AMT Model & Methodology

[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]

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]

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.