AMT Model & Methodology

[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]

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.