AMT Model & Methodology

[Frank D]

----- Original Message -----
From: frankd@fdtradeco
Sent: Thursday, September 20, 2007 6:49 AM
Subject: Dilernia Report


Higher open and we have another spiral point on open.

Daily system short on higher open.

First partial exit is normally at the end of todays trading,
and hold for next day open. However, Traders can use a partial
exit zones @6409 (gap) or the R87 lows from swing highs today
for swing or position traders.

If holding overnight moving stops to above today’s highs. (exit
next day's open)

Day Traders...

Higher open and looking to trade the short side again from
higher spiral-points and Dilernia pivot…


Even though the expectation is for a large gap rotation back
down into 6407, intra-day there will be support zones with
most likely support zone will be around 6432.

This is the high of the previous R44 bar so partial exits are
around 6433-35

My partial exit was 42 points down from swing highs @ 6342 and
now running it into the gap with stops above todays highs

Frank Dilernia

 

[Frank D]

Dilernia Principles:

A break of the 3-month 50% level and expectation is that the market will move into a 2-period timeframe move into the next dynamic extremes: In this case the September high

The trader trading " principles of successful trading" has been completed and has been sent to the printers.

It should hopefully be ready to be shipped in a couple of weeks.

Regards,
Frank Dilernia

 

[julius]

Hi Frank,

What are your thoughts on the current SPI movement - expectation the market may test the October 50% levels before continuing toward the quarterly highs?

 

[Frank D]

My view is for the SPI to continue higher this week. Remember the last day of August when the August highs were 6255, and the market rallied over 100 points on the last day to reach those highs, then I’m not going to discount that happening this week also.

Whether it gets as high as 6635-55 or not, the weekly pattern suggests a higher close than the open on Monday.

I can’t see anything technical that suggests weakness in US markets or the SPI this week, other than one down day.

The only thing I’m looking for is how US markets react this week after last weeks trending rally into Expiry. If this week moves in a sideways pattern and closes near the center of the trading week, then there is a potential for the market to reverse back down from next week


So if that happens, then it could match a rotation, which aligns with the start of October.

Lets see how this week completes, and then see what the price action for next weeks probability patterns are, whether day trading or medium term (longer term analysis)

cheers
Frank

 

[Frank D]

SPI continues upward, and as Weekly trends move higher
the volatility drops considerably, however the same patterns
still appear but at a much slower rate.

Each rally has started from a 44-point swing low early in the
day, and each minimum up move has completed the ‘money pattern’
from swing lows following the weekly trend.

Frank Dilernia

 

[Edwood]

Hi Frank have been keeping one eye on the daily range today - noticed we dropped 23pts off the open, then up 43, and we've since come back through 22 again.... guess I'd better start watching it regularly then!

thanks, Ed

 

[Frank D]

A drop in volatility in rising markets and the intra-day swing of 22 points is going to be much more prominent now compared to down trending markets.

22-point swings can be used to great advantage when buying the dips, as long as you have an idea where the market is trying to move towards, what’s the trend, and the direction of the market within the ‘current’ weekly timeframe.

If next week ends up rotating back down from a higher weekly open, then buying 22 swing points intra-day won’t be much good.

I have an entire chapter devoted to intra-day price action and ‘range trading’ for derivative markets….

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

----- Original Message -----
From: frankd@fdtradeco
Sent: Thursday, September 27, 2007 8:15 AM
Subject: Dilernia Report 27th Sept part 1

SPI continues to climb upward towards the September highs, with the next spiral point @ 6602.

Therefore the early expectation is that the SPI will complete this range.

Depends where the market opens, but expectation is that 6602 should be filled

I would expect some kind of support around yesterday’s highs
A lower open today and moves up from 6572 and rising into 6602, then keep in mind 44 points up from lows…

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Why 6602? (spiral point)

Because it’s 87 points up from yesterdays lows….

You can see the 50% ranges of each, 22 points move into 44 points, which move into 87 points…

What’s the high of today?… 6609…which is 44 points up from today’s lows.

Bang the money pattern again..

The ranges are important, but so is the direction, the trend, support and resistance. Like a big happy family.


Cheers
Frank

 

[Frank D]

----- Original Message -----
From: frankd@fdtradeco
Sent: Thursday, September 27, 2007 10:37 AM
Subject: Dilernia Report 27th Sept part 1


44- points up is 6609

The same analysis applies,.. 44- points up, then use 6603 as a guide if wanting to trade down.... (higher risk trade)

i.e. higher spiral stop open and coming down... (Dilernia pivot)

Each 87 points (spiral-point) will normally produce some selling around the highs, or some buying around the lows. It doesn't mean there is going to be a major reversal from a spiral point, it just means 'Risk' has increased around those levels....But most 'reversals' in the market will occur from a spiral top.

therefore 3 things can happen for an intraday trader.

1. trade into the Spiral point(completion) from a lower open and exit.
2. Trade shorts from a spiral point using partial exit tactics on the way down
3 or don't trade.

Tactics can be trading 44-point moves, or splitting up the partial exits into 22 points and then 44 points. It all depends on how many contracts you are trading. You need to adjust tactics and exposure based on market volatility and market direction

As the old adage goes 'trade with the trend'....You'll make money trading with the trend. However you don't always need a trend to make money. There are always exhaustion points in the market, but you need to minimise exposure. It's not always wise to trade max exposure on every trade.

I've always been told, every trade starts from a trend or is a trust out of a congestion area, that might be the case when trading equites,but it's not always the case when trading derivatives.

There are always players that like to come into the market around certain ranges trying to push the short-term trend in the opposite before the overall trend continues. It's those points in the market that allow the trader to enter, exit or not trade at all.

You heard me say this many times before....

"I’ll be introducing and identifying a ‘new’ pattern that has a statistically significant chance of price follow through. These patterns are called ‘Spiral-Points ©’: they are dynamic support and resistance levels that define the direction of the market and the high probable expectant outcome. Spiral-points are ideal for day trading derivative markets; they are an excellent timing tool to get you in and out of the market, thereby allowing you the potential to capitalize on intra-day moves. Spiral-points are extremely important because they become ideal entry points; important because of least capital risk, and important because they’re closest to your initial stop loss point.

There are a few market patterns that occur with such unbelievable regularity that traders must become aware of them. No one, to my knowledge has engaged in more in-depth research (in this area). The principle concept is simply support and resistance. It’s one of the most important elements of technical trading. Why? Because it eliminates most of the guesswork and allows you to make logical, well-supported trading decisions" (2005)


Frank Dilernia

 

[Edwood]

66pts from low to high (44+22) then down 21

 

[Frank D]

Edwood,

I wouldn’t analyze it that way:- you’ll end up with paralysis by analysis, but you can see the patterns intra-day.

I would analyze it this way…market expectation is heading towards September highs 6655….

Market open from yesterday swing lows, completion of 44 points @ 6617.

Whenever the market opens in the middle of the range from the previous day, the expectation is that the 44 point range has to complete (6617)

This puts it above the ‘spiral point’ and yesterdays pivot (6603), with re-occurring pattern towards 6660:- 87 points up. Trying to trade shorts above 6603 today is open to risk with next spiral point at 6660 (not talking about scalping points here and there)

SPI completing the 2-period wave extension in September.

Normally these highs are viewed as resistance zones, however because it’s the last day of the month this level extends forward into October, so the target is valid but the resistance has moved upward. With any further advancement toward October highs in the next Quarter 7000+

So the question now…. Does October reverse down before it goes up, or does it contiune up before it reverses down…?

That all depends on US markets and Friday’s trading.

US markets are still short of reaching their September highs @ 14124,if Friday is going to follow the same pattern, then this will drag the SPI higher overnight.

The DOW and ES are trading above their 3-day highs, so technically the price action remains bullish, and with no ‘drops’ in any forward timeframes then there is no forewarning of any weakness.


The only thing I’m looking for is how US markets react this week after last weeks trending rally into Expiry. As I mentioned a few days ago... If this week moves in a sideways pattern and closes near the center of the trading week, then there is a potential for the market to reverse back down from next week

Whenever a 3-day cycle changes, the next day can actually rotate back down into the middle of the 5-day range. If this pattern occurs on Friday, then I would favour a move down next week.

If the weekly pattern closes in the middle of the 5-day range, then my expectation is that the US markets will begin a push down next week back into the 50% levels of their higher timeframes, which will drag the SPI back down. This normally happens when the open of the trading week and the close of the trading week occur around the center of the 5-day range

However, it would be very hard to see at this stage a major rotation back down into higher timeframe 50% levels on the Aussie market. There are no higher timeframe ‘drops’ in any forward timeframes to suggest a major rotation down.

Regards,
Frank Dilernia

 

[Frank D]

DOW and US markets have continued higher at the start of the
new month, hitting resistance and stalling.

Still can't see any major weakness in the markets with
any forward 'drops', other than periods of consolidation.

SPI...

Wednesday Risk play 6684 if looking for Gap closure

Personally I wouldn't want to be trading longs below 6684 today.

I'm sure there would be some support around the September high
price which aligns with the Monday high 'gap', but I would
prefer to be trading longs around the 50% level of the
5-day range or tomorrow. (hopefully lower open)

Frank

 

[Frank D]

SPI daily back into the 3-day lows. (6607) Once it broke 6684
today, (1 day late) the rotation down followed the trending
day down.

These lows need to be verified by a higher open tomorrow, based
on US markets rising overnight.

Up day on US markets need to be strong, because a flat ‘up’ day
in US markets and ‘drops’ are forming for Friday’s Trading…

Any further rotation down next week and lower 50% levels are
levels of interest.

Frank Dilernia

 

[Frank D]

DOW, ES, Er2, & SPI Weekly Report

www.datafeeds.com.au/DilerniaWeeklyReport.pdf

On holidays for next two weeks, so no updates.

Frank Dilernia

 

[Frank D]

----- Original Message -----

Sent: Tue Oct 9 6:40am
Subject: Dilernia Report 9th October


DILERNIA REPORT 9th October

US Markets

Both ES and the DOW are currently supported at their weekly 50% level.

The weekend report was looking for a push up into the weekly pivot highs before the reversal back into the weekly 50% level. Because the opposite has occured, this suggests the trend still remains strong.

Tuesday’s open will provide traders with the potential of a break above Monday’s high and continue towards the weekly highs.


SPI

Daily system will be adding contracts on lower open today

Above 6648 and expectation the R44 will complete.

September highs 6655 (monthly breakout)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

DILERNIA REPORT 10th October

US Markets

Both ES and the DOW opened higher on Tuesday and have
continued towards the weekly pivot highs, confirmed with the
break of Monday’s highs.

All Global markets are trading above their September highs : - ES 1468 & DOW 14124.

It is extremely hard to see any weakness in US markets even at
these highs. At this stage I would view US markets with daily
ranges that have an UP bias but those ranges will become smaller.

Further push upwards towards 14309, with last weeks highs as
support on DOW (14190)


SPI

Daily system will be exitting contracts on today’s higher open
to be neutral.


Risk 6765

Gap open on Daily range, the expectation that the gap will fill and could continue down into 44 points...(trading below 6765)

Downward:- below the pivots and expectation is that
44 points will complete. There is obviously going to be
some support around the previous 2-day highs, so any ‘shorts’
look for 22 point moves, with the hope of it contining down into
R44 points (system matching)


Trend remains up, above 6765 expectation:- September higher breakout of 6655, and market dynamics in this quarter pointing to 7000+.

 

[Frank D]

US markets are still trading above their September highs : - ES 1468 & DOW 14124.

ES continued with an UP bias and small trading range, whilst the DOW rotated back down into the 3-day lows.

The interesting part of this price action is both markets have now ‘drops’ in the forward weekly timeframe, which suggests further weakness into Friday:- normally a rotation back down into the 3-week 50% levels.

However, things need to be verified, and that normally comes from a break of the 3-day lows, Or in this case Wednesday’s lows on the DOW.


This is the first time in a long time in US markets that there has been any forward 'drops', and it's something to keep and eye on, even though the trend remains UP and still confirmed by the 3-day cycles, along with the expectation price is following the October extremes.

However 'drops' are forming the view that momentum can quickly change, but price action needs to be verified

 

[Frank D]

US view above...


SPI will open up around 6754, which completes the 44 points down from yesterday's highs.

Bullish markets often see these lows provide the entry for the continuation of the trend upwards (44 points), as was the case on Tuesday, but I personally don't want to be trading longs below 6765 today without matching systems, and 'drops' in US markets.

 

[Frank D]

Push down early in the day completing the 44 point low @ 6754.

Nothing stopping this market:- Looks to be heading towards 7000 much faster than expected.....as long as US markets remain above their 3-day cycle lows.

Use same pivots tomorrow.

 

[Frank D]

US Markets opened much higher, and the price action followed the drops resulting in a large trending down day back into the 3-day lows.

Both markets have now ‘drops’ in the forward weekly timeframe, which suggests further weakness into Friday:- normally a rotation back down into the 3-week 50% levels.

However, things still need to be verified, and that normally comes from a break of the 3-day lows, which it did, but price action still remains trading just above the 3-day lows.

If Friday is trading below those 3-day lows, let the market run its course, hopefully into the 3-week 50% level, and then look for a rotation upwards next week after the change of ‘cycle’ :- short-term 1-2day reversal before it decides it's direction for October based on next weeks 50% level.

 

[Frank D]

SPI

Higher weekly open on the SPI and expectation of a 2-day stall rotation down.

2nd day of the rotation breaks the 3-day lows (6744) and heads
into the weekly 50% level @ 6690. This is the first time is a
number of weeks that the 3-day cycle trend has broken. (first
sign of confirmed weakness)

Whenever there is a break of the 3-day lows, the expectation is
that the next day will swing upwards and move into a 2-day
counter-trend move.

That will depend on how far the market moves down today,
and tomorrow’s open, based on US markets.

However I wouldn’t want to be trading longs below 6744 today…

Looking at US markets…

Last weeks drop, then 2-day up move, and this week’s break of the
3-week 50% level on Monday, and it is the first time that
weakness is confirmed on both the DOW and ES…


Whilst price is trading below both 50% levels the trend is
down.

The only bullish price action would see a daily ‘hook’ back
inside the 50% levels, then the expectation is that the market
will swing back towards the 3-day highs on both markets, using
the 50% level as support..,this will drag the SPI higher.

Otherwise with all markets trading below the previous 3-day lows this 5-day (weekly) trend is down….


Note: 2-day counter-trend move has a random length, it
can consolidate around these lows, or it can easily make it's
way back towards the recent 3-day highs...

Note: there are no higher timeframe (monthly) showing forward drops suggesting major weakness in global markets. It's simply looking at the current price action and making judgement calls.

Sold 30% of margin positions today, still 70% held on leverage.

100% committed and holding on long term portfolio. (never sell)

Frank

 

[Frank D]

Whenever there is a break of the 3-day lows, the expectation is
that the next day will swing upwards and move into a 2-day
counter-trend move.

That will depend on how far the market moves down today,
and tomorrow’s open, based on US markets.(yesterday)


Yesterdays break of the 3-day lows of 6744, and the day
range remained below the break, and continued down as US
markets pushed lower from their break overnight. However, today
the expectation was for a counter-trend move back upward…..

----- Original Message -----

Sent: Wednesday, October 17, 2007 7:56 AM
Subject: SPI Report 17th October

Today’s lower open, and the overall short-term trend is
bearish. This can lead to a weekly ‘bar’ that closes on it’s lows
as it rotates back towards the monthly 50% level.

However a break of the 3-day lows and the next day there is
an expectation that there will be a 2-day ‘stall’ rotation. In
that case this favours a move upward.

And looking at the ‘lower’ R87 Spiral point @ 6705, any up move
and the target is the R87 highs, which is 6772… (today/tomorrow)

Yesterday there was a lot of support around 6705 (pivots), this
is also the R87 lows, so the expectation is that the market to
move higher on open, look for R44 completion @ 6750, and then
use previous pivot of 6744 as a trend guide for remainder of
day with the expectation market is moving higher into a 2-day rotation upward.

(random length and depends on price action in US markets)