIL*

My view is that OIL has hit resistance levels  in October, and begin to
 move back down into  75.63 during the 4th Quarter

However, it might not happen right away, as Friday's 5-day low can 
start next week with a 2-day up move.

Ideal set-ups probably happen later in the month, and then verified by 
price trading below the Weekly 50% levels.


----------



## Frank D

*NYMEX OIL*


My view OIL has hit resistance around the 4th quarter highs in October
 and is now trying to move lower.

Once again we similar pattern as last week, which can see another
 2-day rise upwards early next week.

if that happens then $83.44 will be seen as resistance and a possible 'Wednesday' sell pattern.

At this stage I'm not expecting a large and dramatic reversal down into 75.68 during the
 current month....

 but we move back inside the channels for the first time in a number of weeks (consolidation with
 a downward bias)


----------



## Frank D

*AUD/USD *

As mentioned a number of week’s ago….

https://www.aussiestockforums.com/forums/showpost.php?p=583766&postcount=795

Expectation that the AUD would rise up into .9979 and reverse down in the
 3rd Week verified with a 5-day breakout on Tuesday.

*OIL Futures*

 Nymex oil futures has followed a similar pattern as previous post 
suggested, with this week’s rise up into 83.44 on Monday providing a
 short set-up (sell higher daily open and resistance)

*S&P 500 (chart Below)*

And as per Weekly Report....

http://www.usindexweekly.blogspot.com/ 

Once the S&P 500 hit 1182, my expectation was it was hitting brick wall 
in the 4th Quarter.  This hit on Monday and Tuesday like all other 
derivative markets have followed a similar 3-week reversal pattern and
 a trending 'sell'  day on Tuesday.

However, I would have preferred Tuesday to have broken support in the
 daily range. 

*Doesn't happen often when they all align, but it makes it sweet*


----------



## Frank D

*SPI Futures*

Aussie market continues to consolidate during October.

upside target remains 4900 during the 4th Quarter.

Ideal pattern would be a retest of the support levels in November,
 verifed by a lower weekly close and then the following week continues higher. 

Not ideal to see a lower weekly close next month and the following week 
trading below those levels in the 4th Quarter.


----------



## Frank D

*S&P 500*

 S&P continues up into the November's highs...

Helped by the Federal reserve coming out late yesterday with 
an announcement that they are printing $600 Billion to stimulate the
 economy....

However, the Monthly close above October's highs help set-up the expectation that the trend
 was continuing higher:- *break and extend pattern *into the following monthly highs


----------



## Frank D

*SPI Weekly and Daily range*

SPI has completed the move back into the previous Weekly breakout in
 the first 2-days of the week @ 4752.

This is part of retesting the previous Weekly breakout in the 
first 2-days, and once validated the market often 
continues towards this week’s highs, as part of the trend continuing higher.

However, I have the same expectation in the S&P 500, as part of a 
2-day reversal pattern back towards 1201.

If that happens overnight, the SPI will open lower on Wednesday, as the market hits the 2nd monthly highs in November and once again moves into another consolidating pattern during the current quarter.


----------



## Frank D

*SPI Weekly and Daily range*

Early support @ 4744 providing a 21 point up move on Wednesday...

However, support failed after lunch and the Australian market moves
 back into a rotation pattern down into Wednesday's lows:- random support

Looks like more consolidation in the 4th Quarter (above 4582).


----------



## Frank D

*SPI Futures*

Market once again looks to be moving into another consolidation phase
during November between the Weekly levels.

*Support as shown around 4582*


----------



## Frank D

*SPI Futures*

SPI coming down into support levels once again @ 4571-82.

If the market is going to go higher then these levels need to be verified 
by this week's Friday close (or the next) and then *continue higher in the
 last week of the current month and then push upwards in the first week of December from the December 50% level*

What we also notice is that December has a higher step formation.

This can often end up a bearish pattern (please refer to new book 
regarding forward bearish patterns)


----------



## Frank D

*SPI futures:- Dilernia Model*

SPI is down into major support levels in the 4th Quarter

There is also a breakout of the weekly lows @ 4593, which could result in
 the next 3-days consolidation around major support levels.


As mentioned a couple of weeks ago, the up trend won't normally
 happen until the last week of the current month (next week) and
 December pushes up from the new monthly 50% level.


Up trend will be helped by the following week rising up from major support
  & trading above the higher step & 50% level in December, which can 
often be bearish.


Otherwise if Support doesn't hold the trend bias is down towards 4340
 for the start of 2011, as per recent Weekly report.


----------



## Frank D

*SPI Futures:- Dilernia Model*

Higher timeframe support and a swing back towards the 5-day 
breakout @ 4585

As per morning report, the market can remain consolidating under 4593 
for the next 2-days (Weekly lows)

or there's possibility of closing yesterday's breakout @ 4621-25


----------



## Frank D

*SPI Futures:- Dilernia model*

Continuation from Yesterday....

Tuesday’s breakout @ 4621-25 and retest with today's higher open

Often the market will retest the previous breakout, which then forms
 resistance, helped by today’s levels @ 4516

There will be no leads from US markets overnight (Thanksgiving)… but the *trend guide
 tomorrow will be the Weekly lows @ 4593.*

Either the market continues upwards from yesterday’s reversal 
and higher timeframe support levels towards 4688

Or below 4593 and the market moves into a lower Weekly close
 around higher timeframe support levels


----------



## Frank D

*SPI futures:- Dilernia model*

Last week rising up from higher timeframe support levels.

Interesting price action will be from Wednesday onwards and the start
 of December


----------



## Frank D

*SPI futures (Dilernia model)*

Last day of the month and the market remains consolidating above 
higher timeframe support levels…

However, those levels shift dynamically starting from tomorrow.

Market remains in a 3-day sell cycle @ 4629.


----------



## Frank D

*SPI Futures*

Higher timeframe support levels confirmed with today's breakout of the
 5-day high @ 4635 (3-day cycle 4637)

first target reached @ 4696 (Weekly 50% level)... with an expectation of
 a break and extend pattern into Friday's highs

I'm expecting more gains next week....

However, there is the possbility that price revists the breakout
 and the November 50% levels for 1 day *'depending on the price action
 in the S&P 500 overnight'*


----------



## Frank D

*SPI futures (24 hour market)*


Break and extend pattern from Thursday's highs completes into 
Friday's highs @ 4746 (random resistance)

In a market that's trying to trend higher....


----------



## Frank D

*SPI Futures:- Dilernia model*

Any further gains during December will be dependant on Support 
holding around 4681-88.

Current price action is a reversal pattern towards trailing support
 levels.


----------



## Frank D

*SPI Futures*

sycom went down into a lower of 4690 and today set-up the next long
 trade back into the highs using 4714 as the trend guide & support.

Currently there is 'resistance' around these upper levels…

But I’m looking for the market to close on it’s highs on Friday.


----------



## Frank D

*SPI Futures:- Dilernia Model*

As mentioned over 3-weeks ago…

_Last week of the month (November) will move up
 from support and continue higher during the first week of December_.

This is what we have seen happen since then.

I also mentioned back then…

_The only potential bearish pattern to appear would
 be a 2nd week reversal and a weekly close below the
 December 50% level._

*Next week begins the 2nd week…*

Therefore the trend remains up with the expectation the market is
 heading towards higher highs into 2011

However, be aware if coming into the end of next week and the market
 is trading below 4689, as it will often put pressure on the market for the 
rest of the month.


----------



## Frank D

*SPI Futures:- Dilernia Model*

As mentioned over 3-weeks ago…

_Last week of the month (November) will move up
 from support and continue higher during the first week of December_.

This is what we have seen happen since then.

I also mentioned back then…

_The only potential bearish pattern to appear would
 be a 2nd week reversal and a weekly close below the
 December 50% level._

*Next week begins the 2nd week…*

Therefore the trend remains up with the expectation the market is
 heading towards higher highs into 2011

However, be aware if coming into the end of next week and the market
 is trading below 4689, as it will often put pressure on the market for the 
rest of the month.

*Note:- Please refer to pages 110 & 111 of my new book, as it describes
 in detail these exact same patterns that we have seen over the 
past number of weeks *


----------



## Frank D

*SPI Futures*

Trend remains stable during December, and there’s no sign of a 
2nd week reversal pattern based on the current price action

If there was, the market would already be trading below the 3-day
 cycle @ 4751 and heading down on Friday and closing below 4690.

At this stage whilst the market is trading below 4780 the trend bias is 
to move lower…

But as we have seen all this week, the market is lucky to move more than
 21 points during the day, and hasn't completed the usual 
42 points all week


----------



## Frank D

*S&P Monthly and Weekly (Dilernia Model)*

S&P completes the break and Extend pattern from the October highs @ 1174 into the
 December highs @ 1249

DOW is lagging in the same pattern, so the S&P is likely to hang around these
 upper levels for a number of days.


----------



## Frank D

*SPI Weekly and Daily range*

Last day of the Primary cycle and short -term weakness, as the market remains 
below 4791 this week.

Random support on Friday's lows (42 points down from yesterday's highs)

*Weekly report out tomrrow*


----------



## Frank D

*SPI Weekly and Daily range:- Dilernia model*

I have no idea what triggered that drop, "flash crash",  but that completes the
 move down into the 3-week lows...

which is the pattern that I normally associate with the market moving down and then continuing higher 
in the following Quarter.


*Previously weekly report*.

http://austindex.blogspot.com/2010/12/aussie-index-spi-18th-dec-2010-weekly.html

_"In the short-term the trend remains stable with an upwards bias, however we need
 to keep an eye on the possible SPI move down into the Weekly lows @ 4692 
over the next 2-weeks...

As this pattern would provide the next 'support' level for the trend to continue
 towards those first Quarter highs in 2011"_


----------



## Frank D

*SPI monthly and Weekly*

SPI Trading between two key levels of 4703 (January 50% level) and Support
 @ 4675.

I was looking for more upside early this week, because I had a view that US 
markets would begin this week with a 2-day rise, and the SPI would open higher
 on Tuesday

Instead the S&P 500 has moved into another consolidation pattern on Monday, and
 the SPI remains below the January level @ 4703.

As pointed out in the Weekly report, the Aussie market and US markets aren’t in 
synch, which is a concern if US markets follow a similar pattern of visiting their 
own Weekly lows this month.


----------



## Frank D

*SPI futures*

4675 holds support, as the S&P 500 continues higher.

There is a breakout of the 5-day high today @ 4734, with the expectation that 
it will try and continue towards the Weekly highs today. (above the Weekly 50%)

The continuation of the trend today will be helped or hindered by employment numbers out @ 
11:30am


----------



## Frank D

*SPI Futures (Dilernia Model)*

After finding support @ 4675 last week, my view is that the SPI will 
continue towards the January highs…

Market remains orderly between the levels, after last week's highs, then yesterday’s
 reversal down into the Weekly 50% level @ 4741, and today's move back towards 
the highs using 4753 as support.

As illustrated in my new book ..._Price moves up into the Weekly 
highs and then reverses down into the Weekly 50% level…and then continues 
towards the monthly highs later in the same month.

Following Weekly highs will have less probability of stalling the market_


However, the price action will be determined by the S&P remaining stable, which
 is never guaranteed at these upper levels.

As per weekly report in the S&P, 1291.75 (resistance) has provided a minor
 reversal from yesterday's high (1291.50) of 8.5 points. (partial exit)

And I'm treating Tuesday as part of a 2nd day reversal, as long as it remains below 
the same level. (intra-day channel highs)

Otherwise the Primary trend in the S&P will continue to push up towards 1300, 
whilst the DOW lags in the same price action towards it's own cycle highs @ 11904, 
as happened in the first Quarter of 2010 (last Year)

And the SPI will continue towards it's own monthly highs


----------



## Frank D

*S&P Weekly and Daily range*

S&P has moved down into 1277, which is the pattern that I was looking for on 
Tuesday, as part of a minor reversal pattern.

1277 can act as random support for the rest of the week…

However, around these highs in January, it’s all about finding levels to short the
 market from, and start holding positions.

Simply because I believe there’s far more chance of the market heading lower,
 than continually making incremental higher highs.

The S&P doesn't need to reach a precise 1300 during the first Quarter for the market 
to reverse down.


----------



## Frank D

*SPI Weekly and Daily range*

Double Weekly highs on the SPI this week, followed by a reversal back down
 into Friday's lows (random support), helped by the price action in the S&P on
 Wednesday night

The market may find support today (friday's lows) and then rotate back upwards
 in afternoon trading, as it still remains above the Key January 50% level @ 4703.

but not whilst it's below the Weekly 50% level @ 4741.

It's the price action in the S&P from next week onwards that's the concern
 for markets in general.

*Weekly report out tomorrow.*


----------



## Frank D

*SPI (Dilernia Model)*

As per Weekly report, I was looking for the SPI to move into a 2-day reversal 
pattern upwards at the start of this week from Friday's lows.

This pattern completed with today's highs, and the market is now moving into a 
consolidating pattern.

Any further gains in the SPI towards the January highs in the last week of the
 month are going to be helped or hindered by the price action in the S&P 500 
overnight.


----------



## Frank D

*S&P500 (Dilernia Model)*

My view was that the S&P has reached its highs and was reversing down, however
 I needed to see a reversal pattern on a 'Friday' down into the Weekly 50% level.

The previous Week didn't play out as expected, and we saw the Market push
 back towards the highs (as noted in last week's report)

And finally this week provided the reversal down into the Weekly 50% level, 
with Friday's price action.

*Weekly reports out now....*


----------



## Frank D

*SPI Weekly and Daily range*

SPI continues into the Weekly highs @ 4816/18, (random resistance)

There is a breakout of the daily highs on Friday @ 4806, which suggests more gains.

Based on the current patterns, the SPI is likely to follow the double Weekly high (next week's highs) & into the February highs


----------



## Frank D

*SPI Monthly & Weekly*

SPI has been trading around the February highs all week, as this pattern completes
 the 2-month upward trend during the current Quarterly cycle @ 4883

Personally, I wouldn't buy into the market around these highs, as I would wait until
the market rotates back down into trailing support levels.

Next week's level is something to keep an eye on @ 4857:- 

My view is that the market will try and rotate back down...

however, as noted in the Weekly report:- there is a larger primary cycle trying to
 push the market up towards 5093 by the 2nd Quarter.


----------



## Frank D

*SPI Weekly and Daily range*

As per Weekly Report, the trend guide is based on the Quarterly and 
Weekly level @ 4881-83

However, this has been super-seeded by today's breakout of the 5-day 
lows @ 4889, helped by the rejection downward from 4917.

At this stage I'd treat the market as reversing down from the February highs, 
 & back towards the trailing support levels


----------



## Frank D

*SPI Weekly and Daily range*

SPI has moved down into the trailing Weekly support levels @ 4767, after Monday’s break of 
the 5-day lows

As mentioned in yesterday's recap... 4767 is a robust support zone in the SPI, but
 only after 1295 plays a supporting role in the S&P 500, as it did last night, and as 
it has done so for the past 6 months since September 2010.

Currently we have a short-term counter-trend move up from the current lows.

However, I don’t know whether it’s going to last more than a few days,
simply because the S&P is trading around the Yearly highs in 2011, which is a
major resistance zone during the first Quarterly cycle.

My gut feeling says a minor counter-trend move, but a potential for more
weakness from March onwards.

*Weekly report out tomorrow.*


----------



## fingl

U posted charts with 3 lines support and resistance. How do u calculate the 3 lines projection target for next month?


----------



## Frank D

*S&P 500*

As mentioned in the most recent Weekly report….

_"Weekly support @ 1295 is simply a short-term counter trend move back to retest
 the breakout @ 1329.

If the market stalls @ 1329-31, and is once again trading below the Weekly 50% 
level, then traders need to keep an eye on the lower Weekly level @ 1304"_

The Market has stalled @ 1329, and it did reverse down 8.5 points to be trading below 
the Weekly 50% level.

However, Monday failed to remain below that level, and has instead remained above
 @ 1322.50 during cash market hours.

My view of a short-term counter-trend move upwards and then more weakness from
 MARCH onwards now looks less likely, unless there's selling during globex hours coming 
into the start of the new month of March.


----------



## Frank D

*S&P 500*

*Resistance 1331-1334*

Reversal at the start of MARCH back down into 1300-1304.

Now things start to get interesting....


----------



## Frank D

*SPI Weekly (day session)*

As noted in the Aussie Index Weekly report...

_"We should all keep an eye on how the S&P 500 trades over the 
next 2-days, as this could help set-up the overall trend over the next few weeks.

As there is the potential for more weakness if the market begins trading below
the monthly 50% level in MARCH."_

*The SPI is currently being supported at the MARCH 50% level and Weekly 
lows....(4764-78)*


----------



## Frank D

*SPI Monthly, Weekly & Daily*

As per Weekly index report, looking for a Gap closure down that matches the 
critical support levels in the SPI for MARCH:- 4807.

This was set-up with Monday's rejection pattern @ 4844

As per Weekly report, the larger timeframe cycle  suggest further gains using
 4807 as support ;- orderly patterns towards new highs, as long price remains
 above 4807

However, that can quickly change if the S&P shows further weakness whilst it's
 trading around it's 2011 highs.


----------



## Frank D

*SPI Weekly (day) and 5-day pattern (24 hour)*

SPI continues to find support in the day session around it's Weekly lows and
Monthly 50% level in March.

Trend guide for the rest of this week is 4806/7 (tomorrow)

There's continued weakness in US markets (selling around its highs), but a
 failure to break support levels.


----------



## Frank D

*SPI Monthly and Weekly*

the SPI has moved down towards the March lows in the day
 session @ 4696....

This could result in the market finding random support, but it;s likely to
 struggle to rise higher than 4772 for the rest of this month

*There are two patterns at play in the larger cycles....*


#A) market is rotating back towards the 2nd Quarterly 50% level in
 April @ 4652, which forms support


#B) market continues to drop down towards 4566 during the last month of 
the Quarter, and then 4652 becomes the trend guide for the 2nd Quarter.

If the market opens below 4652 by April, then there's potentially more 
weakness to start the 2nd Quarter.

*Note:- S&P hasn't as yet broken support*


----------



## Frank D

*SPI Weekly and Daily range*

Break and Extend pattern in the Weekly timeframe has completed from last 
week's break @ 4772 into this week's lows @ 4582

SPI has *completed Set-up B,* (as described above), and moved down into 4566

Currently supported at the Quarterly 50% level and Monday's lows. 

My view is that the market will try and swing back towards a retest of
 the breakout later this week, but it might struggle to rise above 4594 today.

If it does rise above 4594 then my swing target is 4650

*Note:- *S&P is back around support levels, if these support levels fails then 
the larger reversal in the SPI is down towards 4444


----------



## Frank D

*SPI Weekly and Daily range*

My view was that the SPI would rise upwards from 4565 and *retest*
 the breakout, but then move back down into April's lows

Today's trend guide @ 4594 was the support level, but that failed after rising 
21 points, and now the market has continued down into Tuesdays' lows, and likely 
to continue down towards 4442.

*S&P support levels have now failed.*

Those support levels have begun to break today during globex hours, 
and whilst below those levels my view is that the S&P will begin to look for a
 larger reversal pattern towards 1210.

The SPI lower level is @ 4442, however if the S&P continues down into 1210, 
the SPI is likely to push through that level. 

*4442 will be the trend guide for the rest of 2011.*


----------



## Frank D

*S&P500*

S&P continues with the break of support levels this week.

first target is 1230 this week (minimum move).

There is a breakout of the weekly lows, therefore the trend is based
 on following the break and extend pattern into next week’s lows.

Which could see the S&P down around 1202-1210.


----------



## Frank D

*SPI & S&P monthly ranges.*

The SPI is currently supported above the Quarterly 50% level @ 4565.

However, it is also trading below the March low, which has hit this week and stalled.

What we also notice is the S&P swinging upwards and retesting the MARCH 50% level,
 and currently being rejected down.

*In conclusion:- *currently there has been a minor swing upwards over the past
 5-days, but my view has always been that there is a potential 2nd selling
 pattern occurring from April, or down towards lower lows at the start of
 April.

*Both markets currently remain in a Secondary bearish cycle*


----------



## Frank D

*S&P Monthly and Weekly*

Last week's breakout has failed to continue lower in the S&P, confirmed with 
Today's continuation above the Weekly 50% level.

Same pattern as the AUD, which could see the S&P backaround the Weekly highs
over the next 2-days.

My view was for the SPI and S&P to reverse back into their Weekly 50% level and 
then continue lower, towards double monthly lows in April

Based on today's price action that has changed.


----------



## Frank D

*SPI Weekly and Daily*

S&P 500 remains above key support levels (upward bias), with the SPI is now
 trading around the Weekly level @ 4804.

This week is either going to continue to trend towards the Weekly highs, but I’m
 not sure how much upside there’s left in the tank for today, when the market
 is already trading around the daily highs @ 4810-16

Or this week is pushed back down towards the Weekly 50% level, which aligns with 
the April 50% level and the start of the 2nd Quarter.

First sign today would be price trading below 4791


----------



## Frank D

*S&P Monthly and Weekly*

As noted in last week’s post, Thursday’s price action had changed the ‘sell’ cycle into
 a trend with an upward bias once it closed above 1293

There are two possible patterns that can play out for the rest 
of this week….

#1) remains below the Weekly level @ 1319.75 and retests the Weekly 50%
 level @ 1292/93.

*This is seen as support.*

#2) continues to trend towards the Weekly highs @ 1335, and makes a beeline
 towards the monthly highs


----------



## Frank D

*SPI Weekly and Daily range*

Wednesday’s breakout of the daily highs and the weekly level has resulted in the
 trend moving towards the Weekly highs @ 4884.

This will also complete the break and extend pattern in the daily range around
 today’s highs.

*There are two possible patterns in the short-term….*

Continues to follow the double weekly high pattern into next week’s highs 
(don't trade shorts above 4891), as the extension is towards 4944.

Or, 

today completes the move into Weekly and daily highs, and we see a
 short-term reversal, with a possible move back down into the 5-day 
50% level @ 4825


----------



## Frank D

*SPI Weekly and Daily*

today's trend guide is 4943.

If above 4943, it will complete the *double weekly high pattern @ 4965 :- random resistance @ 
4962-69...*  (April highs @ 4978)

I'll be looking for a *minor top pattern today,* with the possibility that the
 trend moves back down towards the Trailing Weekly levels (4813) over the coming days.

The *S&P 500* continues to remain above key the Weekly level @ 1322, which 
should normally continue to push up towards 1346-52..., and this could push 
the SPI higher.

However, after 3-days of trying to continue upwards in the S&P, Thursday could begin
 a minor move down, if it begins trading below the 5-day 50% level, but then it needs to crack 
1322 (5-day low breakout)

Therefore, any highs in the SPI today will need to be helped by the S&P 500
 moving down on Thursday, and not up towards 1346-52


----------



## Frank D

*DOW and S&P 500*


My view was that Thursday would try and move lower, and how both 
markets responded to their Weekly levels would set-up the short-term patterns
 over the next 3-5 days

Both markets moved down on Thursday, but both found support above those Weekly
support levels

Based on the current price action I would think both markets will try and make a
 move towards the Weekly and Monthly highs (as long as they remain above
 those levels on Friday)


----------



## Frank D

*SPI Monthly and Weekly*

the SPI has moved up into the monthly highs in April @ 4978, and in my opinion has 
hit resistance levels and will begin to rotate lower over the coming weeks, and 
move back down towards the lower Weekly levels.

Overall target in the 2nd Quarter remains 5093 to 5193....

However, buying at these highs is open to risk even though I think the market will 
continue higher.

I'd wait until the market unwinds over the next 3-4 weeks (choppy), and 
hopefully aligns with lower support levels in the month of MAY for the next
 potential move upwards


----------



## Frank D

*SPI Primary and Secondary Cycles (Left Chart),
 and the S&P 500 Weekly (Right chart)*

The SPI has pushed up slightly hitting 5006 and stalling.

As noted in the Weekly report, my view is that the Market has reached it’s highs
 and will begin to rotate back down, helped by the switch in Weekly dynamics in
 the S&P 500, with this week’s open.

My view is that the trend bias is up towards 5093 to 5139, but that’s more likely
 going to happen later in this Quarter.

There are two possible patterns, and that will depend if the S&P holds support 
levels (above 1300-1304).

If it does hold support, then I’ll look for the next push upwards from MAY, as 
the market ‘chops’ around for the next 3-weeks *(SET-UP B)*

If it doesn’t hold support, and the S&P moves back down towards 1247-54, then
 the SPI can makes its way back towards 2nd Quarter Support *(SET-UP C)*


----------



## Frank D

*DOW and S&P 500 Weekly*

US markets have continued down, but remain above or around their Weekly 50%
 levels.

The most robust pattern for any further short-term weakness in both would be 
from Wednesday's daily 50% levels, which align with last week's lows, as the 
DOW makes it's way towards the April 50% level, and the S&P down towards 1295.50

However, if above the daily 50% levels, then both markets could see a swing 
back towards this week's highs once again, simply because the Weekly 50% levels are 
supporting the current trend.

My view is to continue down, but I wouldn't discount a higher daily close


----------



## Frank D

*S&P Weekly and Daily*

S&P continues lower, using both the Daily 50% level and last week's
 lows as resistance:- 8.5 to 14 points

However, the S&P continues to remain above critical support levels @ 1300-1304


----------



## Frank D

*SPI Weekly and Daily*

SPI continues to consolidate around the highs, as the S&P continues to remain 
above support levels @ 1300-1304

SPI swing target for today is 4905-4911, however, after already rising up 42 points
 from today's support levels, the rest of today could move into a sideways pattern.

Whilst above 4855, 2-day swing pattern is towards 4926


----------



## Frank D

*S&P Weekly and Daily range*

As noted in the S&P 500 Weekly report...

_Because of the shift in the Weekly lows, there is now greater chance of a 
larger reversal pattern towards lower Support levels @ 1247-57, if there is a daily
 close below those Weekly lows @ 1299_

We currently have that pattern playing out, along with a breakout of the 5-day lows 
on Monday, which will often extend towards lower lows in the following day....

*There are two possible patterns....*

#1) remains within the daily range (Tuesday's lows)

#2) or drops like a thud down towards 1247-1256 over the next couple of days.

And (#2) is what my view is, as long as it remains below key support levels
 @ 1300-1304

*Note:-* Standard & Poors came out for the first time with a negative outlook 
on US credit rating, which if it spooks the market further, then look for a larger reversal
 pattern towards 1173-1185.

*However, at this stage, first target remains 1256*


----------



## Frank D

*S&P Weekly and Daily*

Nothing is ever 100% guaranteed when trading the markets, and Tuesday’s price
 action is a perfect example of that.

Using a multitude of timeframes along with breakout patterns in a number of those,
 this often suggests further weakness in the short-term (Tuesday’s lows), with
 a possible reversal pattern down towards the April lows @ 1256.

Breakout pattern lasted only 8.5 points outside the daily lows

If that exact same pattern appears later on in this month or the next,  then
 I’ll have the exact same expectation, that the S&P is moving lower

*Back into a consolidation pattern during April*


----------



## Frank D

*SPI Weekly and Daily range*

The SPI continues to consolidate within the Weekly levels in April...

Random support 4893 (Weekly 50% level)

With the S&P now trading above 1337, and being the last week of April, there is still
 the chance that the SPI continues towards the Weekly highs @ 5009, and then a
 push towards the highs in MAY. (next week)

First it will need to move above 4960, and secondly the S&P to remain above 1337 
and move up towards 1356+

Anything below the weekly lows at the start of MAY is once again is bearish.


----------



## Frank D

*SPI Weekly and Daily*


SPI opens below the Weekly 50% level and is being sold down towards the
 Weekly lows.

Not sure how the rest of today will play out (random support 4846)

*note:- *next week's lows matches the MAY 50% level, which
 is a critical support level in our Market (April consolidation and coming into
 the start of MAY)


----------



## Frank D

*SPI Primary (2010) and current (2011)*

As mentioned at the start of April, the market was either going to continue lower...

                                                         or

 because the S&P 500 had remained above key support levels (Fake break), it was
 more likely going to continue to consolidate until the start of MAY, and then try
 and make another move towards  new highs in the 2nd quarter (5093-5193)

As we can see in the right chart below, the market has moved down into this 
Week's lows, and next week’s lows now match the *MAY 50% level. (Critical Support)*

The current price action suggests that the Market may continue towards 
*new highs in the 2nd quarter @ 5093 to 5193*,  once Support has been 
validated ( double Weekly low pattern)

However, keep in mind we had the same pattern in 2010, when the market
 reversed down from the April highs, and by the 2nd day support levels failed
 in MAY (left chart), on the back of weakness in the S&P 500.

*What’s the difference this time?*

The Primary cycles in the Aussie market are different, in 2010 we were below the 
50% level, whereas in 2011 we are above, so there’s more reason for the trend
 to continue higher during the current Primary cycle.

The S&P is also above the Yearly highs (1301-1331), whereas in MAY 2010, the 
market opened below the Yearly highs and sold off on the first day of MAY *(flash crash)*


And currently, US markets continue with QE2 until the end June, which can 
help underpin  the current upward trend in US markets.

*In conclusion:- be aware of any weakness below the MAY 50% level *


----------



## Frank D

*SPI Weekly and Daily*

SPI following the double Weekly low pattern into the Support levels 
in MAY @ 4759-67.

We should know by tomorrow or Wednesday how valid these support levels are in 
the larger Primary and Secondary cycles


if above 4828 by Wednesday it should help validate support....


otherwise watch for a potential 2nd day 'break', which was the same pattern
 as 2010


----------



## Frank D

*S&P 500 (left) & SPI futures (right)*

2-day reversal has completed in the S&P, remaining above it's Weekly
 level @ 1347. (support)

*Whilst the SPI has opened below the Support levels today, and has remained 
below them..*

I have two conflicting patterns, as I would normally associate the price action in
 the S&P as moving back towards the highs from Thursday & Friday 
(Wednesday consolidates or breaks support)

and I would associate the price action in the SPI as bearish, which is a mirror of
 the price action in 2010, without the flash crash.


----------



## sinner

Hi Frank,

I am curious about your thoughts on USDJPY during the current financial quarter, if you have a moment.

Thanks.


----------



## Frank D

sinner said:


> I am curious about your thoughts on USDJPY during the current financial quarter, if you have a moment.




I don't trade it or track it anymore, I stick to 3:- AUD, Euro & GBP...

The best I can give is an overall view of the US Dollar (Index)

*USD Index *

I think the USD has found support around the Primary and Secondary lows, and
 will begin to rise...

then if it's going to go lower, *the next best set-up will align with the June 50% level, and  breakout of these larger timeframe support levels...as it struggles to rise higher that the lows of the 4th Quarter in 2010*

if that happens the likely trend will continue lower into 2012. (dollar collapse)

*In the meantime,  I think USD index will be supported for the next 
4-weeks:- upwards/ or sideways into June*


----------



## sinner

Frank D said:


> I don't trade it or track it anymore, I stick to 3:- AUD, Euro & GBP...
> 
> The best I can give is an overall view of the US Dollar (Index)
> 
> *USD Index *
> 
> I think the USD has found support around the Primary and Secondary lows, and
> will begin to rise...
> 
> then if it's going to go lower, *the next best set-up will align with the June 50% level, and  breakout of these larger timeframe support levels...as it struggles to rise higher that the lows of the 4th Quarter in 2010*
> 
> if that happens the likely trend will continue lower into 2012. (dollar collapse)
> 
> *In the meantime,  I think USD index will be supported for the next
> 4-weeks:- upwards/ or sideways into June*




Thanks anyway Frank for your thoughts on the DX.


----------



## Frank D

*USD Index *

My view is that the USD had found it's lows and would begin to rise upwards, putting pressure on Currenices to drop


*There are two possible patterns that can  play out*


#1) the trend continues up towards the 3rd quarter 50% level in July, as shown in 
the left chart.


#2) this current reversal pattern is going to fail to move higher than the 
MAY 50% level, and also the lows of the 4th Quarter in 2010...


The market consolidates for the next 4-weeks below these levels, and then there's 
the possibility that the larger timeframe support levels fail in the last month of the 
2nd Quarter (June)


----------



## Frank D

*SPI Weekly and daily range*

US markets continue to remain above their MAY 50% levels, after finding support 
this week.....

And the SPI has rested it's Quarterly 50% level @ 4649, and now we have a 5-day high breakout 
on Thursday, which should continue to extend into higher highs by
 Friday:- *break and extend pattern*

MAY 50% level @ 4775, Weekly swing target @ 4805  
(as long as it remains above 4731)


----------



## Frank D

*SPI Weekly and Daily range*

MAY 50% level completed after Thursday's breakout....

But Friday remained within a tight trading range, with little range movement
 towards the extension target & Friday's daily highs.

New Weekly levels out tomorrow


----------



## Frank D

*SPI Weekly and daily range*

The SPI broke its Weekly lows yesterday, and the S&P broke its
 Weekly lows last night.

Trend suggests it is moving down into the MAY lows @ 4492/501, and likely
 double dip into June lows (unknown as yet)


----------



## Frank D

*SPI Weekly and Daily range*

The SPI continues to trade below key levels in the Weekly timeframe (4648) 
with the expectation that it's trying to move towards the MAY lows.

Overnight, the S&P didn't continue with the Weekly break, instead it rotated
 back towards the *MAY 50% level @ 1324.50 *and stalled.

Therefore it hasn't closed above key levels on Wednesday to help validate
 more strength in the short-term:- towards the Weekly 50% level @ 1341.50

That can obviously change overnight.


----------



## Frank D

Frank D said:


> *US Dollar 4th MAY *
> 
> I think the USD has found support around the Primary and Secondary lows, and
> will begin to rise...
> 
> then if it's going to go lower, *the next best set-up will align with the June 50% level, and  breakout of these larger timeframe support levels...if that happens the likely trend will continue lower into 2012. (dollar collapse)
> 
> In the meantime,  I think USD index will be supported for the next
> 4-weeks:- upwards/ or sideways into June*



*


We have seen the US dollar rise up from the 2011 lows, which matched the
 2nd Quarterly lows in MAY.

Things get critical as of next week, as the market has consolidated coming into
 the start of June.

If the USD dollar is going to remain stable then it needs to rise upwards.

If the USD dollar is going to collapse, then the next 5-days will begin to slip and 
close below the June 50% level. If that occurs then we have a possible breakout of
 the 2011 lows, which will extend towards lows in the 3rd Quarter, but over the
 next 6 to 9 months continue towards 2012 lows. (Target unknown as yet)

How the USD performs over the next 5-days will heavily influence the upward trends 
in commodities and currencies*


----------



## Frank D

*SPI Weekly (24 hour) and Daily*

At this stage there is an another rejection pattern occuring from the
 June 50% level @ 4734

Whether it continues down into 4649 (Weekly level) today will depend on the
 reports coming out...

11.00 am china manu PMI

11.30 am AUS GDP Q


----------



## Frank D

*S&P Weekly and Daily*

As per Weekly report, I was looking for the S&P to push upwards over the
 first 2-days, and then from Wednesday onwards to reverse back down into 
the June 50% level.

That played out, but the reversal pattern kept on going, breaking out of the 
Wednesday's lows @ 1318, which can often suggest further short-term 
weakness:- Thursday's lows

Next 2-days gets interesting, as the S&P can continue remain in a tight trading
 band below the June 50% level, but within the 5-day range.

or close below 1301 on Friday, which can lead to more weakness in the 
current month.


----------



## Frank D

*SPI Weekly and Daily range*

I don't think it will be the low in the current Quarterly cycle....

However, I think today the market will find short-term support @ 4575/81
 that could lead to a 2-3 day counter-trend move upwards. (depending on the S&P remaining above 1301)

*There are two possible patterns today...*

*Trend guide 4615*

#1) market is sold down into 4575/81, finds support and then looks to move 
upwards, with a possible target 4644-49

#2) market opens above 4615 and moves upwards into 4644-49, hits resistance 
and is then sold down.

don't trade longs below 4575, don't trade shorts above 4650.
*
I'll give my view on where I think the low will be in tomorrow's
 Weekly report*


----------



## Frank D

*SPI Weekly and S&P 500 Weekly*

As Per Weekly report, once both the SPI and S&P move down into the June
 lows, I'm looking for a short-term counter trend move upwards.

Therefore Thursday needs to hold support and Friday close upwards.....


*Note*:- DOW is still 150 points away from it's JUNE lows, so it can drag it 
down lower (1-day).

*However, any JUNE support is only seen as temporary, as I have the trend
 moving towards lower lows in July*


----------



## Frank D

*SPI Primary and Weekly cycles*

Primary 50% level @ 4442 and June lows supports the market, and we have seen a
 last week up move to close out the month and 2nd Quarter.

My view is that it's going to make another play for the July lows or 
'double-bottom', after this week's rise.

However, I could be wrong and the market continues towards the 3rd 
quarterly 50% level @ 4715, and as high as 4804, before the market moves into
another 3-month sideways pattern.


----------



## Frank D

*SPI Monthly and Weekly cycles*

As noted a number of weeks ago, I still had the view that there was a potential 
lower low pattern in July after an initial up move towards the higher timeframe
 50% levels in the last week of the 2nd Quarter.

These BUY zones align with the July lows and also the 3rd Quarterly levels around 
4405.

These BUY zones need to be validated with lesser timeframe patterns for a swing
 back towards 4721 to 4804…

Because a failure to hold these support levels will see the SPI move down
 towards 4137.

A move down towards 4137 will depend a lot on how the S&P reponds to
 being back below 1325.

*Trend guide for the rest of this week is based on the
 Weekly lows @ 4468/70*


----------



## Frank D

_The SPI has hit the July BUY zones in sycom....These BUY zones need 
to be validated with 5-day high breaks.* Note:-* trading above the blue 
channel highs in the 5-day range will be the first sign, and also the Weekly 
level @ 4664....*Yesterday's report*_

These *July BUY zones* now have the potential to swing back towards the higher
 timeframe levels of 4721 to 4804.

The first sign of that happening is a *5-day high breakout @ 4500.*

However, based on the levels in the market and *today's higher open,
 4498-4500*, could form resistance and push the SPI back down 42 points
towards the Weekly level @ 4464, and as low as 4449.

As noted in the Weekly report, the only thing in my opinion that's going to push 
our market down towards 4137 is if the S&P falls over on the back of news that they
 fail to lift the debt ceiling


----------



## Frank D

*US Dollar Index *

3rd Quarter thrust pattern on the USD...

looks to be heading down towards lower lows during the current cycle.


----------



## Frank D

*S&P Weekly and Daily cycles*

S&P sell off on today's gap open, as the market was rejected down from
 a number of timeframe 50% levels (Daily and Monthly), completing the break 
and extend pattern into this week’s lows @ 1271, before the S&P found some 
buying support.

*Is the S&P going to rise upwards from these lows???*

It could, but a couple things traders should consider…

#1) trends that originate from the monthly 50% levels in the first week of the
 month can often continue to trend outward during the current 5-day cycle:- top
 to bottom. Therefore the changing channels in the 5-day range will be important.

*And more importantly…*

#2) the failure to reach a 4 trillion spending cut (only 2.5) as part of the
 compromise on raising the debt ceiling hasn’t met Standard & Poor’s 
requirements. 

This has the potential to see the US lose it’s AAA credit rating. If this is 
announced it will send markets lower, with a minimum move towards 1251, and
the August lows.

Therefore the current downward trend can stabilise around these lower
 levels, but, if the S&P cuts the credit rating of the US, then markets will
 spike lower on the news.


----------



## Frank D

*S&P 500 and the SPI (Weekly cycles)*

*S&P 500*:-  has continued with the monthly rejection pattern down into
 the August lows @ 1251

*SPI:-* has completed the break and extend pattern from last week's lows
 into this week's lows.

This is the first time in 2011 (8-months), that both the Aussie market and
 US markets are once again in synch at the same time. (BUY cycles)

_What does that mean?_

It means that after this week's trading (5-day cycle) there is a possibility 
that next week swings back upwards.

However, if S&P 500 continues to extend outward during the current  
5-day cycle, it will move down into 1208, whilst the SPI continues down 
into *4137/57 (Primary BUY zones)*


----------



## Frank D

*S&P 500 Primary cycles and the SPI Monthly cycles*

5-day rejection pattern in the S&P 500 (top to bottom) from the August 50% level
 is sending the trend down into the 2011 Yearly 50% level @ 1173

This is a critical support level in the S&P, and once this week is over, my view is
that price (once verified next week) will try swing upwards and retest the 
Quarterly level @ 1266 over the next few weeks.

* However, as the S&P is moving down, the SPI is now trading below 
the Primary BUY zone @ 4137* during this 5-day rejection pattern.

That means that the BUY zone needs to be verified by next week's open, and my 
view is that the SPI will likely swing towards 4405/4442 and stall.

Anything below 1170 in the S&P 500 is extremely bearish, and likewise the same
 in the SPI @ 4137

*Today's support in the SPI is @ 4074 (Friday daily range)*


----------



## Frank D

*S&P Primary and Weekly cycles*


S&P has followed the Primary cycles down into 
support levels @ 1169/1273.

In my new book there is a section on the current market conditions
*from pages 120 to 130*, that spells out the possible price action 
over the next 2-3 weeks, as described in today's S&P Weekly report.

http://usindexweekly.blogspot.com/


----------



## Frank D

*SPI Weekly and daily cycles*

Monday's support @ 3967 and an early gap closure to friday's lows, but I'm
 expecting more upside in the short-term.

As per Weekly report, my view is that early this week will try and rise upwards
 and move towards the Weekly 50% level @ 4207.

Once that price action is over, then I'll look for the completion of the break
 and extend pattern down into this week's lows (later in the Week)


----------



## skyQuake

Frank D said:


> *SPI Weekly and daily cycles*
> 
> Monday's support @ 3967 and an early gap closure to friday's lows, but I'm
> expecting more upside in the short-term.
> 
> As per Weekly report, my view is that early this week will try and rise upwards
> and move towards the Weekly 50% level @ 4207.
> 
> Once that price action is over, then I'll look for the completion of the break
> and extend pattern down into this week's lows (later in the Week)




Cheers Frank. Arrived at similar targets with different methods.

However all bets are off if a couple more ppl also agree to these targets


----------



## Frank D

*S&P 500 Primary and Monthly cycles*


S&P down into the August lows quicker than expected (US downgrade)

S&P Weekly report UPDATE...

http://usindexweekly.blogspot.com/


----------



## Frank D

*SPI Monthly and Weekly cycles*

SPI has moved back towards the Weekly 50% level.

My original view was for the market to move up towards this level and then be
 rejected back down.

However, because the *S&P has fast-forwarded the price action by reaching the
  the August lows @ 1115*, which is currently supporting the market....

There is still the possibility that the trend in the Aussie market continues upwards,
 as part of the 3rd Week counter-trend move (next week) towards (#B) 4404.

The Primary level @ 4137 comes into play once again for next week


----------



## Frank D

*SPI Weekly and Daily cycles*

As per Weekly report....

_Next week begins the 3rd Week, and if it follows last week’s report, 
then the market should continue to rally upwards over the first 3-4 days.

This is part of retesting the previous weekly breakout @ 4321, and could
 be as high as 4404 by next Thursday. (#C)_

The SPI is following the Wednesday daily range, and is moving up towards
 retesting the Previous Weekly low breakout @ 4321.

If the SPI is going to be around 4404 by Thursday, then US markets need to
follow a similar pattern, and continue upwards on the 3rd day.


----------



## Frank D

*SPI Monthly and Weekly cycles*

3rd day up move and the SPI can’t crack the August lows, whilst the 
S&P 500 can’t crack the 3rd quarterly level @ 1208.50.

My view was that a 3-day rally could move much higher, but it was from
 Thursday onwards that could see selling pressure in the markets.

Today's (Thursday) selling has resulted in a push downwards, aligned with
August lows, and a reversal could see the SPI back into the weekly 
levels (4154/4122) by Friday.

Any further selling in the market, as part of a potential move towards lower
 lows in September, will need to see the SPI trading below 4137 (next week),
 whilst using the 'new weekly levels' as a trend guide.


----------



## Frank D

*AUD/USD Weekly and Daily cycles*

The AUD/USD is a classic text book pattern that I was expecting to
 happen in the S&P 500.

 Three day rally in the 3rd Week, as part of retesting the previous Weekly breakout:- completed.

*Thursday sell pattern:- 11am levels*

And if it follows text book patterns, then I've mapped out a potential pattern 
on the AUD over the coming days, as shown in the Weekly cycles


----------



## Frank D

*S&P 500 and Daily cycles*


The S&P has followed last Thursday's 'sell pattern' and is once again 
consolidating around the August lows @ 1115.

My view is that the market will try and swing upwards and retest the 
Weekly 50% level in the short-term...

However, the larger cycles are pointing to further weakness towards
 1045 to 1015 by early September.

In the mean time, there's robust volatility within the daily ranges for day traders, 
as the market zig-zags within the higher timeframe cycles


----------



## Frank D

*S&P 500 Weekly and Daily cycles*

S&P has continued to move up from the August lows @ 1115 back towards the 
Weekly 50% level @ 1177

1173 is the Yearly 50% level. along with the Weekly 50% level @ 1177 can continue
 to act as resistance this week.

However, Obama is making a speech on Friday, and if there’s an announcement that
 QE3 or something similar is happening, the current reversal up from the August
 lows @ 1115 could see the trend back towards 1245 by next week
 ( Monthly 50% level)


----------



## Frank D

*SPI Weekly and Daily cycles.*

The SPI is back into the Weekly level @ 4305, which coincides with
 the August lows and Tuesday's highs.

Normally the market would *remain below these levels over the 
next 2-days, as the August lows continue to form resistance*…

If the market is going to continue higher, then from Thursday onwards 
would be the ideal pattern, as resistance levels disappear, and also the
 SPI will begin trading above the new monthly 50% level in September :- target 4555.

This is a similar pattarn as in 2010. The only difference is the 3rd Quarter 
cycles are different. This year being more bearish.

*Let’s see how strong the market is today using 4302-4305….*

It’s either going to follow a 2-day stall pattern into Thursday…

Or it’s going to continue upwards with daily breakouts over the next 5-days.


----------



## Frank D

*SPI Monthly and Weekly Cycles*


Last Week the market remained below the August lows until Thursday, when it
then attempted to breakout on the upside early in the day, but reversed
 to close back inside the 5-day range.

This was the first warning sign that Markets were going to continue lower, as part 
of the break and extend patterns in the 3rd quarter, helped by the September 50% level rejection patterns.

Current expectation remains a move down into the September lows 
(double bottom) to coincide with a 'lame' stimulus package announcement from Obama

Random support around this week’s lows


----------



## Frank D

*SPI Monthly and Weekly cycles*

Break and extend pattern in the Monthly cycles:- August down into September
 lows.

A ton of support around those Sept lows during the current month.

My view is once those September lows are reached,  (DOUBLE BOTTOM) there
 is possible support that could result in the next 3-months (4th Quarter) moving into
 a large sideways consolidation pattern until the start of 2012.

I should have a fair Idea how things play out over the next 5-days (next Week)

*Note:- *A possible support pattern in September will depend on price action in the
 S&P 500, as its own support levels are much lower, which could see the SPI dip 
lower in the 4th Quarter.


----------



## Frank D

*GOLD Primary and Wekely cycles*

Gold has rotated back down into a major support level in the 4th quarter. (SUPPORT)

All trends originate from these levels and continue outward, and if the Primary
 cycle trend remains bullish it shouldn't spend anytime below SUPPORT. The last
 time that occurred was  in July 2008, when price was $922.00

The most bullish patterns have been occurring in the 2nd month of the Quarter, as
 price in the first month rotates down into support, and then the 2nd month rises
 up from support and continues outward during each individual quarterly cycle.

However, this is the first month of the quarter, and price is already trading around 
support, so it wouldn't surprise me to see the next 4 weeks consolidate around
support.

When we look at the Weekly cycles (right chart).... there is a potential
 rejection pattern around the Weekly 50% level that could see price move towards 
next week's lows and as low as the October lows

*In conclusion*:- if you are bullish and believe that GOLD is going to continue higher, 
then these are the levels that should be of most interest.

Just keep an eye on the Weekly cycle for short-term weakness.


----------



## Frank D

*SPI Weekly and Daily cycles*

There are 2 resistance levels in early trading 3944 & 3951.

The trend bias is down 42 points, and as low as 3880 (Random support).

Often I will look at weakness on open using the upper resistance levels, however 
I'm not sure whether the market will continue down towards 3880, or weakness is 
only short-term (18-21 points)

Simply because the patterns in the Weekly cycles can often see more upward
gains this week. 

With the SPI rising up from this Week's lows, there is now a possible continuation of 
the reversal pattern towards the Weekly 50% level @ 4056, as last night's pattern 
completes the *break and extend pattern *from the previous Weekly breakout
 @ 4002 down into this week's lows @ 3820.

That means above 3951 and the trend bias is up. (first target 3979 intra-day)


----------



## Frank D

*SPI Weekly and Daily cycles*

SPI didn't close the gap in early trading from 4004...

but has continued to follow the Weekly cycles, rising up from this week's lows and
 now hitting the Weekly 50% level matched with Thursday's highs @ 4056-58

let's see how much selling comes into the market...

it's either going to hang around a be choppy between 4039-58...(21 point reversal only)

or it's going to reverse 42 points, and move towards yesterday's Gap by tomorrow.


----------



## Frank D

*SPI monthly and Weekly cycles*

SPI following the Weekly cycles, and likely to continue towards next week's
 highs (random resistance in the 5-day cycle)

The market may then remain under the 4th Quarterly level @ 4297 and consolidate
 for the rest of 2011....

However, the double low pattern earlier in October, and the current price action suggests a potential move towards 4519+ by November/December


----------



## Frank D

*SPI Monthly and Weekly cycles*

Trend continuing higher, as it follows the Weekly cycle highs @ 4345


Potential Target remains 4519+  by November.


----------



## Frank D

*SPI Weekly and Daily cycles*

Thursday break and extend pattern completed at friday's highs 
overnight @ 4425.

Friday's current price action is a retest of the Weekly high breakout @ 4345.

If the Weekly cycle follows the same pattern as the daily cycle, then it should 
remain above this level and continue upwards next week.

That's obviously going to be helped or hindered by the price action in 
US markets.

US markets have the same breakout patterns in both the Daily and Weekly 
cycles.

This often leads to Friday moving higher- friday's highs (random resistance)

If friday closes on its highs, then it's mostly likely going to extend upwards 
early next week.

*New Weekly levels out tomorrow.*


----------



## Frank D

*S&P Weekly and Daily cycles*

As per last week's report, my view was the price would move up into the
 Weekly highs, and then reverse down towards the November 50% levels.

Instead the opposite occurred, with Monday opening below the important
 level @ 1274.50 (4th Quarterly 50% level & daily channel).

current price action and support, and the rest of this Week (Friday) is
 determined by the* Weekly level @ 1250.50, and whether it continues to push
 up towards a higher Weekly close*


----------



## Frank D

*S&P Weekly and Daily cycles*


1274.50 and the 4th Quarter 50% level continues to act as resistance...

as the S&P continues to consolidate wiithin the Weekly and Daily cycles.

My view is more consolidation during this Quarter, but it won't
take much to send the market either way, whether it's a Friday rally on positive 
news out of the euro zone

or a collapse, and a Daily close below higher timeframe support levels.

Trend guide on Friday is based on the Weekly level @ 1236.


----------



## Frank D

*S&P 500 Weekly and Daily cycles*

Rise up from the Daily 50% level and blue channel highs…@ 1173

This has seen the Market has retest the previous Weekly low breakout @ 1196 & stall.

*The rest of this week is now based on the Weekly level @ 1189.*

This could result in more weakness, as part of retesting last week's breakout
 @ 1196 and moving towards this week’s lows @ 1128:- break and extend
 pattern.

Or Monday was the first day in a 3-day counter-trend move upwards, as part 
of a swing back towards the new monthly 50% levels in December.


----------



## Frank D

*S&P Weekly and Daily cycles*

Previous Report saw the 3-day rise go much further than 
expectated (Weekly highs).

Current price action has a 5-day low breakout on Thursday, and the expectation 
that it will extend towards Friday's lows, which could align with the
 Weekly 50% level.

Friday's lows random support:- 8.5 to 14 points

Any favourable news out of the euro zone on Friday could see 
a higher daily close (off its lows)

Anything less and it's likely to close around 1312 (Weekly 50% level)


----------



## Frank D

*S&P 500 Weekly and Daily cycles*

Early support @ 1229.50 (8.5 to 14 points) saw Friday swing back towards 
the resistance levels in the Daily and Weekly ranges @ 1246-49.

1246/49  formed resistance for a number of hours (8.5 points)

But good news out of the Euro Zone (I think), has seen Friday close higher.


----------



## Frank D

*S&P Weekly and Daily cycles*

S&P is back into it's Weekly 50% level @ 1215.50, and matching Tuesday low

Whilst the market remains above the higher timeframe 50% levels (Weekly and 
Monthly 50% levels) the current 4th Quarter looks stable, as price
consolidates within the weekly levels (& 5-day pattern trading) into the end of 2011. 

However, when you begin to look at the *Primary cycles for 2012*, price is 
beginning to trade under the 2012 Yearly 50% level, which isn't a 
good sign to start the new year off in.

Yearly 50% level not shown.


----------



## Frank D

*S&P Weekly and Daily cycles*

December 50% level and Weekly level has formed support @ 1198/1200.

confirmed with a 5-day breakout on Tuesday, with the expectation it 
will extend upwards on Wednesday (Wednesday's highs random resistance
 8.5 to 14 points)

Whilst the S&P is above 1231.50 (Weekly 50% level), trend bias is to move 
towards the Weekly highs by Friday


----------



## Frank D

*S&P Weekly and Daily cycles*

Wednesday's highs Random resistance of 14 points down into the 5-day 50% level

 And then a higher Weekly close by Friday, without reaching the Weekly and Daily highs.

*Next Week's trend guide @ 1264 *will determine whether the S&P continues up
 towards 1274.50+

or closes in the middle of the Weekly range (Weekly 50% level).

If the latter happens then it's going to align with the new Primary cycle 50% level
 at the start of the new year.


----------



## Frank D

*S&P 500 Weekly and Daily cycles*

As per Weekly report, the S&P remains bullish within its own Primary cycle,
 as long as it's above 1235 

Short-term cycles (above 1261.25) suggests more gains, based on the
 December 50% level support pattern extending up towards the January highs (1314)

Currently hitting a number of resistance levels within the Weekly cycle.

Any weakness in the S&P (not showing), and my view is that it's testing 
those Primary support levels @ 1235


----------



## Frank D

*S&P Weekly cycles*

Target remains the January highs @ 1314, as part of the extension upwards from
 the December 50% level.

Target could be reached over the next 5-days.

However, my ideal pattern would be this Week highs @ 1293.50 to form 
another resistance zone, and then see price move back down into the dynamic
 Weekly 50% level, which will be the support zone for a tilt at the January highs
 the week after next.

Patterns in the 5-day range should hopefully filter out any potential moves.


----------



## Frank D

*S&P 500 Weekly cycles*


S&P 500 remaining within the Weekly cycles in an orderly manner.

Target remains 1314 by January's end.


----------



## Trembling Hand

Frank D said:


> *S&P 500 Weekly cycles*
> 
> 
> S&P 500 remaining within the Weekly cycles in an orderly manner.
> 
> Target remains 1314 by January's end.




Frank every time I read your work I can only shake my head in disbelief. With all the absolute crap on here purporting to be from "traders" yours is without a doubt lightyears ahead. 

How is it that people can show such interest, even adulation,  in all the other _after it happened stuff_ and pass over your work? Without even a comment let alone full investigation??

Just the two little bits I pulled out of your first post in this thread should be a wet dream for anyone trying to work out the market (especially the little bit I highlighted),



Frank D said:


> Support and resistance as per defined by the AMT model is
> dynamic not static.






Frank D said:


> .....part of the plan is combining both *Time and Price,* because with all trends price has a natural flow that rotates between central zones and extends onward as Time moves forward. This relationship forms levels in the market that hinders Price from moving in straight lines, it moves between support and resistance. As Time moves forward support and resistance moves along with it. Knowing where support and resistance zones lie is a critical cog in the wheel of trading, because it’s these levels that become part of our trading plan. The levels are now ‘probability patterns’ with a realistic expectation that the same pattern will Repeat.




Any way good work.....


Carry on....


----------



## Frank D

Trembling Hand said:


> How is it that people can show such interest, even adulation,  in all the other _after it happened stuff_ and pass over your work?
> ....




I'm not dead yet, so the marketers haven't got a hold of my work and
flogged it to masses.

Thanks for your thoughts, TH.


----------



## barney

Frank D said:


> I'm not dead yet, so the marketers haven't got a hold of my work and
> flogged it to masses.
> 
> Thanks for your thoughts, TH.




Hi Frank,   and thanks for your last book ...... Still working through the nitty gritty, but so many valuable insights into the market as TH points out   ..

ps Welcome back TH .... Hope you hang around  for a while ... The place is not the same without you   

You two guys were a large part of me being able to turn my trading around from being a consistent loser, to being "semi- reasonable"    ...... Very appreciative of that !!


----------



## Frank D

*S&P Weekly cycles*

S&P is currently trading around the January highs @ 1314.

These resistance levels will disappear in two days time, and extend up towards
 the February highs. (potential 2-month wave pattern during the first quarter)

The focus should be trading the *current break out pattern from 1278.

The completion of the Break and Extend pattern is around 1235*

In the short-term:-  the Weekly level @ 1314 will determine whether early next 
week moves down, or price continues to push higher, as it follows the dynamic Weekly cycles.


----------



## Frank D

*S&P Weekly cycles*

Expectation is that the trend will complete the *break and extend *pattern from
1278 to 1335.

This is helped by the patterns in the Weekly and Daily cycles on Monday.

Resistance @ 1314 resides for 1 more day, when resistance disappears from
 Wednesday onwards

However, be aware of weakness on Tuesday if it's being push down from the
 daily 50% level, as described in the book


----------



## Frank D

*S&P Weekly and Daily cycles*

January resistance has disspeared...

Trend bias is to complete the break and extend pattern @ 1334, helped by the
 patterns in the Weekly cycle, and today's daily cycle

2-month wave pattern could see the S&P 500 continue as high as the February
 highs @ 1252

However, once the market hits 1334, and if price moves back within the 'dynamic' Weekly cycles (white)....

Then I would look for a rotation down towards the monthly 50% levels (MARCH)
 during this current Quarterly cycle.


----------



## Frank D

*S&P Weekly Cycles*

S&P completing the 2-month wave pattern into February's highs @ 1352 
from the December 50% level.

These Monthly highs are seen as resistance, and I'll begin to look for potential 
patterns that could result in the market rotating down towards trailing 
monthly 50% levels in March.

the first sign that a 1st quarter 'top' is in place is if the market is trading
 inside next week's levels:- 1340


----------



## Frank D

*S&P Weekly cycles*

2-month wave pattern complete at the February highs (resistance) 1352

my view is that it will try and unwind down towards the Weekly lows over 
the next few weeks


----------



## Frank D

*S&P 500 Weekly cycles*

*Principles:- *Whenever the market reverses down after a 2-month upward 
trend (January & February), but then reverses down to test trailing Support 
(Weekly lows)...

the trend will often continue to move up towards the monthly highs, and then
 proceed to new highs in the 2nd Quarter (April). This is what I call a text book
 pattern. (Principle)

*Next Week:- *trend guide is once again the Weekly level @ 1374.50

Random resistance @ 1384, but with the possibility that in the last week of the 
month the trend continues to move higher.

Anything below 1374.50, as part of a Friday' 5-day high resistance, is
 seen as a 2-day reversal pattern to start the week...

and then from Wednesday onwards, using the daily cycle patterns, we look to 
see whether the trend will push up towards 1384 by Friday next week.


----------



## Frank D

*S&P Weekly Cycles*

My view was that the S&P would come back and retest last week's 
breakout @ 1382-85 after reaching the March highs @ 1402


And as part of the price action from the Weekly lows @ 1338.50, my view is that
 the trend will continue up towards the April highs over the new couple of weeks.


So far everything has played out precisely using 'text-book patterns, and if
 that continues the expectation of the trend continuing higher will be determined
 by next week''s level @ 1395 towards the Weekly highs @ 1415 & beyond

*therefore 1395 will define whether my view will play out....*

or not, and the market rotates down over the next 5-days (lower Friday close)


----------



## Frank D

*AUD/USD Monthly & Weekly Cycles*

https://www.aussiestockforums.com/forums/showthread.php?t=3117&p=693984&viewfull=1#post693984

A continuation of the above Thread...

AUD has consolidated above long term support (2nd Quarterly 50% levels), with 
the expectation that it's trying to move as high as 1.12 during this primary cycle.

Target will be this Week's 50% level.

*Next week's 50% level will define whether there are more upward gains.*

High Risk if AUD drops below Support levels


----------



## Frank D

*AUD Monthly and Weekly cycles *

Monthly cycles continue to support the AUD, but the pattern that I was looking
 for was this Week's 50% level providing the next thrust pattern upwards...

resulting in the last week of the current month rising, and then continuing
 higher in MAY, as part of the overall Monthly and Primary cycles

That didn't happen on Monday, and current price action in the short-term looks 
weak. (below the Weekly 50% level & moving lower after a 'no-control' weekly bar)

What would look bullish again would be a *formation of a Weekly HOOK pattern*.

That is when price moves down into Tuesday's 5-day lows, forms support, and
 the day closes back above the daily & weekly 50% levels.  *Weekly HOOK*

When that happens, the rest of the current week normally continues to trend
 towards higher highs by Friday.

otherwise a break of monthly support & 5-day low breakout on Tuesday, and the entire long term 
pattern of rising towards 1.12 is probably over


----------



## Frank D

Frank D said:


> *AUD Monthly and Weekly cycles *
> 
> What would look bullish again would be a *formation of a Weekly HOOK pattern*.
> 
> That is when price moves down into Tuesday's 5-day lows, forms support, and
> the day closes back above the daily & weekly 50% levels.  *Weekly HOOK*
> 
> When that happens, the rest of the current week normally continues to trend
> towards higher highs by Friday.




*AUD Weekly and Daily cycles*

We nearly have the makings of a *Weekly HOOK pattern*, we just don't have 
the confirming close above the daily 50% levels and Weekly 50% level.....

Therefore I can't be as bullish  (higher highs by Friday and then Monday next 
week) without that close.

However, the daily 50% level (@11am) will now be the trend guide for 
Wednesday, and that continuation upwards might still happen


----------



## Trembling Hand

Frank D said:


> *AUD Weekly and Daily cycles*
> 
> We nearly have the makings of a *Weekly HOOK pattern*, we just don't have
> the confirming close above the daily 50% levels and Weekly 50% level.....
> 
> Therefore I can't be as bullish  (higher highs by Friday and then Monday next
> week) without that close.
> 
> However, the daily 50% level (@11am) will now be the trend guide for
> Wednesday, and that continuation upwards might still happen




Nearly there Frank. In fact the AUD looks to be the only one that hasn't made the weekly hook pattern. EURO, ES, DAX, CL and our SPI will today you would think yet the little ol' Aussie is lagging a bit.


----------



## Frank D

*SPI Monthly & Weekly cycles (Autralian Stock Market)*

As mentioned in last week's report, there is an expectation that for the trend
 to continue higher it needs to revisit support during the current Quarter.

That Support resides around 4252/54.

So if you want to get back into the current trend, then that's the area of interest.

However, as a footnote I also mentioned the possibility that if it breaks Support it
 will continue down into the 2nd Quarterly 50% level (Yellow), which has always
 been my overall support zone.

Because what we notice using past history to define probable future moves is....

the break of support often occur during the month of MAY, extend down into
 lower lows (JUNE/JULY) and then find support.

*Therefore 4252/54 can and may continue to follow the same patterns for the
 past 3 Quarters and support the trend.*

or it's going to follow a similar pattern as past years and break support 
and extend lower


----------



## Frank D

Frank D said:


> *SPI Monthly & Weekly cycles (Autralian Stock Market)*
> 
> As a footnote I also mentioned the possibility that if it breaks Support it
> will continue down into the 2nd Quarterly 50% level (Yellow), which has always
> been my overall support zone.
> 
> Because what we notice using past history to define probable future moves is....
> 
> the break of support often occur during the month of MAY, extend down into
> lower lows (JUNE/JULY) and then find support.





SPI is now Down into the 2nd Quarterly Support zones & MAY lows (4143/64)

My view is that the SPI will find Support around these levels and begin to Rise up
 and move back towards the 4231-54 over the coming days, and then stall until
 the end of the month (June).

That's going to be helped by the S&P 500 finding support at its MAY lows 
@ 1315.50 tonight.

However, everything doesn't always go to plan, and that's because the 
S&P 500 could be searching for its own 2nd Quarterly 50% level @ 1249, which
 is much lower, dragging the SPI lower before it swings upwards into June


----------



## Frank D

*S&P 500 Monthly & Weekly cycles*

As mentioned in last weekend's Report....http://usindexweekly.blogspot.com.au/

_"My view is that the S&P will once again begin next week with a 2-day reversal 
pattern (unless it opens above 1460)...and if that 2nd day closes 
below the Weekly 50% level (random Support), the rest of the week 
could be moving in the same direction" (DOWN)_ 

We now have the 2-day reversal closing below the Weekly 50% level...

Therefore, the rest of this week is going to follow with continued weakness
 (as it remains below 1445), and retests 1425...

*or not*


----------



## Frank D

*CBA:- Primary & Monthly Trends*

CBA continues to exhibit a bullish trend as the price is dictated by the higher timeframe 50% levels
 as trailing support zones.

As described in my lastest book, "bearish patterns in Bull trends" CBA is now showing a pattern that 
can often see the stock reverse its current course. That pattern is the higher step formation 
within the monthly cycles and subsquent 1st week rise and higher close (Friday)

Most observers would naturally think CBA should continue to trend higher, *and it can certainly can*, but 
if next week closes back below the October 50% level (Daily close) CBA should reverse down into Support as 
the first Target (3 to 6 weeks counter-trend move)


----------



## Frank D

*The SPI Monthly Cycles*

As noted 2 weeks ago (Weekly Report), if the November 50% levels can't hold because of the 
price action in US markets, then the Aussie Market is heading down into 4341.

When we look back over the past number of Quarters, we can see that the *SUPPORT* in 
each 3-month cycle coincides with this same level (RED)...

The only time it didn't was back in MAY this year, 6 months ago, but it did support it for 5-days, &
then followed a break-n-extend pattern into the following Quarterly lows.

*Therefore 4341 is seen as SUPPORT during this Quarterly cycle*, otherwise it will follow a similar 
break-n-extend pattern into the 1st Quarter of 2013


----------



## Frank D

*SPI Monthly Cycles*

4th Quarter support @ 4341, with an upside Secondary target @ 4572/93

Primary target 4752 for 2012


----------



## Frank D

*SPI Primary & Monthly cycles*

Monthly cycles completing the move into the December highs after finding 4th Quarter Support.

Primary cycles suggest the trend is continuing towards 4752 by January, if not sooner


----------



## Frank D

*SPI Primary & Monthly cycles*

Primary cycles:- Target 2013 Yearly highs @ 4772 – 4849

Long term Support in 2013 @ 4408-4429

Monthly cycles:-  target January highs from 4th Quarter support @ 4340

Trailing 1st Quarter support @ 4510 (note:- all levels not confirmed until the close of this week’s trading)


----------



## Frank D

*DOW, S&P 500, SPI Futures Monthly cycles*

All futures markets have reached their January & 1st Quarterly highs on Thursday.

My view is that after a 3+ week trending period, markets as of next week (or even tonight)
will begin retesting the trailling 5-day lows to begin the new month of February.

Basically January's highs are resistance zones, that can last for the next 5-days.

January's highs:- DOW 13800, S&P 1496, SPI 4792


----------



## Plan B

Long holiday Frank?? Good on you!

Just in case you missed it, Thanks for posting these! Much appreciated.


----------



## Frank D

*S&P 500 Weekly Cycles (E-mini Futures)*

*There are two larger cycles in Play.... #A) February high resistance & finds support at the Weekly lows and then continues up into the March Highs:- forward month. 

#B Continues down towards the January high breakout @1474  * 

The Market completed the break & extend pattern from January's highs in a precise top in February @ 1530.

It has now reversed into the Weekly lows, and at this stage we are treating the trend as #A.

Any further weakness with a break of the Weekly lows will retest the January breakout @ 1474 and then quickly resume its upward trend.


----------



## Frank D

*S&P Monthly & Weekly Cycles…*

S&P continues to remain in an upward trend:- Target March highs.

We saw a break of the Weekly lows earlier this week, but it didn’t precisely hit my downward
 target of 1474, but as we can see, it has quickly resumed its upward trend.

What we also notice is that the current price action struggles to break the random Resistance zone
 around 1520.

Therefore there is still the possibility that there’s downward pressure early next week towards 1474, 
which is now matched with the MARCH 50% level.

*1474 is seen as Support*


----------



## Frank D

*SPI Monthly & Weekly Cycles*

As illustrated in previous Weekly reports, the Monthly support levels (RED) often provide a robust 
entry level during current Quarterly cycle & up into new highs in forward Quarterly
 highs:- 3-6 month trend 

*Current Support resides around 4864 * 

A break of the same Monthly Support level will put pressure on the trend to drop further, until the 
same pattern appears into the forward Quarterly cycle providing the next long-term entry level. 

*Full report in Weekend Report *


----------



## Frank D

_"As illustrated in previous Weekly reports, the Monthly support levels (RED) often provide a robust entry level during current Quarterly cycle & up into new highs in forward Quarterly highs:- 3-6 month trend:- Current Support resides around 4904

 A break of the same Monthly Support level will put pressure on the trend to drop further, until the same pattern appears into the forward Quarterly cycle providing the next long-term entry level:- that long term entry level is @ 4673"
_

*SPI Primary & Monthly cycles*

Whilst the trend is above the Yearly highs @ 4853, there's an expectation that the upward trend will continue for the next 2 years, as it follows the Dilernia Principle:- Break & extend pattern towards the 2014 Yearly highs.

We can now see that the Current Support level in the 2nd Quarter has held (RED), and if the trend is going to continue higher, then traders will know that a *breakout of the 5-day highs next week* will help validate that pattern.

However, a break of the 5-day lows next week ( SUPPORT), and often the trend will move in the opposite direction:- towards 4678

At this stage we should be looking for the Primary trend to continue higher.


----------



## Frank D

*GOLD Primary cycles*

GOLD has broken it's 2013 lows (breakout) and has moved down into long term BUY zones, 
within the Primary cycles...@ 1337.73

Expectation is that of a swing back up towards those same breakout lows @ $1527, which is 
seen as resistance.

Note:- as mentioned in the Weekly Report, this bear trend can last for 2 years, if this BUY zone
 can't hold, then don't touch gold until much lower prices in 2014.


----------



## Frank D

_Whilst the trend is above the Yearly highs @ 4853, there's an expectation that the upward trend will continue for the next 2 years, as it follows the *Dilernia Principle:- Break & extend pattern* towards the 2014 Yearly highs.

We can now see that the Current Support level in the 2nd Quarter has held (RED) @ 4904_

*SPI Primary & Monthly cycles*

2nd Quarterly support pattern and above the 2013 highs, providing the means for 
the Australian market to remain stable in its upward trend.


----------



## Frank D

*GOLD PRIMARY & WEEKLY CYCLES*

GOLD has continued to move up from the BUY zones towards the 2013 yearly breakout....

trend guide 1439.50

*resistance 1527/1547*


----------



## Frank D

*SPI Primary & Monthly cycles*

I've been away on holidays for 4 weeks, so those that read my Weekly posts, I've updated it.

http://austindex.blogspot.com.au/2013/05/spi-futures-australian-stock-market.html


_If it does continue higher the next 5-days, and then into new highs the week after next, then it's time to look to profit taking, and then look for the same BUY zone in the 3rd Quarter. (27th April 2013)_

That was my last report 4 weeks ago, and we are now moving down into the BUY zone @ 4899 (4886/4905), after completing the highs in MAY, where profit taking should have done along with the 100% highs of the Primary cycles in 2013

Keep in mind that the primary trend remains bullish whilst above these  BUY levels.

We all know that the month of MAY is often the time when markets hit highs and reverse down, so it's a no  brainer...

The question is now whether Primary cycles hold Support?

Short-term there is resistance around 5065

& if those Primary support levels don't hold, then I already know where the next BUY zone is, using monthly 
cycle break-n-extend patterns, and hopefully so should you


----------



## Frank D

SPI Primary & Weekly cycles

The weekly close below 4898 confirmed further weakness down into the 2nd Quarterly BUY zone @ 4600

We can see 4600 has attracted Buyers, and now the trend will be defined by the 3rd Quarterly 50% level 4796.

Either the trend makes its way down towards the Yearly 50% level....

or it's going to push up towards the 2013 yearly highs. If it pushes upwards, there is major resistance
around 4945 during July.

Note:- there are breakout patterns (DOWN) in the monthly cycles, therefore if it moves up into 4945, my view
 is that it will move back down to align with the 'future' monthly LOW BUY zone, (RED) as illustrated in my book


----------



## Frank D

*SPI Primary & Weekly cycles*


As noted in my previous Weekly Report on the 14th July, http://austindex.blogspot.com.au
the Primary cycles has seen price close above 5069 on a Friday,swinging the cycle around to a BUY.

The previous BUY zone at 4796, has now been replace with 4921, which is seen as support
for a continuation of the Primary cycles towards new highs in 2014.

*Note:*- Monthly cycles suggests the trend can continue up into August at 5153 before it 
reverses back down into 4921.


----------



## Frank D

*Australian Stock Market (SPI Futures) Primary cycles & Monthly cycles*

Primary cycles suggest the trend will continue higher into the 2014 Yearly highs, as part of the 
*Dilernia Principle "break & extend pattern.*

We can now see Future Support move upwards in September, and if the trend is going to continue higher, 
then I would expect a drift downward into this level and then push upwards over the next 3-6 months.

I could be wrong, but *SUPPORT resides around 4921-54*


----------



## Frank D

*SPI Primary & Monthly cycles*

Primary Cycles suggests the trend will continue higher towards the 2014 highs, but it didn't follow the orderly
 pattern I was looking for; a move down into September support @ 4937 and then a move upwards for the next 
3-6 months.

The Trailing support has moved upwards, as shown in October @ 5128

The Trend should remain stable, as those Support zones hold, but long term support is 5006, if US markets move slightly lower towards the 4th Quarter BUY zone (READ US Report)


----------



## Frank D

Frank D said:


> *SPI Primary & Monthly cycles*
> 
> Primary Cycles suggests the trend will continue higher towards the 2014 highs,
> 
> The Trailing support has moved upwards, as shown in October @ 5128




Future support @ 5128 came into play in early October, as part of the Primary cycle trend towards the
 2014 Yearly highs.

The short-term cycle will complete around the November highs, as this is part of the 2-month trending
 pattern within this Quarterly cycle, as described in my books.


----------



## Frank D

*SPI Primary & Monthly Cycles*

The Aussie Market didn't hit the November highs, unlike the US markets, and we can see that the December support has failed to hold, as part of a Primary trend towards the the 2014 highs.

I still believe that the market will continue towards those Primary cycle highs, however the Monthly cycles 
suggest the trend will continue to follow a 2-month wave pattern downward into 1st Quarter support.

If the trend does continue higher, then this BUY zone in the next Quarter is probably the best level to be
 moving back into the market


----------



## Frank D

*SPI Primary & Monthly cycles*

Primary Cycle suggests the trend will continue to move up towards the 2014 cycles highs 
(Read US S&P 500 report)

BUY zone in the 4th Quarter @ 4960, didn't reach, but the BUY zone in the first quarter remains @ 5066 if
 there is any short-term resistance.

*Note:- there is a breakout in December (December 50% level matched with red channel),
this can act as resistance (along with 5338) for the rest of Decembe*r.

A close above 5338 by the 31st of December, as occurred at the end of July, will help validate that 
Primary Cycle



*Monthly Reports for the end of December & the Primary Cycles for 2013 have been updated..*..

US (S&P Report)
SPI Futures
GOLD & Silver
FOREX  AUD/USD

*Merry Christmas to all and Happy trading in 2014*


----------



## Frank D

_*The BUY zone in the first quarter remains @ 5066 if there is any short-term resistance around 533*8 (previous report)
_


*SPI Primary Cycle and Monthly Cycles*

The Market has moved down into 1st Quarter support @ 5066, after following the December break and extend pattern from 5338 (resistance) in the 4th Quarter & into 1st Quarter Support.

As noted in previous reports last year, the Primary cycles suggests the trend can extend up towards the 2014 highs,  however that view needs to be validated with the current price action, starting with a  breakout of the 5-day highs, f*ollowed by a 3-week high breakout @ 5122 sometime in 'March', end of the first Quarter.* 

Simply because, the current trend in this Quarter & now being *below the 2014 yearly 50% level @ 5122*, doesn't bode well for a Primary break & extend pattern towards the 2014 highs.


----------



## Frank D

*SPI Primary and Monthly cycles*

_The Market has moved down into 1st Quarter support @ 5067, after following the December break and extend pattern from 5338 (resistance) in the 4th Quarter & into 1st Quarter Support. (BUY ZONE)

As noted in previous reports last year, the Primary cycles suggests the trend can extend up towards the 2014 highs,  however that view needs to be validated with the current price
action, starting with a  breakout of the 5-day highs..._*Previous Monthly report*

Trend bias is to complete the move towards the 2014 Primary highs @ 5574, as part of the Primary cycle
Break & Extend pattern from the 2013 highs. 

BUY Support @ 5067 was validated with the 5-day high breakout that aligned with 5122 (Yearly 50% level)

The Trend should continue higher & follow the move towards the March highs :- Random resistance @ 5537...

Trailing support March 50% level.


----------



## Frank D

*SPI Primary & Monthly cycles*

Trend bias is to complete the Primary cycles based on the *Dilernia Principle of Break & Extend* towards the 2014 highs

As we can see, the change in cycle saw support come into the market @ 5266, whilst within the Monthly 
cycles there is another  that suggests the minimum move will be towards the April 
highs. (March 50% level Support)

My view remains, off load Margin long positions around those Yearly highs, whilst keeping an eye on the 
same patterns in US futures markets (Read US report)

http://www.usindexweekly.blogspot.com.au/2014/04/s-and-dow-futures-7th-april-2014.html


----------



## Frank D

*Australia Stock Market :- Primary & Secondary Cycles*

The Market has played out as expected, completing the Primary Cycles towards the 2014 highs, and 
hopefully traders took my recommendation to exit Long Margin Positions around those upper levels.

When we look at the shorter cycles within the Weekly timeframe, we can see a similar break and extend 
pattern on the downside, from the September lows & now into the October lows. This medium term 
support coincides with the 2014 Yearly 50% level.

At this stage in the game, the secondary cycles are likely to form resistance around 5399 (SELL ZONE), and
 with just over 2-months to go until the end of this Primary cycle, it’s way too early to have a
 long term view of the overall market Trend.

My view is that the Market could consolidate within a narrow band of the Sell Zone, and short-term Support 
until the next Primary cycle begins in 2015.


----------



## Frank D

*SPI Primary & Secondary Cycles*

My view of 5399 stalling the market (Sell Zone) failed with last Friday's close above that level.

Two important patterns have occurred since the market reaching the 2014 Primary highs..

1:- Reversal down into the 2014 50% level and October lows:- Support
2:- Last week's close above 5399.

This suggests the overall Primary Trend remains bullish, along with 5399 now being a random support zone, and  that the trend will likely continue up towards the 2015 highs.

The most robust pattern of the trend continuing higher is for the Trailing support (currently 5139) rising upwards and forming a *higher Support zone in December*, providing the next thrust pattern.


----------



## Lemmywincks

As someone who is currently reading your works, I really do appreciate these posts of yours. Keep up the good work.


----------



## Frank D

*Australian Stock Market SPI Futures
*

As we can see the Primary and Secondary cycles are driving the market lower after reaching the 2014 highs (Exit Zone)

 There is current support around 2014 50% level, but the secondary Sell zone in the 4 Quarter @ 5399 has stalled the market, now followed by a December break:- Trailing Support.

As we know from previous examples in the Primary cycles:  below the 2015 50% level and the Primary cycles suggest further weakness in 2015, and potentially a 2-wave cycle that trends lower into 2016.


AUD/USD Report also updated

http://forexspread.blogspot.com.au/


----------



## Frank D

*SPI Primary cycles*


It's been a while since I've posted on here, but if you've been following my reports, once above 
the 2015 50% level on the back of S&P 500 strength, the Aussie Market reached a critical high once it hit 6005 (SPI futures 6011).

*Current Report....
*

*As noted in the previous report, it was time to get out of the market once the SPI hit 6005 (overnight 6011).*

_The next term long is around the BUY zone, which is currently 5482.

The current price action is very similar to the high reached in MAY 2013 and reversal down into the BUY zone.

However, the only difference between the two patterns is that the price action in 2013 was occurring within a break & extend pattern in the Quarterly cycles, whereas this current high is still part of the current Quarterly breakout @ 5691.

Therefore there is still the potential that the market has another go at a higher high in the 2nd Quarter as part of the extend pattern, and that will depend on the price action in US markets (S&P 500 Report)

But for me, I'd rather sit on the sidelines and wait for the pullback
_

http://austindex.blogspot.com.au/


----------



## Frank D

*S&P 500 E-mini Futures*

Is there more upside in the S&P 500?

The current price action in the Primary cycles suggests that the trend should continue higher, as part of the 2014 yearly breakout and extend towards the 2015 highs.

As we can see in the chart, the trailing support (Yellow) provides the ideal zone to enter the market, and if the trend is going to continue higher then the APRIL level becomes the zone to keep an eye on.

That level will be confirmed after this week completes and we move on the other side of Easter.

Therefore if there's continued weakness this week, then 2009 is the BUY zone, and then April comes into play next week.


----------



## Frank D

*AUD/USD Froex Report*

As noted in the previous report, the trend bias was to continue lower in 2015, and the AUD hit Support right on the button completing break and extend pattern in the Primary Cycles.

Until it's trading above the 2nd Quarter 50% level (.7849 confirmed after this week), it is too early to tell 
whether the AUD is going to rise upwards for the next 3-6 months :- 1st Target .8200

If long the AUD there should be a good guide after Easter using the Secondary Cycles (April 50% level)

What's going to hold the AUD back is that the Trend bias in GOLD is to continue lower. 
(READ GOLD Report)


----------



## Frank D

*S&P 500 Primary Cycles *

_The current price action in the Primary cycles suggests that the trend should continue higher, as part of the 2014 yearly breakout and extend towards the 2015 highs.

if the trend is going to continue higher then the APRIL level becomes the zone to keep an eye on._* Previous Post.*


As we can see the April support level @2039 has pushed the S&P 500 higher, as part of the Primary cycle breakout in 2014 towards the 2015 highs.

If long I'd unload positions around the first 2015 highs @2133 (too early to short at that level:- random resistance 14 points) without confirming patterns (5-day low breakout) 

*Major resistance in 2015 on S&P @ 2178*


----------



## Frank D

*S&P 500*

As we’ve seen the S&P has completed the move into 2133 and stalled 14 points.

As noted in the previous report, unless there’s a breakout of the 5-day lows, it is too early to tell whether the trend will reverse and continue lower (now a tight 5-day range)

Above 2133, and it’s following the secondary timeframes towards the June highs (Random resistance 14 points) & as high 2175 (Robust resistance)


*AUD/USD Forex Report
*
2015 Primary Cycles suggests there is Major Support around these levels, and we’ve seen the AUD rise up from this support & stall around the MAY highs. 

Support now resides around 78 cents:- Monthly 50% level and 2015 Lows.

Based on Commodity prices and their own Primary Cycles, there is still a bias to move lower in 2015, how this effects the AUD for the rest of the year will simply be defined by trading either side of .78cents


----------



## Frank D

*S&P 500 *

As mentioned in the previous post, keep an eye on the breakout of the 5-day lows. (circled)

Current price action should see a 2-month wave pattern towards the July lows, as the market zig-zags  downard within the Weekly cycles (Green)

*AUD/USD*

Further weakness in Commodity prices, as noted in the previous Report, has seen .78 cents form resistance.

Random Support July lows .7398


----------



## Frank D

*GOLD Primary Cycles*

Gold has finally completed the break & extend pattern in the Primary cycles from the 2013 breakout down
 into the 2015 lows.

This is a MAJOR Buy zone in the Primary Cycle, however in the smaller cycles there are currently minor
 break and extend patterns playing out at the same time that can see more downside.

Short-term:- we would need to see Gold close back above  1106 on a Friday, and then use the same level 
the following week as support.

Any further weakness in GOLD as it follow the short-term cycles could see GOLD push as low as 975.40

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

*AUD Primary & Weekly cycles*

Commodity prices dropping (READ GOLD Report) dragging the AUD dollar lower.

Even though the AUD is hovering around the July lows, it's actually trading below those lows @.7485 forming
 a resistance zone, and most likely follow the weekly cycles towards the Weekly lows, and as low as .7091

For short-term trading I would use each of the levels as Support & Resistance.

Resistance:- .7567


----------



## Frank D

*AUD/USD Primary & Weekly Cycles*

As Noted in the Previous report, the price action is down into MAJOR Support level in August 
and 100% of the Primary range.

*Therefore around .7091-71 is a level that good enough to GO LONG from.*..

However, there is a major resistance zone:- August 50% level 75.65  and previous Primary support earlier in
 the year.  This resistance zone could end up stalling the AUD for the rest of 2015.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*S&P 500 Primary Cycles*

The S&P didn't move as low as the July lows, but formed support in the 2nd half of the month above 2058. (Yellow)

As noted in the previous report, the August level at 2085 (Yellow) will now define whether the trend makes 
move back towards the highs @2133) and more...


----------



## Frank D

*GOLD Report*

As noted in the previous report, we needed to see a Friday close above 1106 to get buyers interested in Gold once again, and as we can see that's how it's played out precisely. 

This completes the break and extend pattern from the 2013 lows into the 2015

Short-term target is 1190, and as high as 1214 in September. Keep an eye on 4th Quarter patterns from October to see if this reversal in the Primary Cycles has more legs into the end of the year

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*Australian Stock Market. SPI Futures*

As noted in the Previous Report, I still wanted to see some downside in index markets, as they hadn't
 followed the 'TEXT-BOOK' support patterns into the July lows.

We can see the Market sell-off began with the breakout of the Weekly lows @ 5474, and is now likely to 
move down into this week's lows @4969, and ideal zone to be looking for a short-term swing pattern.

We are also testing the 3rd Quarter lows.

However we have to acknowledge the SPI is now officially in a bear trend, and bear markets often follow 
trends lower into 2016. (2-pattern extension into the following yearly lows)

Therefore any short-term support  (READ S&P 500 report) and we must treat the 2015 50% as resistance for
 the rest of this year.


----------



## Frank D

*SPI Futures Primary Cycles*

_We also have to acknowledge the SPI is now officially in a bear trend, and bear markets often follow trends lower into 2016. (2-pattern extension into the following yearly lows) Therefore any short-term support must treat the 2015 50% as resistance for the rest of the year. (previous Report)_

 The Australian Market has continued its dramatic sell-off extending its low towards the 100% level of theYearly Timeframe @ 4750

 As noted in the previous report, the BEAR-Market pattern often extends towards the 2016 lows, If we use historical patterns clearly described in my *book :- Market Trading Market Time*, then we should see some consolidation around the current 2015 lows, but then further weakness from the 4th Quarter down into the 1st Quarter lows some time in March 2016

 If that plays out, then I'd look to move back into *Long positions in the Aussie Market 6 months from now, using the 2016 lows as support & entry*

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*GOLD Primary Cycles
*

As noted in the previous two reports 1106 was a BUY zone in Gold, and it continues to support the 
price. However, I'd be concerned that GOLD isn't acting like it's got the legs to continue higher.

The initial bullish pattern some weeks ago once above 1106 should have continued upwards using the 
September 50% level as Support for the next thrust upwards..

Instead it failed, and current support around 1106 normally only lasts for the current Quarter, which ends in a couple of weeks.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

*AUD/USD Primary Cycles*

The Australian dollar completed its move down into .7091 cents

I was expecting more support to come into the Aussie Dollar @ .7091 cents using the Primary Cycles, with a swing upwards into .*7567 (resistance) for the rest of 2015,* but it instead has followed the Weekly cycles from August lows down into the September lows .6936 (random Support)

Based on current patterns coming into the end of the 3rd Quarter and the start of the 4th, there is a resistance level @.7220 & a major resistance @ *.7567, *

*Note*:- Even though the trend remains weak, 5-day high breakouts can provide short-term buying
 opportunities above .7220 (Monday breakout of a Friday 5-day high)


----------



## shouldaindex

There were peaks hit and 20%+ declines finished in the XAO in 1984, 1987, 1992, 1994, 1997 and 2011 that didn't reach new lows the next year.

That's 6 of the last 9 that went against the lower low early next year theory.

Only caveat is SPI may be different, but assume not, but happy to learn new information.


----------



## Frank D

*SPI Futures Australian Stock Market*

My view remains the Aussie Market is drifting towards those 2016 lows, hopefully by March and the end of the 
1st Quarter.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*AUD/USD *

First resistance zone @ .7220 held, and now it's moved down to .*7154 in October.*

As noted in previous report, the AUD is likely to follow the trend down in 2016 towards the lows 
around .66 cents

_*There are two patterns at play....*_

1.  trade resistance during each monthly timeframe with the expectation that it's following the primary
 cycles downward in 2016. (more than likely)

2. Weekly breakout on Monday above the previous 5-day highs & .7154, which forms support the following 
week, and the expectation that the AUD is retesting .7567 (major Resistance SELL ZONE)


----------



## Frank D

*AUSTRALIAN STOCK MARKET- SPI *

We can see the the Primary Cycles and levels having a major influence in the trend and also the major 
turning points in the market. 

From the exact highs at 6005 and the exact lows @ 4750, and now the 2015 50% level forming resistance.

My view is that the stock market is heading lower, but it is likely to find support around the 2015 lows @ 
4990-5065 until the end of the year.

When we look at the Weekly cycles, the trend bias remain robust in the short-term defined by the 
November 50% level and Weekly lows.

Therefore those 2 levels @5213 & 5116 are your short-term random support zones within a larger Primary 
Cycle that's wanting to move lower.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*AUD/USD Forex Report*

_Weekly breakout on Monday above the previous 5-day highs & .7154 , which 
forms support the following week, and the expectation that the AUD is retesting .7567 (major Resistance 
SELL ZONE) *Previous Report*_

As we can see the AUD rose on the back of the 5-day high break the week after, without reaching the 
first resistance zone @7474, instead slipping back and now retesting Support, as pointed out.

This support zone resides @ .7091, but the trend guide as to whether it moves up towards .*7567 begins 
next week from .7155.*

*Note: Primary trend suggest the long term trend guide is to continue lower in 2016.*

Below .7091 and keep an eye on .6894


----------



## Frank D

*Australian Stock Market :- SPI Futures (PRIMARY CYCLES)*


As noted in the previous post, my view was that the stock market was heading lower and likely to find 
support around the 2015 lows @ 4990-5065 until the end of the year. This has currently played out.

 I continue to have the view that the Australian Market will try and move lower in the early part of 2016 until
 it reaches those 2016 lows, however for the rest of the year it could move into a sideways pattern around 
current support.

*Long term bias is down.*

Keep an eye on the 2016 50% level as a trend guide/resistance zone in early 2016


----------



## peter2

Thanks Frank.  I see there is room for a Christmas rally up to the 2015 50% level


----------



## Frank D

*AUSTRALIAN STOCK MARKET*

Support @ 4990 -5065 came into play, and the Australian market is rotating upwards into the 2016 50% level.

US markets remain in a bullish Primary Cycle, whilst the Australian market remains in a bearish 
Primary cycle, as commodity prices continue to fall and likely to push lower in the early part of 2016.

As long as the index is below the 2016 50% I have the view that the Australian market will head lower, but I've also seen on previous occasions that the last day of the year closes right on the new yearly 50% level and the initial move is upwards in January and everything is hunky dory once again.


----------



## Frank D

_"As noted in the previous report, the BEAR-Market pattern often extends towards the 2016 lows, If we use historical patterns clearly described in my book :-* Market Trading Market Time*, then we should see some consolidation around the current 2015 lows, but then further weakness from the 4th Quarter down into the 1st Quarter lows some time in March 2016

If that plays out, then I'd look to move back into Long positions in the Aussie Market 6 months from now, using the 2016 lows as support & entry"  (September 12 Post)_

*SPI Primary Cycles*

As you probably aware I'm bearish on the Aussie Market, and so far the market is consolidating around the 
2015 lows.  

If we follow the pattern as previously described, the Market should be heading down towards 4600. and if it's reaching those lows around March, then it's a good time to rock & roll. 

Note:- Market Trading Market Timing is probably the best T.A book on the market. Merry Christmas.


----------



## Frank D

*Australian Stock Market Primary Cycles*

 Before continuing to read the rest of the report, please scroll down and read the S&P 500 report. 

 TEXT BOOK sell-off in the Aussie market at the start of January, and we now have both the Australian Markets and US markets in synch. These SELLOFFS at the start of 2016 have all the hallmarks of forming a *Double Bottoms around the 2016 Yearly lows.*

* In conclusion:- *I've been calling this downtrend into MARCH lows as the next time to move into LONG positions, which coincide with the 2016 support zone

Those LONG positions can be validated using patterns clearly described in my book. *MARKET TRADING MARKET TIMING*_ 'Time Price Support Resistance'_

 If it's a robust Support zone, then next UP leg should be taking out the February highs in late MARCH early April.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*S&P 500 Primary Cycles*

"There is still a Minor bear pattern that is lagging from the August breakout @ 2027. If we subscribe to the *Dilernia Principle of Break & Extend* pattern, then price trend needs to reach the lagging Monthly support zone, which currently resides around 1921 (blue). (Previous Report)

 This Week's dramatic sell-off wasn't unexpected, based on the *Dilernia Principle of 'Break & Extend'*, which now completes the pattern from the 2015 breakout @2027 - 1921.

 Going forward... we could see some computer generated buying support around 1921 from next week, (validate support using patterns in my book) and see price rise up into the 2016 50% level, which is more than likely going to form resistance for many months.

However, US markets are now officially in a *Dilernia BEAR CYCLE*, and often the trend will follow a 2-period cycle down into the next Primary Support zone @ 1849.

* Indexes around the globe now have all the hallmarks of forming 'double bottoms' around March 2016.*


----------



## Frank D

*Australian Stock Market (SPI Futures)*

_TEXT BOOK sell-off in the Aussie market at the start of January, and we now have both the Australian Markets and US markets in synch. These SELLOFFS at the start of 2016 have all the hallmarks of forming a Double Bottoms around the 2016 Yearly lows._

 Text book *Break & Extend pattern (Dilernia Principle*) from the 3rd Quarter breakout into the 1st Quarter Target of 4751 will complete most likely on Monday Morning.

 Along with similar moves in US markets, there's a good chance the BUYERS will begin to move into the markets next week, but it's WAY too early to be saying a NEW UP trend will occur, as it hasn't follow my TEXT BOOK bottom in MARCH, but a 'double bottom' nevertheless.

However, there's a pattern in the S&P500 (READ US Report) that might stop January rising to quickly. 

There's enough information using 5-day patterns that can validate short-term counter-trend moves. 


*S&P 500  & AUD/USD Reports updated*


----------



## Frank D

*Australian Stock Market (SPI Futures) Primary Cycles*

_Along with similar moves in US markets, there's a good chance the BUYERS will begin to move into the markets next week, but it's WAY too early to be saying a NEW UP trend will occur, as it hasn't follow my TEXT BOOK bottom in MARCH, but it's a 'double bottom' nevertheless' (Previous Report)_

These moves in the *Primary Cycles *are often very predictable. We've seen the expected 2-wave Primary cycle downward *(Dilernia Principle)* at the start of the year and we've seen the double bottom and buyers appearing around the lows.

 However, even though it's playing out as expected, it's not a TEXT book pattern that screams BUY the market, because these lows should be occurring in March.

 Therefore, it's more of a wait and see approach, and trade on the side of the February 50% level. If these are in fact robust double lows, then price will need to consolidate above the FEB 50% and then continue upwards in March using the same dynamic 50% level.


----------



## Frank D

*S&P 500 E-mini Futures Primary & Weekly Cycles*

As noted in the previous report, the February 50% level would define the strength of the bounce in January. (dead cat)

*We have another Break & Extend pattern playing out, with two possible patterns...*

1. support around the 2016 lows for the next 6 weeks until March.

2. follows the break and extend pattern downward into March approx. 1740


----------



## Frank D

*Australian Stock Market SPI Futures *

2016 lows continue to support the market, but we haven't seen price able to move above the February 50% level.

In fact, it's looking like it can make another move downward and test the MARCH LOWS, which has been my view for a while now.

However, the next 5-days in US markets could see the S&P test the 2016 50% level (Read US Report).


----------



## Frank D

*Australian Stock Market -  Dilernia Model*

If you’ve been following my posts for a while now you’d know that I was looking for 2016 Primary Lows as major support and then the month March as the next likely 'thrust' pattern upwards.

It was either going to be the March lows or the March 50% level that was going to provide next the robust LONG set-up after those Primary Lows were reached, and as we can see it was the March 50% level that gave us that probable pattern.

If we subscribe to those same patterns repeating then the Australian Market should continue higher for the rest of the year, using the Weekly lows as support and the April Quarter 50% level and the trend guide:- next stop 5330

I’m confident in this happening, but be aware that everything is not 100%, and the start of April (another 5-days of trading) and a break of the weekly lows can change the rules of the game.


----------



## systematic

Frank D said:


> *Australian Stock Market -  Dilernia Model*
> If we subscribe to those same patterns repeating...




...Should we?


----------



## Frank D

*SPI Futures Aussie Market*

The Australian Market continues to move higher after an early dip at the start of April.

Short-term target is the April high and the 2016 50% level :- Random Resistance.

Note:- the Australia Market remains in a Bear Trend whilst it's below the yearly 50% level, however if we subscribe to the *Dilernia Principles of Primary Trends *we need to look for patterns that suggest the trend will continue upwards into 2017, as part of this year's lows. (Double Bottom)

Those who have read my book will know what I'm talking about.

Whilst the 2016 50% level may or may not stop the trend from rising, the APRIL 50% level is now seen as Support

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*S&P 500 E-mini Futures.*

Target is the 2016 highs @ 2145, but you could see some resistance around 2013 and a retest of the 2016 50% level before it continues higher.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*AUD/USD Forex Report*

For those that are long I would look to take something off around .7828-50

The Primary trend remains strong, which could result in further gains in the AUD for the rest of the year (.8060 - 
.8160)

Taking partial profits around .7828 - 7850 protects you just in case it zag-zags down towards the 3-week lows once again before the next leg up towards the 2016 Yearly highs.


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## Frank D

*Australian Stock Market*

As noted in the previous post, the Australian Stock remains in a bear trend with the MAY highs and 2016 50% level stalling the Australian Market, with the expectation that price is moving back down to retest the 2nd Quarter 50% level @ 5090 

 If the Australian Market is heading higher this level @ 5090 needs to hold in MAY and continuer higher in June.

Keep an eye on the Weekly lows @ 5142, any breakout of these lows and treat the breakout as an *Extend Pattern *into next week's lows.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
*AUD / USD Forex Report*

As noted in the previous post AUD hit the exit zone at .7828-50 and has now moved back down, except the Weekly lows and 2016 50% level didn't hold.

A change in fundamentals as the Reserve Bank Cut interest rates last week has changed the ball game.

Treat the Trend as a* break and extend pattern* towards this week's lows @ .7187. (random support)

Expectation of the AUD going higher has completely changed because of last week's price action on Friday's close and whilst below .7482


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## Frank D

*AUD/USD Primary & Weekly Cycles*

_Treat the Trend as a break and extend pattern towards this week's lows @ .7187. (random support) Previous Repor_t

 As noted in the previous report, the trend had changed because of the failure of the Yearly 50% level to hold and the breakout of the Weekly lows.

Once the Weekly lows had broken, we follow the 'Dilernia Principle of Break and Extend" in this case down into .7187, which has now completed.

The overall trend is to continue down into .7038, however don't be surprised to see a rise and retest of the Weekly 50% level and the MAY 50% level beforehand.

In Conclusion:- Trend Down into .7038 with an each way bet on a short-term bounce from this level @ .7187


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## Frank D

*AUD / USD Primary & Weekly Cycles*

_The overall trend is to continue down into .7038, however don't be surprised to see a rise and retest of the Weekly 50% level and the Monthly 50% level beforehand._

Primary Trend remains bearish, however we have seen the AUD rise up into the Monthly 50% level (June @.7391) which is now the critical level that may provide the resistance for the AUD to continue lower, if you believe this is the case.

However, keep in mind that Monday can push higher, as part of the 5-day break & extend pattern from 
Friday  and push above that level towards .7464

To validate weakness in the AUD, you'll need to keep an eye on price moving up on Monday, Tuesday moving 
down, and then validate Wednesday with the June 50% level as resistance.

*Australian & US market Index reports updated also*


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## Frank D

*SPI Primary and Weekly Cycles*

_if we subscribed to the Primary Cycle 'Dilernia Principle' of continuing higher for the rest of 2017. (Double Bottom Primary Cycle low in the 1st Quarter)

The best pattern would have been the month of MAY moving down into the 2nd Quarter 50% level and then heading higher in June. (Previous Report)_

We have seen the price action place out precisely, with the market moving down into the 2nd Quarter 50% 
level, and then heading higher using the 3rd Quarter 50% level and the next THRUST pattern upwards.

There maybe random resistance around the August highs @ 5616-5633...

But we need to treat this market as a Primary trend that's heading upwards into 2017, using the expectation of 
it following the Principles within my books with short-term pullback along the way.


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## Plan B

Frank, 

I always like reading your posts but on your blog the 1st August SPX chart doesn't come up on screen. 
I'm just assuming it's your end and not mine?

Thanks Frank.


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## Frank D

*SPI - Australian Stock Market *

Expectation that the Australian Market will continue higher into 2017 using the Yearly 50% level and 
October 50% level as support.

If we follow text-book 3-month cycles then the 4rd Quarter points to further gains into the end of the year 
and early next year.


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## Frank D

_*SPI - AUSTRALIAN STOCK MARKET
*_
_*further weakness from the 4th Quarter down into the 1st Quarter lows some time in March2016*If that plays out, *then I'd look to move back into Long positions* in the Aussie Market using the 2016 lows and SUPPORT & ENTRY  (SEPTEMBER 2015)_
_TEXT BOOK sell-off in the Aussie market at the start of January, and we now have both the Australian Markets and US markets in synch. These SELLOFFS at the start of 2016 have all the hallmarks of forming a _*Double Bottoms around the 2016 Yearly lows. (January 9 2016)*

We have seen the Australia Market play out TEXT book patterns within the PRIMARY CYCLE, and with the expectation that the TREND will continue to move towards the 2017 highs in the early part of the year.

*There's 2 patterns at play...*

1. continues to move upwards into the January highs, which would be a good time to off load some positions.

2. First 10 days of the year sell down into the January 50% level and then continues upwards for the next 3-6 months (MAY).

Note:- Even though it might reach the 2017 highs in the early part of January I think there's more upside in the market. It would be wise to wait for *Quarterly 'sell-downs' to get back into the UPTREND.*


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## Frank D

*Australian Stock Market

I still subscribe to the market going higher, but the ideal pullback zone resides around 6000-5591. We can see the market closing around the June 50% level and often I would expect this level to form resistance along with 5834 (Yearly highs) If I'm wrong then it could push as high as the Weekly highs, but there is still the expectation it's going lower before it goes higher. (Previous Report)

 The June highs has formed resistance and my expectation that the Australian stock market is moving into a 2-monthly wave pattern down into 5591 and July lows.

 I would think this level is the ideal time to be getting back into the market with the expectation it is going higher. look for 5-day high breakout to confirm.  (read S&P 500 Report)*


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## Frank D

_*I think there is more in this market for 2017, so we are looking to BUY the dips using the monthly trailing support levels, with a LONG term target in 2017 towards 2573.  (1st April Report)*_

S&P 500 has reached it's target @ 2573, I would begin to off load long positions, especially if long on MARGIN positions.

Sure the market can continue to move higher into the end of 2017 (push up into November highs),
and I do still think that this current trend is just the start of a multi-year stock Market Rally, since 2015  when I called for double bottom lows to occur early in 2016.

Therefore I would still continue to look to BUY the dips in 2018.


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## Frank D

The S&P 500 has completed the Primary Cycle break and Extend pattern from the 2017 highs and into the 2018, as described in my books.

Everything is driven by the Primary cycle. Understand the Primary Cycle and you're well onto you way of doing extremely well in the market.

Now I believe the Stock Market is still in a Primary Bull trend that's going to last a few more years, so we still want to BUY the dips. 

Because a reversal Primary trend from a completion pattern (BREAK & EXTEND) can often go looking for it's 50% level, *and that 50% level is a lot further down @ 2575

Last night it completed that move and I think it will continue higher once again.

however, don't be surprised if it revisits the 50% level @ 2575 (double bottom) but these moves are part of the primary cycles.*


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## Frank D

The US Markets full-filled it's Primary Cycle reversal into Support (Yearly 50% level) - (double Bottom)

I'm still bullish for a couple more years until about 2020/21, so we now begin to validate this reversal by using the Weekly lows as a target and support. (further weakness)

These lows will creep upwards over the next couple of weeks and if the market is going to go higher then we should see less volatility in the later half March and the start of April.

Ideal support zone resides in the Monthly cycles (Yellow), so *April level is what we would like to keep an eye on.*


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## Frank D

TRUMP'S trade wars are putting major pressure on global Primary Stock Market Trends.

However, as noted in the previous Report, This April Monthly Cycle is what we need to see hold this week and then for the market to rise later this week and continue higher the next.

The market remains above the Yearly 50% level.

*Major Support - 2546*


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## InsvestoBoy

Frank D said:


> Everything is driven by the Primary cycle. Understand the Primary Cycle and you're well onto you way of doing extremely well in the market.




Any chance you can explain how the Primary Cycle works or link to a post in this huge thread which does?


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## Frank D

S&P 500 - Emini Futures
_
"I'm still bullish for a couple more years until about 2020/21, so we now begin to validate this reversal by using the Weekly lows as a target and support._
_These lows will creep upwards over the next couple of weeks and if the market is going to go higher then we should see less volatility. Ideal support zone resides in the Monthly cycles (Yellow), _
_The market remains above the Yearly 50% level. Expectation US markets will  continue higher"_


If US markets are going to push higher for the rest of this quarter, instead of the usual weakness most people expect in MAY-June,  then the monthly cycles in Yellow @ 2677 is our support zone.
This also aligns with the Weekly lows & June 50% level @ 2688.
Don't trade longs below 2677


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## Frank D

S&P 500  - Emini Futures

Still Bullish on the markets until 2020-21.

However, if you read the Financial news on Trump's tariffs and also Zero Hedge, you would think the markets are going to collapse. Let's see how things play out....
*SUPPORT
2677*


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## Frank D

*S&P 500 Primary & Weekly cycles*

Still Bullish for a couple more years - Target - 3076

A few minor resistance points in August - @ 2883 & August highs.

Trend remains up in the short-term, as long as it remains above the Weekly lows @ 2804 in August.

*Long term Support @ 2743 (monthly levels)*


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## Frank D

*Obama v Trump – Stock Market analysis*

·        Obama is elected and market drops 27%
·        Takes 9 months to get back to the level when Obama was first elected
·        Takes 5 years to get back to Bush’s highs
·        Obama’s market is 33% from when it takes out the old highs and to when     trump is elected.

·        Trump is elected and market rallies
·        First 9 months and it has risen 16%
·        First 20 months and it has risen 35%

And there’s still more upside to go…


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## minwa

Frank D said:


> *Obama v Trump – Stock Market analysis*
> 
> ·        Obama is elected and market drops 27%
> ·        Takes 9 months to get back to the level when Obama was first elected
> ·        Takes 5 years to get back to Bush’s highs
> ·        Obama’s market is 33% from when it takes out the old highs and to when     trump is elected.
> 
> ·        Trump is elected and market rallies
> ·        First 9 months and it has risen 16%
> ·        First 20 months and it has risen 35%
> 
> And there’s still more upside to go…




The market was already dropping before Obama is elected same as Trump already had a bullish market before election. Don't see the value in comparing this outright when they happened in different stages of the market cycle. Not like Obama or Trump election turned around an already strong trend.


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## CanOz

Thanks minwa for adding some context....don't be an idiot frank and ruin your analysis with political bias...something more relevant might be the fed cycle.


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## Frank D

Since I haven't dabbled in *Cyrpto's* yet, it's now time to begin applying some of Dilernia Methodologies and see where the levels of interest are using Dynamic support levels and also Primary cycles.

The first interest level for BITCOIN is around 4585 
but *preferably 3858*

However, when we apply the rules around Primary Cycles, this is the first year of a Bear trend that often continues lower into the 2nd year - 2 wave cycles.

Therefore, looking to dabble 3858 is a level, which may or may not provide the support within the Primary Cycles, otherthan a dead cat bounce.

*I like these levels, but I also know there could be further weakness in the 1st Quarter in 2019  for a better long term entry*


*ETHEREUM* analysis found on *thetradertrading *


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## Frank D

Updated Crypto's with 5 BUYS

http://bitcoin-trends.blogspot.com/


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## Frank D

*S&P 500 *

I still continue to be Bullish, and if I'm correct it should find support around the 2018 50% level, the November lows (next Week) and then move up into new highs until 2020.

*However, if I'm wrong and we can see the 2019 50% level is now above price (BEARISH)  the
 S&P 500 will go looking for a 50% retracement towards 2060.*

*A 'Crash', as many are calling will often go looking for a 50%  retracement - 2060 is the target.*


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## InsvestoBoy

InsvestoBoy said:


> Any chance you can explain how the Primary Cycle works or link to a post in this huge thread which does?




Earlier in 2018, I decided to punt the $130 or whatever bucks it cost last year to buy Franks latest book, just to see what was the merit in the Primary Cycle.

So here is the big secret:

The Primary Cycle is nothing more than the yearly pivot line. i.e. the 2019 Primary Cycle line is 2018s (H+L+C)/3.

The Primary Support and Resistance lines are simply half the yearly prior range added to or subtracted from the pivot. e.g if the yearly pivot is 100 and the prior year range is 10 then S/R will be at 95/105.

That said, I actually do think the book was worth it. It has a pretty unique way of looking at the markets which, after buying the book, cost me nothing to observe some markets I'm interested in to see how they react to the market structure defined in the book. It does cover a lot more than just the Primary Cycle.

Here are a couple of charts (XJO and XAUAUD) with the 2018 Primary Cycle/Support/Resistance lines and the 2019 lines as well.

I was impressed to see how the market structure Frank talks about in the book was obeyed by these two charts, especially as 2018 progressed and volatility increased.

XJO:


The 2019 numbers by my calculation are:

Primary Cycle: 5809.8
Yearly Support: 5328.15
Yearly Resistance: 6291.45

Given the market has opened the year below the Primary Cycle and most recently broke Yearly Support, based on the description in Franks book, I believe the expectation is that a "break and extend" pattern is in effect and continuation of downtrend is likely. Price might make it's way up to test the Primary Cycle before continuing lower.

XAUAUD (ICE)



Primary Cycle: 1748.66
Yearly Support: 1640
Yearly Resistance: 1857.32

This market opened the year above the Primary Cycle and quite strongly broke last years Yearly Resistance. I believe the expectation is for another "break and extend" pattern is in effect and uptrend is likely. However given the price has already tested and strongly rejected at Yearly Resistance, it's likely the market will make it's way back to the Primary Cycle line before continuing higher.

Anyway, I don't really use the methods described in the book to manage my money but I do watch these charts now, and thought I'd share the Yearly ones for ASF members who might be interested.


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## fiftyeight

InsvestoBoy said:


> Anyway, I don't really use the methods described in the book to manage my money but I do watch these charts now, and thought I'd share the Yearly ones for ASF members who might be interested.




This touches on something I have been pondering, I have heard a few people say something similar about not using charts, or a particular chart, but they do keep an eye on them.

Care to elaborate on what you are keeping an eye on if not using them while also having a systematic approach?


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## InsvestoBoy

fiftyeight said:


> This touches on something I have been pondering, I have heard a few people say something similar about not using charts, or a particular chart, but they do keep an eye on them.
> 
> Care to elaborate on what you are keeping an eye on if not using them while also having a systematic approach?




I just mean, I paid for the book and I already watch the charts of those markets anyway (not as part a system), so I might as well keep a template with those levels on there, out of interest.


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## fiftyeight

InsvestoBoy said:


> I just mean, I paid for the book and I already watch the charts of those markets anyway (not as part a system), so I might as well keep a template with those levels on there, out of interest.




So you watch charts for purely interests sake?


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## InsvestoBoy

fiftyeight said:


> So you watch charts for purely interests sake?




Pretty much, why else would you watch them? If you have a quantitatively defined model, you don't really need the chart unless you want to visualise what the machine is doing?


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## fiftyeight

InsvestoBoy said:


> Pretty much, why else would you watch them? If you have a quantitatively defined model, you don't really need the chart unless you want to visualise what the machine is doing?




Assumed that might be the case, just wanted to make sure there was not missing anything


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## Frank D

*BITCOIN PRIMARY & MONTHLY CYCLES*

Great moves in all the coins during the month of MAY, with BITCOIN completeing the move into the Yearly 50% level @ 8050USD (EXIT)

I'm now on the sidelines on BITCOIN, but holding a number of other COINS that are still lagging behind with the same price action, of rotating into the Yearly 50% level. (read previous reports below)

*HOW DO WE TRADE BITCOIN NOW?*

The expectation is that this BULL CYCLE will continue to new highs until 2020, wth the 1st Target $15012, which may reach this year. (4th Quarter) and then new highs early next year.

BULL CYCLES move in 4 year cycles, therefore, there's still an expectation that the UPSIDE will still continue until 2022, with some suggesting that $51,000 is the target based on previous % moves in BITCOIN throughout it's History.

In the SHORT TERM, if you subscribe to this theory, then we need to be BUYING the DIPS. I'm hoping there will be dips and not a PARABOLIC move to 15012.

Short term Support resides around the JUNE 50% level.

*LONG TERM SUPPORT will always be the 3-month trailing lows during the next 3 years.*


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## Frank D

_In the SHORT TERM, if you subscribe to this theory, then we need to be BUYING the DIPS.
I'm hoping there will be dips and not a PARABOLIC move to 15012.
Short term Support resides around the JUNE 50% level. (Previous Post)_


We've seen the Yearly 50% level resist price at $8050, retested the JUNE 50% level, found support and moved back above the Yearly 50% level. That price action was the perfect set-up to get back into the trend.
There's still a bit of risk that it might stall around these June highs @ 9600-9900 and move back below the Yearly 50% level, but there's enough risk reward for a move toward $15,000 in 2019 and much higher in the coming years.

There are a lot of other coins that are lagging in Price action compared to BITCOIN, but at long as BITCOIN goes higher, holding other coins is a no-brainer.

NOTE:- if we subscribe that is going to move higher for the next 4 years, BUY BITCOIN around the 3-month lows and hold, as it will eventually retest it, but you'll only get 1 or 2 chances during this time, but maybe a much higher prices.


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## Frank D

If Cryptos are going to go higher, then this is the the PULLBACK today that we want to see, as we're looking to buy the dips in July.

We need theses support levels to hold, a couple of weeks consolidation and then look for August to move higher. (5-day high pattern breakout)

I think running stops below this week's lows (need to be confirmed), is what we're looking for.


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## Frank D

_*


Frank D said:



			If Cryptos are going to go higher, then this is the PULLBACK today that we want to see, as we're looking to buy the dips in July.
		
Click to expand...


*_


Frank D said:


> *We need theses support levels to hold, a couple of weeks consolidation and then look for August to move higher. (5-day high pattern breakout)*






Support in July Held!

5-day breakout at the start of  August and now looking for this to continue towards $14000 & beyond.

If there's any selling in BITCOIN, then BUY SUPPORT LEVELS in August are shown in the chart.

I would like this to keep going higher, but it won't surprise me to see a retest of the BUY zone.


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## Frank D

*S&P 500*

Since the 2016 lows, I've been saying Up &amp; Up &amp; Up until the 2020 Highs to complete the 4 year cycle.  Once it reach those highs, I said SELL and get out!

In 2018 we had similar price action - 2018 highs, back into the 2018 50% level and then more upside, because the trend expectation was for more gains into 2020, as part of the 4 year Cycle.

Even though the 2020 50% is currently supporting the market now, I don't think it's the same as 2018.

It might support it for a number of weeks, but I think we are looking for more weakness in the 2nd half of the year and into 2021 lows.

If we look at the Weekly Cycles, there's a break and extend patterns that could see price move down into the March and weekly lows @ 2743-2761 - AND AS LOW AS @2617

However, the 2020 50% level at 2976 might not allow that to happen, just yet

Resistance the March 50% level and also the 5-day highs


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## Frank D

*If we look at the Weekly Cycles, there's a break and extend patterns that could see price move down into the March and weekly lows @ 2743-2761 And as low as 2617

However, the 2020 50% level at 2976 might not allow that to happen.

Resistance the March 50% level and also the 5-day highs (Previous Report)*


TEXT Book Patterns in the S&P 500...

Support at the 2020 50% level, counter-trend rally into the 5-day highs and then the next push down from the MARCH 50% level towards 2617

There's more weakness to come into 2021.

*Random support 2617,* which could see another counter-trend move back towards the 2020 50% level (Major Resistance) *on any stimulus announcement.*

However, we're in a 2 year BEAR market, that often sees *extensions towards the 100% range at 2160*


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## Frank D

*ASX Primary & Weekly Cycles (SPI Futures)*
When we look at previous Bear Market sell offs, it can often go looking for the 100% of the range, which is 5012. *Once it reaches that point, it doesn't go much lower, in the current year.*
5012 is Support for 2020, but it's not a BUY & HOLD level, that will come in 2021 (previous Report)
_
_
Australian Stock Market down into 5012 and support back into the 2020 lows @ 5883

Has all the bad news been factored in the market in the Short-term?

There's 3 potential price actions that may happen.

A. - remains below the 2020 lows & in between 5021
with resistance next week around these 2 levels 5868 & the March lows @ 5980

B. More short covering from 5525 up to 6120 - resistance

C: A lot of Short covering into the 2020 50% level over the next few week @ 6355 - a lot of resistance for more weakness into 2021

They are predicting it's going to get worse over the next 4 weeks with a Peak around MAY June, therefore there is expected weakness into 2021 for long terms buys.


*In the Short-term I would think a bit of A, but I won't be surprise is there is B!*​


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## Frank D

*S&P 500 E-mini Futures Primary & Weekly Cycles*

_ We're in a 2 year BEAR market, that often sees *extensions towards the 100% range at 2160 (previous Reports)*
_
Didn't reach resistance levels from the March low breakout at 2745, but the Market is heading down into 2160, but it doesn't spend too much time below this level in the next 3-months.

I would begin to look for a counter-trend rally upwards from 2160 towards 2641 and as high as 2770 (50% of the range from highs)

Once that happens, then I would be looking the next sell off from around June, as it begins a trending period towards *new lows in 2021 (& long term buys)*


POSTED BY FRANK DILERNIA LINKS TO THIS POST


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## Frank D

S&amp;P Primary &amp; Weekly Cycles.

As I mentioned a numbers of Weeks ago, the S&amp;P would swing up from the 100% lows in the Primary cycles and move towards the 50% level of the range between the 2020 highs and 2020 lows.

We saw the S&amp;P hit and reach the Weekly highs and also retest the March low breakout @2743, which is what often happens in Bear markets - retest the breakout before it continues lower.

I'm extremely bearish after this retracement,  but it won't surprise me if it takes a number of weeks to unwind. 

That bearish sentiment can easily change, once governments start to re-open the economy, but technically it's down into 2021.


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## Frank D

*S&P 500 *

Thursday's close is exactly the 50% level @ 2785.75% of the range from the 2020 highs and the lows.

It could push up a bit more into 2861, however, everything around these levels are high risk on Longs.

The ideal pattern is a major sell down into the MAY lows.

Another bounce into higher highs, and then it all goes to shite in 2021.


----------

