AMT Model & Methodology

[Frank D]

SPI & S&P monthly ranges.

The SPI is currently supported above the Quarterly 50% level @ 4565.

However, it is also trading below the March low, which has hit this week and stalled.

What we also notice is the S&P swinging upwards and retesting the MARCH 50% level,
and currently being rejected down.

In conclusion:- currently there has been a minor swing upwards over the past
5-days, but my view has always been that there is a potential 2nd selling
pattern occurring from April, or down towards lower lows at the start of
April.

Both markets currently remain in a Secondary bearish cycle

 

[Frank D]

S&P Monthly and Weekly

Last week's breakout has failed to continue lower in the S&P, confirmed with
Today's continuation above the Weekly 50% level.

Same pattern as the AUD, which could see the S&P backaround the Weekly highs
over the next 2-days.

My view was for the SPI and S&P to reverse back into their Weekly 50% level and
then continue lower, towards double monthly lows in April

Based on today's price action that has changed.

 

[Frank D]

SPI Weekly and Daily

S&P 500 remains above key support levels (upward bias), with the SPI is now
trading around the Weekly level @ 4804.

This week is either going to continue to trend towards the Weekly highs, but I’m
not sure how much upside there’s left in the tank for today, when the market
is already trading around the daily highs @ 4810-16

Or this week is pushed back down towards the Weekly 50% level, which aligns with
the April 50% level and the start of the 2nd Quarter.

First sign today would be price trading below 4791

 

[Frank D]

S&P Monthly and Weekly

As noted in last week’s post, Thursday’s price action had changed the ‘sell’ cycle into
a trend with an upward bias once it closed above 1293

There are two possible patterns that can play out for the rest
of this week….

#1) remains below the Weekly level @ 1319.75 and retests the Weekly 50%
level @ 1292/93.

This is seen as support.

#2) continues to trend towards the Weekly highs @ 1335, and makes a beeline
towards the monthly highs

 

[Frank D]

SPI Weekly and Daily range

Wednesday’s breakout of the daily highs and the weekly level has resulted in the
trend moving towards the Weekly highs @ 4884.

This will also complete the break and extend pattern in the daily range around
today’s highs.

There are two possible patterns in the short-term….

Continues to follow the double weekly high pattern into next week’s highs
(don't trade shorts above 4891), as the extension is towards 4944.

Or,

today completes the move into Weekly and daily highs, and we see a
short-term reversal, with a possible move back down into the 5-day
50% level @ 4825

 

[Frank D]

SPI Weekly and Daily

today's trend guide is 4943.

If above 4943, it will complete the double weekly high pattern @ 4965 :- random resistance @
4962-69... (April highs @ 4978)

I'll be looking for a minor top pattern today, with the possibility that the
trend moves back down towards the Trailing Weekly levels (4813) over the coming days.

The S&P 500 continues to remain above key the Weekly level @ 1322, which
should normally continue to push up towards 1346-52..., and this could push
the SPI higher.

However, after 3-days of trying to continue upwards in the S&P, Thursday could begin
a minor move down, if it begins trading below the 5-day 50% level, but then it needs to crack
1322 (5-day low breakout)

Therefore, any highs in the SPI today will need to be helped by the S&P 500
moving down on Thursday, and not up towards 1346-52

 

[Frank D]

DOW and S&P 500


My view was that Thursday would try and move lower, and how both
markets responded to their Weekly levels would set-up the short-term patterns
over the next 3-5 days

Both markets moved down on Thursday, but both found support above those Weekly
support levels

Based on the current price action I would think both markets will try and make a
move towards the Weekly and Monthly highs (as long as they remain above
those levels on Friday)

 

[Frank D]

SPI Monthly and Weekly

the SPI has moved up into the monthly highs in April @ 4978, and in my opinion has
hit resistance levels and will begin to rotate lower over the coming weeks, and
move back down towards the lower Weekly levels.

Overall target in the 2nd Quarter remains 5093 to 5193....

However, buying at these highs is open to risk even though I think the market will
continue higher.

I'd wait until the market unwinds over the next 3-4 weeks (choppy), and
hopefully aligns with lower support levels in the month of MAY for the next
potential move upwards

 

[Frank D]

SPI Primary and Secondary Cycles (Left Chart),
and the S&P 500 Weekly (Right chart)

The SPI has pushed up slightly hitting 5006 and stalling.

As noted in the Weekly report, my view is that the Market has reached it’s highs
and will begin to rotate back down, helped by the switch in Weekly dynamics in
the S&P 500, with this week’s open.

My view is that the trend bias is up towards 5093 to 5139, but that’s more likely
going to happen later in this Quarter.

There are two possible patterns, and that will depend if the S&P holds support
levels (above 1300-1304).

If it does hold support, then I’ll look for the next push upwards from MAY, as
the market ‘chops’ around for the next 3-weeks (SET-UP B)

If it doesn’t hold support, and the S&P moves back down towards 1247-54, then
the SPI can makes its way back towards 2nd Quarter Support (SET-UP C)

 

[Frank D]

DOW and S&P 500 Weekly

US markets have continued down, but remain above or around their Weekly 50%
levels.

The most robust pattern for any further short-term weakness in both would be
from Wednesday's daily 50% levels, which align with last week's lows, as the
DOW makes it's way towards the April 50% level, and the S&P down towards 1295.50

However, if above the daily 50% levels, then both markets could see a swing
back towards this week's highs once again, simply because the Weekly 50% levels are
supporting the current trend.

My view is to continue down, but I wouldn't discount a higher daily close

 

[Frank D]

S&P Weekly and Daily

S&P continues lower, using both the Daily 50% level and last week's
lows as resistance:- 8.5 to 14 points

However, the S&P continues to remain above critical support levels @ 1300-1304

 

[Frank D]

SPI Weekly and Daily

SPI continues to consolidate around the highs, as the S&P continues to remain
above support levels @ 1300-1304

SPI swing target for today is 4905-4911, however, after already rising up 42 points
from today's support levels, the rest of today could move into a sideways pattern.

Whilst above 4855, 2-day swing pattern is towards 4926

 

[Frank D]

S&P Weekly and Daily range

As noted in the S&P 500 Weekly report...

Because of the shift in the Weekly lows, there is now greater chance of a
larger reversal pattern towards lower Support levels @ 1247-57, if there is a daily
close below those Weekly lows @ 1299

We currently have that pattern playing out, along with a breakout of the 5-day lows
on Monday, which will often extend towards lower lows in the following day....

There are two possible patterns....

#1) remains within the daily range (Tuesday's lows)

#2) or drops like a thud down towards 1247-1256 over the next couple of days.

And (#2) is what my view is, as long as it remains below key support levels
@ 1300-1304

Note:- Standard & Poors came out for the first time with a negative outlook
on US credit rating, which if it spooks the market further, then look for a larger reversal
pattern towards 1173-1185.

However, at this stage, first target remains 1256

 

[Frank D]

S&P Weekly and Daily

Nothing is ever 100% guaranteed when trading the markets, and Tuesday’s price
action is a perfect example of that.

Using a multitude of timeframes along with breakout patterns in a number of those,
this often suggests further weakness in the short-term (Tuesday’s lows), with
a possible reversal pattern down towards the April lows @ 1256.

Breakout pattern lasted only 8.5 points outside the daily lows

If that exact same pattern appears later on in this month or the next, then
I’ll have the exact same expectation, that the S&P is moving lower

Back into a consolidation pattern during April

 

[Frank D]

SPI Weekly and Daily range

The SPI continues to consolidate within the Weekly levels in April...

Random support 4893 (Weekly 50% level)

With the S&P now trading above 1337, and being the last week of April, there is still
the chance that the SPI continues towards the Weekly highs @ 5009, and then a
push towards the highs in MAY. (next week)

First it will need to move above 4960, and secondly the S&P to remain above 1337
and move up towards 1356+

Anything below the weekly lows at the start of MAY is once again is bearish.

 

[Frank D]

SPI Weekly and Daily


SPI opens below the Weekly 50% level and is being sold down towards the
Weekly lows.

Not sure how the rest of today will play out (random support 4846)

note:- next week's lows matches the MAY 50% level, which
is a critical support level in our Market (April consolidation and coming into
the start of MAY)

 

[Frank D]

SPI Primary (2010) and current (2011)

As mentioned at the start of April, the market was either going to continue lower...

or

because the S&P 500 had remained above key support levels (Fake break), it was
more likely going to continue to consolidate until the start of MAY, and then try
and make another move towards new highs in the 2nd quarter (5093-5193)

As we can see in the right chart below, the market has moved down into this
Week's lows, and next week’s lows now match the MAY 50% level. (Critical Support)

The current price action suggests that the Market may continue towards
new highs in the 2nd quarter @ 5093 to 5193, once Support has been
validated ( double Weekly low pattern)

However, keep in mind we had the same pattern in 2010, when the market
reversed down from the April highs, and by the 2nd day support levels failed
in MAY (left chart), on the back of weakness in the S&P 500.

What’s the difference this time?

The Primary cycles in the Aussie market are different, in 2010 we were below the
50% level, whereas in 2011 we are above, so there’s more reason for the trend
to continue higher during the current Primary cycle.

The S&P is also above the Yearly highs (1301-1331), whereas in MAY 2010, the
market opened below the Yearly highs and sold off on the first day of MAY (flash crash)


And currently, US markets continue with QE2 until the end June, which can
help underpin the current upward trend in US markets.

In conclusion:- be aware of any weakness below the MAY 50% level

 

[Frank D]

SPI Weekly and Daily

SPI following the double Weekly low pattern into the Support levels
in MAY @ 4759-67.

We should know by tomorrow or Wednesday how valid these support levels are in
the larger Primary and Secondary cycles


if above 4828 by Wednesday it should help validate support....


otherwise watch for a potential 2nd day 'break', which was the same pattern
as 2010

 

[Frank D]

S&P 500 (left) & SPI futures (right)

2-day reversal has completed in the S&P, remaining above it's Weekly
level @ 1347. (support)

Whilst the SPI has opened below the Support levels today, and has remained
below them..

I have two conflicting patterns, as I would normally associate the price action in
the S&P as moving back towards the highs from Thursday & Friday
(Wednesday consolidates or breaks support)

and I would associate the price action in the SPI as bearish, which is a mirror of
the price action in 2010, without the flash crash.

 

[sinner]

Hi Frank,

I am curious about your thoughts on USDJPY during the current financial quarter, if you have a moment.

Thanks.