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AMT Model & Methodology

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DOW

On Tuesday the expectation was a rotation back into the 3-day
low, however Tuesday has ended up being a down trending day
with support failing, this weakness was probably due to the
fact that the proceeding weekly 50% level is diverging
downwards, which isn’t a good sign for the current trading week.


AMT Risk level for Wednesday trading below 13616

There was some Buying support around 13616, failing to rise
55 points and taking out the lows pushing price down into close.

DOW1117.jpg



No idea how the trading week will pan out, a consolidating
choppy trading week will see slightly lower prices on
Wednesday before moving in a 2-day counter-trend into Friday (support 13511)

A down trending week will see July lows break (13511) and head down
into Friday.

The diverging 50% level and now trading below the current weekly
50% level and the 3-day lows we don’t need to be Einstein to
work out that the short-term trend and cycles are weak, the
only thing traders can expect whilst price is still trading
above the monthly 50% level is a 2-day up move into the end of the
week.


Frank Dilernia
 
DOW….


Looking for a rotation down into support this week on the DOW
before the next move higher, this completed on Wednesday, now
it depends on what happens on Friday to see if there is a
confirmed close above 14118, for another move higher.


DOW197.jpg



However the market didn’t reverse down until higher prices
on Tuesday,

Friday OTD 14402 down move 55 points
Monday OTD 14444 down move 55 points
Tuesday OTD 14496 down move, but this time is continued down
95 points.

DOW1971.jpg


The down move and OTD levels did exactly the same, provided
55 point up swings with the last one @ 13900, providing the up
swing and continuation higher. This lined up with the weekend
report.

This is why it’s important to have first lot exit strategies
when trading, because on occasions there are players that come
into the markets around those levels pushing the market 55
points before it continues with the short term 3 day trends.


SPI….


Looking for a rotation down into 6365-6351 for the next up move
to occur, using the daily set-ups the best day for this to
happen was today when the daily system aligned with today’s open
@ 6350, hopefully there is a continuation into a minimum move
of 6402.

SPI.jpg


The partial exit on the SPI was 23 points up @ 6371 from open
and now 2nd lots can be run with breakeven tops from entry and
hold into 6402 (87 points up from yesterdays swing lows, with
3rd lots into higher prices tomorrow.


Frank Dilernia
 
The AMT model (Dilernia Model) gives traders an idea
about market dynamics and probable market paths into the
future, it’s about looking into the future to provide and idea
about the present.

Below is a chart of the Australian stock market in 2006 and
now 2007, we can see 15 weeks of sideways trading in 2006 after
it had reached the Primary range highs before the next up move,
and we can see another major consolidation period once again
around the same time after it has reached the primary range highs
in 2007

The 2006 breakout was confirmed with a few weeks of
consolidation above the primary highs, so if this market is going
to kick up into 2008, we need to see higher prices and 6376
becomes a support zone with a confirming break above the
3-month highs.

At this stage the view is more consolidation.

SPI22.jpg



With reporting season just about to kick into gear the
expectation is the market is going to move higher towards the
July-September highs, however when we look at the forward
Quarter from September-December there is a lower top.

I’ve called
it ‘Dilernia-Drops’, because it is forewarning that
there could be a drop just around the corner into the end of
this Quarter. It doesn’t favour higher moves. We use
the Dilernia Model of looking into the future that might give
a forewarning of the Present.

A ‘Dilernia-Drop’ is for the current Quarter and into
the end of the timeframe, we have seen these ‘drops’
forewarning reversals in the markets in forward monthly
timeframes,with two monthly Dilernia-Drops this year providing
the timing for the two biggest drops this year, and just this
week in US markets on the weekly timeframe.

SPI221.jpg


It doesn’t mean there is going to be a massive drop, it just
means that the bias is to move lower or sideways into the end
of the quarter before any higher move, but that down move can
happen anytime in this quarter.

How far it moves on the downside or closes in this quarter
should give traders an idea about the strength and market path
of the last 3 months into 2008 and beyond.



DOW….


There is nothing to suggest that there is going to be any
weakness in US markets other than resistance around these
July highs before the extension upwards into August.

DOW22.jpg



ES….

The only drop in US markets was for the current trading week, with
a Dilernia Drop on the weekly timeframe providing the move
back into the 3-week 50% level (weekly support).

ES22.jpg


If that is the case then the 3-week 50% level should provide
the support levels back towards the highs next week or
a consolidation at least into the end of of July into
August.


At this stage with July highs providing resistance, US markets
look to be in sideways pattern until August, whilst here
in Australia I’d be weary investing around these highs
after reporting season is over and consider it once again at
the start of the next quarter.

Frank Dilernia.
 
Intermediate timeframe support 6218 (monthly 50% level for July)

Trading below August 50% level

Secondary Timeframe support 5949 (quarterly 50% level)

Most rallies began from timeframe supports, and
most consolidation/reversals occurred from timeframe dynamic
highs.

So far the market is just rotating back into central zones of
larger timeframes as it always does, with the Trend of
August defined by price trading either side of it's 50% level.

Dilernia Drops currently favouring further downside in forward Month

SPI277.gif


Technical Analysis using Dilernia Dynamics & Principles

Dilernia Model © 2003-2007
 
Now we can see how important the Quarterly support levels are
going to be. These levels on the SPI have defined the strength
of the secondary trends for a number of years.

Support off this level and consolidation above it would
favour another move higher into 2008.

Use lower timeframe levels for trend direction in forward months and
short term weekly patterns.

SPI287.gif


Frank Dilernia
 
--- Original Message -----
From: frankd@fdtradeco
Sent: Friday, July 27, 2007 7:15 AM
Subject: DILERNIA REPORT


SPI

Market will try and close the Gaps today, 6147 and could go
as high as 6192.

However, where is your support???

Today is high risk trading and might be an idea to sit it
out until next week.

For those who don’t care, I’d use 6065 as your RISK LEVEL
TODAY with parital exits 44 points from swing lows.


SPI2871.gif


Frank Dilernia


Note: 44 points up from lows was 6093.

87 points up (primary Range) @ 6137 will go close to closing the Gap..

The market will try and fill the Gaps within 1-2 days
using Primary ranges.

Fading the gap on Primary ranges is an ideal trading strategy, once gaps
are filled then those levels are important RISK levels in coming days.
(next week)
 
Dear Frank,

Would you be able to provide some further details about calculation of dynamic highs & lows as per AMT model?

(apologies if you've answered this before on the forum, I obv missed it :eek:)
 
Julius,

I have written heaps of articles over the years, best to have a read.

http://www.datafeeds.com.au/AMT_articles.html

____________________________________________________________

Counter-trend Move back into August 50% levels.

Bouncing off July Dynamic lows 6003 using the Dilernia Model


SPI307.gif


Frank Dilernia

Dilernia model (c) 2007
 
Early this week I was looking for a move back up to the
August 50% level on the SPI, this was reached just after midnight
on the first August and we can see prices rotate back down
and follow the August dynamics lower.

Whenever there is a cross over the 50% level, there is
an expectation price will move into a 2-period pattern down, so I
would expect lower prices in August after reaching timeframe
50% levels on rotation/resistance.

Support that exists in July dynamically shifts lower in August.

The interesting part of the August lows is that it is matching
the 200 M/A average, and there is a cluster of support
levels around the 200 M/a, along with the Quarterly 50% levels.

If the market is going to head higher, the SPI needs to
stabilize around the 200 M/A (August lows) and continue to consolidate
for a number of weeks before any up trend can continue.

If we get support and consolidation for a few weeks then
swing traders should do extremely well into the end of the
Quarter, as prices rotate between support and resistance and large
Range days continue.

SPI81.gif


If it keeps going down, it keeps going down [:(]

Frank Dilernia

Dilernia Model (c) 2007
 
In 2006 we can see the same pattern sell-off into Quarterly
50% level and then into May lows before the market was supported
and consolidated for 2 months before this next up move.

The exact same pattern that is occuring now in 2007

SPI812.gif


If the same pattern happens in 2007 then swing traders should
do extremely well in that ‘consolidation phase’.

But Market dynamics is slightly different, as August lows are
much further down, however the same price pattern would do nicely
on the SPI if it can bounce next week these July lows (6007)
and back into August 50% levels around 6140 before the next
wave down into August lows.

The same pattern as 2006. (Dilernia Weekly Report 28th July)

SPI811.gif


Market has completed the 2-period down move into August lows @ 5922.

The same pattern as in 2006....

This rotation down into Quarterly 50% levels and 2-monthly
extended down move happens every year, it is what occurs from
now that will give traders an idea how the rest of the quarter
plays out, because a Bullish market should move into a
multi-week consolidating phase using these levels as support
zone. don't be surprised to see prices head straight back up to
50% levels.

That is going to depend on what happens in US tonight, and how
these lower levels play out for the rest of the Quarter, because
there is going to be a lot more hurt if this quarterly timeframe
goes straight down into much lower levels over the next 2 months.

Frank Dilernia
 
hy frank, could you tell me where i can find your book?
did you write your system in any software language?

thnks
bye
 
hy again, i've seen your book in your site, could be ship all around the world?
i live in Italy.
ciao
 
Coquin,

current book is sold out.

I'm in the 'slow' process of writing a new book won't be ready for a couple of months.

the trader trading 'principles of successful trading'

i'll let you know when it's ready

cheers,
Frank
 
DOW:

Next Week: I’d like to see DOW bounce early next week, move
up into the August 50% levels before the next move down from
the start of August into August lows. (28th July)


The US markets just reached their 50% levels on a 2-day up swing
on Thursday. The 2nd period down move into August lows has
just started on Friday for US markets.

If Traders want to make Price base anaylsis of the SPI they need
to have an idea what US markets are doing, US Markets will
push around the SPI overnight, maybe when US markets might
find support around August lows any up trend at the earliest
will begin from September with a confirmed cross over on 50%
levels, otherwise trend is down.

Always look for 2 day counter-trend moves with 3rd day sell-offs
as weekly timeframes close down. It is the exact same tactic used
on rising trends, 2 day reversals back into 3-day lows
before uptrends continue.

----- Original Message -----
From: frankd@fdtradeco
Sent: Friday, August 03, 2007 7:29 AM
Subject: DILERNIA Report 3rd August

If The DOW is going to follow a weaker pattern then price
should stall around the 3-week 50% level (today’s highs) and
drift back down into the end of the week.



DOW83.gif




DOW831.gif


The same on ES, about to hit resistance around weekly and
monthly 50% levels, with the expectation of rotation down.

ES83.gif


ES831.gif



The market is trending down, however lower opens will often
provide upmoves back into the 3-day cycles, this is always
expected at the start of the trading week, but the strength of
the trend will always be determined after that move completes.

The first sign will be a break and close and the 3-day highs then
a move back above 3-week 50% level.

Until then, enjoy the volatility and Daily ranges for
short-term traders and be patient when entering long term
stock positions.

Frank Dilernia
 

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