AMT Model & Methodology

[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"