AMT Model & Methodology

[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]

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]

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.