AMT Model & Methodology

[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]

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]

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