AMT Model & Methodology

[Frank D]

RIO TINTO

Since the March lows there was an expectation that RIO was heading
back towards the Yearly 50% level @ 75.29.

Once it completed the move into the Yearly 50% level (Stock Report) it
was time to exit any longs and wait until the 3rd Quarter forms.

The Yearly 50% level can act as resistance, which is also part of
the breakout pattern in 2008:- retest the break and 50% level in the
new year:- 2009

The trend of RIO will be defined by the 3rd Quarter 50% level, as was
the case in 2008.

We have two plays on RIO for the rest of 2009….

3rd Quarter UP move towards $94.00

or a down move towards the lower levels and 2009 lows over the next
3-months

A move down into the Yearly lows is part of the Primary Trend breakout
from 2008.

Breakout:- reversal into the Yearly 50% level and then a
rejection pattern away from the Yearly 50% level towards new lows over
the next 2 Quarters.

Two weeks to go until the 3rd Quarter begins and it's simply a matter of trading on the side of the 3rd Quarter 50% level.

 

[Frank D]

DOW Futures Weekly and 5-day pattern

Weekly 50% level continues the push downward confirmed with
another breakout on Monday.

The view is that over the next week or so, price is trying to make its
way back towards the Monthly 50% level in June/July.

 

[Frank D]

SPI Weekly and Monthly

SPI first target on the downside is 3705, with a max move down
towards 3645 and the June 50% level.

Once these levels are reached, I would look for a 2-3 day up move
back towards next week's 50% level, which is currently around the
3rd Quarter 50% level.

As we can see price is currently trading below the 3rd Quarter 50%
level coming into the last week of the 2nd Quarter, which is my trend guide.

Any short-term up swing should be based by a small range day,
and the next day takes out the previous day's high, confirmed with a 5-day 50% level cross-over.

 

[Frank D]

SPI Weekly and 5-day pattern

I mentioned yesterday that I was looking for a swing upwards and back towards the Weekly 50% level, using a probability pattern...

Probability pattern:- Break of the previous Daily high and the current
5-day 50% level....

This occured today with the move above 3808...

However, I wasn't expecting today would be the day. I would have if the
SPI hit 3705 yesterday before this reversal pattern occurred.

Should be interesting over the next few days, as price is trading near
or around the 3rd Quarter 50% level.

 

[Frank D]

SPI and S&P 500

Both the SPI and S&P have moved back into their Weekly 50% levels
coming into the last day of the Week...

Interesting pattern coming into play with 3 days remaining until in the end
of the Quarter, and we should get a fair idea about next week's trading
by how Friday closes in the US..

IF the S&P 500 is going to show some early weakness next week,
then Price needs to close below 923, and I would then look for a
2-day rotation back down towards the July 50% level....

Otherwise, there is going to be a breakout of the 5-day high and
back above the Weekly 50% level....

Not a good sign in the short-term for any bears..

 

[Frank D]

SPI Monthly

I've been harping on for a couple of months that the SPI is going to go
higher in the 3rd quarter towards 4400...

I didn't know where the SPI would be at the close of the 2nd Quarter,
but based on the current price action and trading around the 3rd quarter 50%, there is a
potential Thrust pattern in play...

Thrust pattern:- is a trend originating from the Monthly 50% levels in
the new Quarter.

However, we first have to deal with next week's higher Weekly open:-
Higher Weekly open trading below the Weekly 50% level, would normally
send the market down 2-3 days, which aligns with the start of the
3rd Quarter.

Therefore, it might take another 5-days of trading until next week closes
to verify any continuation upwards, or whether the SPI is trading either
side of the 3rd Quarter 50% level.

We will get an idea about any trend direction by price trading either side
of the Weekly 50% level, confirmed with a 5-day breakout range.

If Price is trading below the 3rd Quarter 50% levels, then any UP trend continuing higher is open to Risk....

And the market could continue to move in another 2-3 month sideways pattern, with a downward bias.

 

[Frank D]

SPI Weekly and 5-day pattern

Higher Weekly open around the Weekly 50% level @ 3897 should
hopefully continue down over the next 2-days

Based on Today's pattern, a move down would be towards 3855-60.

However, I never discount the SPI following the 5-day pattern from Friday's range break @ 3764 towards Monday's highs @ 3827.

but based on the higher timeframes, at this stage I won't be trading
that move, but trade managing shorts.

 

[Frank D]

SPI Weekly and 5-day pattern

We will get an idea about any trend direction by price trading either side
of the Weekly 50% level, confirmed with a 5-day breakout range.

Yesterday's reversal in the 5-day 50% level, and today's trading of moving above the Weekly
50% level and breaking is Bullish...

However, it needs to be confirmed with a 5-day breakout, and at this stage 3927 is viewed
as resistance.

All this price action that has occured in the 2nd Quarter, and that is currently occuring now in
the last day is starting to aligned with my view of a 3rd Quarter UP move...

As long as price remains above 3847:- July 50% level.

 

[Frank D]

SPI Weekly

The SPI reversed down from the 5-day highs @ 3927 yesterday, and
the start of this month is the first time in 3 months that price has
opened below the Weekly 50% level.

The previous 3-months price has opened above the Weekly 50%
levels, and the market rallied towards each monthly high:- April, MAY, JUNE.

Therefore the trend guide is 3846 (July 50%) and at this stage it's not looking like it's going higher.

I also mentioned last week… “that I'll get a clearer view of the
market after another 5-days of trading and the end of next week to see
if there is going to be a 3rd quarter UP move....

That is based on this Friday's close.

For the market to continue up, I would like to see the SPI continue to consolidate around 3846 and open above 3907 next week….

Otherwise the 3rd quarter rise is open to risk.

 

[Frank D]

SPI Weekly and 5-day pattern

Another choppy and consolidating trading day above 3846, which is what
I expected, and 1 more day until this week closes and next week opens.

The critical level on any further upside moves is based on 3907 and
price consolidating above that level for 2-3 days early next week, and
I would favour a new move towards July's highs.

I'll change my tune if or when price closes below a 5-day low breakout,
which isn't that far as they are creeping upwards (3819)

 

[Frank D]

S&P Weekly and 5-day range

That answers my view on the 3rd Quarter rise, with Thursday’s 5-day
low breakout in US markets @ 908.

Slight difference in market dynamics between the Australian market and
the S&P…

S&P is still trading above the 3rd Quarter 50% levels, whilst the SPI is
now below.

I pointed out yesterday that a breakout of 3819 on the SPI would
confirm being bearish, as price is now below all timeframe 50% levels
verified with a 5-day breakout.

However, early next week I would like to see the SPI swing back into 3819 to
verify the break, which should align with the 5-day 50% level and go
from there.

 

[Frank D]

S&P 500 Yearly

Ever since the March lows were reached that coincided with the Yearly
lows in 2009, my view has been a 3rd Quarter UP move towards the
Yearly 50% level.

This is a technical pattern that can often be seen throughout a number
of lesser timeframes, which is occurring in the largest timeframe and the
Primary Trend:- breakout of the 2008 extends downward and then begins
to long journey back towards the Yearly 50% level from lower support levels
during each of the Quarterly timeframes.

Complete DOW and S&P Reports

http://www.usindexweekly.blogspot.com/

Australian Market (SPI)

Australian Market will start the 3rd Quarter based on Friday's close
below, which is bearish.

http://www.austindex.blogspot.com/

 

[Frank D]

S&P Weekly and 5-day pattern

Lower Weekly open and rising up from the July 50% levels :- Support.

I would expect a 2-day swing, with a max move towards the
Weekly 50% level @ 911.

If the S&P is going to go down, then a higher Daily open using
resistance would provide the next down move in the market from
Wednesday:-

Ideal pattern:- short trade a higher daily open using a higher
timeframe resistance level.

If Wednesday fails to get sustained selling, (if it's is near the Weekly
50% level), and this lower Weekly open keeps
rising up from July's 50% level and ends up closing above the
Weekly 50% level on Friday, then expectation of further downside in the
S&P is open to RISK.

 

[Frank D]

S&P 500 Weekly

Last Week I was hoping for a 2-day UP swing from July's 50% level so
that Wednesday would align with the Weekly 50% level and a Higher
Daily open:- Sell resistance.

Instead price reversed down the next day and is now trading below the
July 50% level, as are most Index markets in the 3rd Quarter.

I would favour more weakness down into next week's lows, as price is
below the July 50% level.

If or When price gets that low, then I'd be looking for a potential UP swing
a towards the 50% levels once again:- resistance.

 

[Frank D]

S&P Weekly and 5-day pattern

I was expecting a UP swing back into the Weekly 50% level, but not on Monday, especially not when it didn't rise up from the 5-day lows or
higher timeframe support levels

Monday has closed between the Weekly 50% level @ 898 and the Monthly
50% level @ 884.

Based on this pattern it is unclear which direction the S&P will take until
after Tuesday.

I would think Tuesday will try and consolidate between 898 (Weekly 50% level) and 884 (Monthly 50% level).....

And then decide on the direction......

Back under 884 on Wednesday and S&P will try a push back
downward:- Weekly 50% level failure and back under the Monthly 50%
level.

or Wednesday/Thursday continues towards 920-928:- monthly 50% level
and a 1-2 day consolidating pattern above 884, and then price
continues higher into Friday

 

[Frank D]

SPI Weekly and 5-day pattern

Same pattern in the SPI as the S&P, except the SPI was confirmed with
a breakout of the 5-day highs @ 3769.

The reversal back into the higher timeframe 50% levels played out
precisely, however the UP move this week had to be confirmed with a
5-day high breakout, as there wasn't any higher timeframe support to
swing the market back upwards.

Based on this UP move and back into resistance levels, it is unclear
whether the SPI will continue up.

Often price will breakout of the 3-day cycle @ 3763, but then move into a
2-day stall (consolidation pattern) until the 3rd day, before price continues with the trend

Because price is hitting resistance and not above resistance. I favour a
stall/ consolidation pattern at this stage.

But that will depend on what happens in the US on Tuesday.

 

[Frank D]

S&P Weekly and 5-day pattern

Yesterday I had the view that Tuesday would consolidate between
the Weekly 50% and the Monthly 50% level and the trend direction would
be decided on Wednesday.

There was a breakout of the 5-day highs on Monday, so there was
an expectation that price would push up into Tuesday's highs and
then reverse down into the 5-day 50% level, which matched the Monthly
50% level:- 'Stalling pattern' to verify support.

Support:- lower Daily open rising up from support on Wednesday.


That pattern played out, but price didn't rotate down into the 5-day
50% level & support, instead breaking out of Tuesday's highs and now
moving up into 920.

At this stage the price action in US markets is starting to look like a
'fake' break of the July 50% level and the trend continuing higher.

But I would like to see Friday close and then use next week's 50% levels
as trend guides

 

[Frank D]

Financial Index

I said a number of months ago that any continuation upwards would
be based on the Financial Index in the 3rd Quarter.

We have a breakout of the 2008 lows, a move down into the 2009 lows,
and price action should now be swinging back towards the Yearly
50% levels @ 4400+

After last weeks push down I thought it wasn't going to play out...

But it now looks like a fake push down and prices now rising above the 3rd quarter 50% levels, which can lead to 'thrust' patterns upwards.

Reporting season in August, and I just don't see any weakness simply
becasue the current price action doesn't favour heading down.

If markets were going down, they wouldn't 'spring' back above in the
3rd Quarter like they have.

The Financial Index begins to consolidate above 3700 over the next
5-days, it's a good bet it will go higher.

 

[Frank D]

S&P Monthly and Weekly

This week has seen the S&P Rally into 920-28, which was my view on
any further upside once above the Weekly 50% level.

It was a bummer that this move didn't happen from Wednesday:- lower
Daily open rising up from support, as previously explained.

I have a larger trend pattern that should take the S&P up towards 960 in
July (read this weekend’s Report), and probably continue towards 1037 in
the 3rd quarter

This week’s UP move began from a lower weekly open and a 3-day rally into the Weekly highs @ 928.

A 4th UP day in a row drops considerably, without retesting the 5-day 50% level, even though Friday can close higher.

If there is a push down on Thursday into the 5-day 50% level, then a
higher daily close (higher high) can still play out and continue towards
960 (July highs)

If trading the market at this 'top' it makes it hard to go long unless there
is some short-term pullback into Trailing support levels.

Ideally a 2-day ‘stall’ pattern that aligns with next week’s 50% level would
be the my most robust pattern for any UP side to continue.

 

[Frank D]

S&P Weekly and 5-day pattern

3rd quarter rally with this weeks move back above key higher timeframe levels:- Monthly 50% level

As each day stalled around higher timeframe levels over the past 3 days,
and normally price would stall and reverse down into the 5-day 50% level
and then continue higher, traders need to be reminded that each day
is closing above the 5-day highs.

A daily close above the 5-day highs is a breakout in the 5-day pattern, and price will
often continue into the next 5-day high.

If it keeps closing above the 5-day highs, it keeps going up.

Why is this pattern happening now?

It's part of a higher timeframe 'thrust' pattern, as all trends orginate
from 50% levels and push outward.

And a 3rd Quarter 50% level is a major trend guide that's going to push
the market, especially when you look at the Primary trend and change of cycles, as shown in
the Financial Index chart (above)

Thursday is the first day that the 5-day high has stalled price closing below.

But there is still an expectation of a move into 960 in July