Weekly Reports 24th November 2007

Weekly Report for DOW, ES-minis, and SPI can now be found by clicking the Report links to the right.

Weekly Report will be posted on the Weekend

Dilernia Model Technical Analysis:- Medium and Long-Term forecasts, trading set-ups, cycles, trends, support, resistance, swing points, and Market Timing.

For Day-trading and high probability trading set-ups visit this page everyday.

US report 23rd November part 3

Support around the November lows has been verified with the move back above the 5-day 50% level.

This market move was what the Wednesday Swing trade was about, with UP move coming 1-day late.

My expectation is for a continuation back towards the Weekly 50% level and move higher towards the new monthly 50% level in December before the next move down towards the December lows, as it follows the Dilernia Principle of a 2-timeframe wave pattern in lower lows before any major support and new UP trend can develop in 2008....

Full report found in the Weekly Index Analysis by clicking the US Index DOW and S&P to the right.

US Report 23rd November part 2

DOW and ES-minis

US Markets rising upward from Monthly support following the rotation upwards from the lower close on Wednesday and heading towards the 5-day 50% level.

The 5-day 50% level is going to define whether both markets are going to head upwards towards the 3-day highs or drift back down into the close.

No set-up for Friday's trading. Next set-up next week...

US report 23rd November 2007

DOW and ES-minis

US markets are trading around or below the extremes of the higher timeframes.

I expect very similar price action on US markets today, as what has occured on the SPI today:- A down bias, with the next best trading set-up next week.

These higher timeframe levels are major support zones:- below and expectation is a lower weekly close on Friday.

Above Support and expectation is a rotation back to the 5-day 50% level and then providing traders with next week's set-up.

Any push down and expectation that buying support will come around the same levels as other days. We have seen buyers prop up both markets on numerous occassions around the blue channel lows.

The 5-day 50% level still defines the trend:- don't trade longs below channel lows..



2-day stall at the Weekly 50% level, and today confirms the break with the expectation that there will be higher prices into Friday, and the overall move back towards the Blue channel highs.

Report continues below....

2-day stalling pattern on both days, and the 90-point spiral points have provided the springboard for each UP move in this market.

Today with the break of the 5-day highs and Weekly 50% level the expectation is a continuation upwards…

Traders can partial exit around 2.0758 and continue to hold

SPI Report 23rd November part 3


SPI has completed the 44 point down move from the Spiral top today.

No longs are traded today with the expectation that market is heading down confirmed with the break of the higher timeframe levels (Weekly and Monthly)

6346 is either exit all shorts for 2-lot traders

3rd lot traders can hold last contract with the exepctation that any further weakness today would be towards the lower pivot and double R44

SPI report 23 November part 2


Higher Timeframe levels are defining the trend today:- with price below both levels and moving down from the higher Spiral point the expectation is to head down into an R44 lows.

Whilst price remains below 6387 the expectation is a move down 44 points from swing highs and continue down into Friday as it remains below the higher timeframe levels....

Therefore trading longs below 6387 is open to risk....especially if it breaks yesterday's pivot low of 6358

There is NO buying set-up today

Lower risk level 6358

SPI Report 23rd November


Yesterday the SPI traded outside the Weekly lows @ 6397 and below the November 50% levels, which stopped the market rising.

Risk 6387

The Risk is based on the R44 spiral top, it's got two possibilites:-

1. Rotate back down from the spiral top, which is helped by the same higher timeframe levels stopping price yesterday, (trading below and outside levels) and moves down into a lower Weekly close on Friday.

2. Moves up from this level and swing back towards the 5-day 50% levels:- helped by the Spiral top and yesterday's high. And if US markets rotate upwards on Friday the expectation is for the SPI to move back towards the 3-day highs and Weekly 50% level.

I have no idea which way it will go, or how the market will react on open. The only thing that favours further gains is, it's moving upwards from Yesterday's spiral on the R87 which normally pushes prices back towards the highs and completes the 87 point range from yesterday's swing lows....6422

Don't trade against the risk level today....

US report 22nd November DOW and ES-minis

I had two set-ups for swing and momentum traders this week:-

1. Trade the 5-day 50% level direction as it followed the sell-off pattern into November lows.

2. Trade the Wednesday swing from lower support levels, however after the initial exit, the follow through on the upside didn’t continue.

Support is still valid around the Monthly and Weekly lows, but for the rest of this week there will be two possibilities defined by the 5-day 50% level....

US report continues below….

DOW and ES intra-day:-

The 5-day 50% level is still going to define the trend, and with the lower close there is the probability that the move will be upwards, but the length of the move is going to be defined by the levels shown….

Support around the Dynamics lows in the forward timeframe if down trend continues.

Trend identification defined by the 5-day 50% level.

Above the 5-day 50% level and expectation is a move back towards the 3-day highs.

No set-ups for next day trading…with the next best set-up coming next week...

Public holiday in the US on the 22nd



For any continuation of the trend price needs to remain above the break of the 3-day highs @ 2.0618 and continue upwards. Two possibilities:- Wednesday drifts back down into a lower close, which hopefully will remain above the 3-day high break so that it provides a better spring-board move on Thursday...(yesterdays report)

We can the push down on Wednesday from the Weekly 50% level and be supported at the 5-day 50% level, with Wednesday closing above the 3-day break.

This set-ups up a further move upwards on Thursday, as long as it remains above the 3-day break of 2.0618…..



Continues with the breakout of the November highs with trailing support defining the strength of the trend

At this stage no set-ups until either trailing support breaks

SPI 22nd November 2007 part 3

"Trade partial exits of 22 point ranges today." (morning report)


2nd partial exit is 6381 based on the 2nd 22 range bar...

2-lot traders can exit here or remain in longs if this wish with breakeven stops from entry...

3rd lots can hold with breakeven stops, because price is rising upwards off the November 50% level at 6363....

SPI 22nd November 2007 part 2


That's the problem shorting lower opens, the market moves 22 points against the trend and then fades back upwards in a non-linear mode...

BTW, it won't surprise me if the previous 5-day lows @ 6371 caps the market today, I'll know that by another 22 point rotation back down, and it ends up being a choppy trading day.

Ideally I would like to see it now remain above 6358 and moves up 44 points into 6397.

If it moves back under 6358 today I won't trade again...

First partial exit 6368, 2nd around 6388 and then hold...

Stops 6353

SPI Report 22nd November


SPI is opening near the 50% level of November @ 6363, which completes the rotation down during the month of November.

This is a critical level on the Australian markets, because below this and the expectation that the market will move much further down.

SPI report continues below....

Today Risk 6358:-

There is no gap trading set-up today:- Gap Trading normally provides traders with a view of an UP swing towards the gap over 1-2 days, but today it's not the case.

Trader's simply have to manage today by trading on the side of the Pivot:- because below and the expectation is a trending down day:-

Upside and it's the expectation of 44 point moves, but keep an eye on the Weekly lows @6397 which often can keep the market outside this low for the day...

Dont trade longs below 6358 today.....

Trade partial exits of 22 point ranges today.

I probably won't trade any shorts below 6358 today, because it's not my style to short lower opens..

US report 21st November 2007 part 3

DOW and ES-minis:-

"With the today's Dynamic lows lower than yesterday, I expect slightly lower prices on Wednesday before any rotation back upwards towards the 5-day 50% levels, and hopefully further gains....." (earlier report)

Both US markets came down and re-tested the lows providing perfect enteries using dynamic support using three timeframes:- Monthly Lows, Weekly lows, and Daily lows on both these Markets.

For Those traders LONG it's now managing the positions in both markets.

I would have liked more of a bounce in both markets, and what we need to see is a move above the 5-day 50% level tomorrow and then a continuation back towards the 3-day highs....

Partial exit both US markets at these levels and move stops to below today's lows, and hold for a potential break of the 5-day 50% level tomorrow.

This week's trend is going to continue to be defined by the 5-day 50% level, so there needs to be follow through tomorrow....

Full US report later..

US report 21st November 2007 part 2

DOW and ES-minis:-Intra-day charts

US markets coming into yesterday's low early in the trading day.

With the today's Dynamic lows lower than yesterday, I expect slightly lower prices on Wednesday before any rotation back upwards towards the 5-day 50% levels, and hopefully further gains.....

Look to partial exits at the 5-day 50% levels and hold for further upmoves....

It's hard for any day-trader to be trading shorts around these lower levels today

Don't trade longs below the channel lows in either market on Wednesday.

US report 21st November 2007

DOW and ES-minis:-

Tuesday continued down into major support levels based on the November lows and Weekly channel lows. This was the expected move this week as prices pushed down from Monday's open.

Around these support zones we saw major buying that pushed price back into the 5-day 50% levels. If there is going to be a reversal off these lows, then Wednesday will need to move back above the 5-day 50% levels and begin a swing back towards the 3-day highs and Weekly 50% level.

These lows are based on the Daily timeframe and calculating the higher timeframes.

When you look at the Weekly timeframe, the November lows are actually much further down:-

DOW 12694-12713
ES-minis 1399

Even though these levels on Tuesday found support, if the market breaks Tuesday’s lows then there could be a swift move down to much lower levels based on the Weekly timeframe….

Weekly charts can be found in last weekend’s report showing lower levels.

US report continues below….

Intra-day shows both US markets still trading below their 5-day 50% levels.

The 5-day 50% level is the trend guide, and it won’t surprise me to see a re-test of the lows from yesterday, if that’s the case then these ‘blue’ channel lows should hold and move back towards the 5-day 50% levels and hopefully head higher back towards the channel highs.

High Risk trading LONGS below Channels lows on Wednesday…..

SPI report 21st November part 4


SPI has moved down into the lower pivot of 6410 and moved upwards into another 44 point spiral top before reversing back down.

Another 44 points down will align with the lower 5-day dynamics ranges, which also match the November 50% levels.

Around these lows there will be a cluster of support, but this will only be confirmed with not only price move upwards late in the day, but will need a follow through on US markets on Wednesday....

3rd lot traders should either be neutral (exit 6418) or still short......



November 50% levels supporting the market, with the expectation that this week would continue higher.

On Tuesday the market has moved back towards the weekly 50% level and stalled. For any continuation of the trend price needs to remain above the break of the 3-day highs @ 2.0618 and continue upwards.

Two possibilities:- Wednesday breaks upwards and moves in a bottom-to-top trading week into Friday. Or Wednesday drifts back down into a lower close, which hopefully will remain above the 3-day high break so that it provides a better spring-board move on Thursday...

GBP report continues below...

GBP consolidated for 2 days under the 5-day 50% level and then breaking upwards on Tuesday.

The early exit zone was 90 pips with trailing stops on Friday, and we can see the next push upwards has occured from the 90 pip spiral low....

FOREX report 21 November EUR/USD


5 days of consolidating and sideway price action has sent the Euro towards the November highs.

My trade was short yesterday with tight stops above the trailing resistance line, taking me out and I haven't re-entered again.

This price is is very similar to GBP. The pound rallied to the same highs and reversed back down, so I'll be looking for any similarities of a major move down from these highs and use the trailing intra-day cycles and entry levels and money management techniques.

SPI 21st November part 3


3rd lot traders can exit around the 2nd R44 low @ 6417 or thereabouts.

NO longs are traded today as the potential to follow 5-day market dynamics lower into EOD is a possibility, as yesterday's support isn't valid today.....

SPI report 21st November part 2


R44 completion @ 6459 take the day off (2-lot traders), as the market can continue down following the 5-day pattern cycles...

3rd lot traders can hold with breakeven stops.....look for a double r44 range or R87 range completion.

There is still a possibility that buying support can come in off these R44 lows, and confirmed with yesterday's pivot @ 6451...

but currently following market dynamics .....
Premium reports via email:-

"A weaker pattern will move down from the pivot @ 6502 as it completes the Gap closure on the R87 from yesterday and moves back under 6485:- don't trade longs below these levels.." 9:00am

" Anyone who is shorting down from 6502 look to partial exits around 6486 or around 18- points down from highs....and see how 6485 plays out.... 9:55 am"

Expectation of a 44 point down move....

SPI report 21st November


"There are two gaps, the recent lows @ 6450, which can send the market down if it aligns with a 44 point spiral top, but the gap that I'm looking for is 6481-6500 (today-tomorrow)" Yesterday's Report

Tuesday I was looking for a rotation from 6417 and back into 6500. This was based on the R87 spiral point and Gap trading.

The expectation was for 2 lots traders to trade up into 6450 and exit, and the 3rd lot traders hold into a higher open today.

3rd lot traders can exit on the higher open today, or continue to hold based on today's trading.

Risk 6485....

I have no idea how today will trade, it won't surprise me either way whether the market continues up into the next pivots @ 6542 as it rotates back towards the 3-day highs....or reverse back down on open completing an R44 low before verifying a 'bullish pattern' with buying off the R44 lows...

Expectation is a 44 point move either way...trade into the 44 point range completion and take the day off for 2-lot traders.

A weaker pattern will move down after it completes the Gap closure on the R87 from yesterday and moves back under 6485:- don't trade longs below these levels..

If the market is going to head higher then it should remain above 6485:- Don't short trade above this level today

US report 20th November part 3

DOW and ES

Major support verified using the Dilernia Model with a late counter-trend move back towards the 5-day 50% level.....

Full report later...

US report 20th November part 2

DOW and ES-Minis

Tuesday was choppy early pushing upwards into the 5-day 50% level and then reversing back down into the 3-day lows late in the day and heading towards the Weekly and Monthly lows

US markets continue to follow the overall trend down towards the November lows.... and this late sell-off is moving into major support for this current trading month around the Weekly and Monthly lows...

If there is going to be a counter-trend move back towards the 3-day highs, then it's likely that these lows and Wednesday will be a high probability trade...

Full US report later....

US report 20th November DOW and ES-minis

The start of the trading week was simply trade on the side of the 5-day 50% level, and below it the expectation was to head down on Monday towards November lows.

During the trading week I try and give one, maybe two good trading set-ups per week, and yesterday’s trading was it.

For Tuesday I don’t have a high probability set-up, as early price action can go either way before it resumes the trend, so it might be 1 more day before the another set-up aligns with the Dilernia Model.

However the expectation still remains:- a test of the November lows in both markets.

US report continues Below….

Derivative markets are non-linear so a lower Daily close yesterday there is the expectation of a rotation back up, especially when markets are supported around their 5-day lows, as was the case yesterday, and in the SPI today.

The last few Weeks, most up moves have occurred on Tuesday, so any rotation upwards would be towards the 5-day 50% levels.

However I think the best trade would actually occur from the lower blue channels early in the day before a late UP move.

Risk levels are the previous blue channels @ 13082 on DOW and 1446 on ES, with the expectation that the market will move back down into channel lows.

Above those risk levels and rotation is towards the 5-day 50% levels.

Today’s isn’t a major set-up on open, it’s a wait and see how things play out using levels in the market to manage risk and hopefully trade the move from one level into the next.

Don’t trade against yesterday’s channel lows and today’s channel lows.


Still favouring downside moves on Euro:- Even though there has been no confirming break of the Weekly 50% levels, the Drops in weekly timeframe suggest weakness.

Yesterday the trailing support broke, but tested the highs and now selling off.

Trailing stop is above the resistance line looking for a 90 pip move towards 1.4598 to partial exit and hopefully it can break those support levels (3-day lows and Weekly 50% levels)

90 pip move aligns with Support....

SPI Report 20th November part 3


SPI continuing to slowly move up from 5-day lows

2nd partial exit is around 2nd R22 points (6449-50) Dilernia Pivot

2-lot traders can take the day off

3-lot traders:- looking for Gap closure today-tomorrow

Spiral points are 6431, whilst price remains above this level expected move to continue.....

SPI Report 20th November part 2


The lower open and push down has closely aligned with the 5-day lows...@6417

Traders on the way up: 2-lot traders look for 22 point moves in the market trading up into the pivot lows @ 6451...

Once out 1 lot the first 20-22 points up from swing lows:- move stops to breakeven from entry and hold for next R22 points

Keep in mind it's below the open of the market @ 6431 therefore don't trade longs below 6417. (open are both spiral points on R44 and R87 high risk today)

22 points up will place it above the Spiral-points, but then it needs to remain above it...

Parital exit @ 6432 from 6418 stops below todays low and holding

SPI Report 20th November


SPI has followed the pattern of reversing down into November 50% levels (6369)

These levels are major support levels for this month, but just like the US markets where support followed for nearly 3-weeks before breaking lower, the same can apply in Australia.

Yesterday I was bullish on the SPI, but I was only bullish if Monday opened lower and we could all trade upwards into 6568 and then hold. However the higher open had taken care of not BUYING the market, and as a 'day-trader' then only way I was going to trade any longs was from R44 lows, and along with the Dilernia-Pivot @ 6583 provided a short-trade back down and into R44 lows.

With US markets trading below their 5-day 50% levels at the time I didn't move into longs on those R44 lows, but switched my attention to trading US markets instead.

Today:- There are two gaps, the recent lows @ 6450, which can send the market down if it aligns with a 44 point spiral top, but the gap that I'm looking for is 6481-6500 (today-tomorrow)

At this stage I favour trading longs up into the First pivot (6451) and hopefully higher, a bearish pattern is 44 points up and reversal back down, taking out the 5-day lows. An Open around the 5-day lows gives traders a potential 44 point up move into the lower pivot before Risk increases.

Risk is 6451 (Dilernia Pivot)

DONT TRADE longs below 6417 and the 5-day lows

US report 19th November part 2

Both US markets are following the price action of moving straight down on Monday from the 5-day 50% level and heading down into the Weekly extended levels and November lows....

US report continues below....

Both US markets heading down into the 3-day lows, breaking it and find support around the 5-day dynamic lows...

Full US report later.....


I was looking for a Sell down to continue on Friday.. But whilst that set-up didn’t eventuate on Friday, below Friday’s lows next week and below Weekly 50% level the trend is down, and a similar pattern as GBP this week.(16th November)

Monthly highs still playing resistance on the Euro, and early Monday there is a break of the intra-day cycles. The 'probability-move' is back towards the Weekly 50% level:- a bullish set-up is a bounce off these levels finding support and closing above, with next day moving higher.

A weak pattern will be a break and continuation down back towards last weeks lows, confirming the change of 3-day cycle and below the Weekly 50% levels.

Weekly drops in forward timeframes favors down moves, but must be manage with intra-day cycles.

US report 19th November

"The 5-day 50% level, as show above (red lines), are going to be a critical factor in next weeks trading because it’s going to set up the next 3-days of trading. Above and it will head back towards the Weekly 50% level.... bearish pattern will just sell-off on Monday from the 5-day 50% level and head down (Weekend report)"

At this stage before Monday's open, US markets are pushing downward from the 5-day 50% level with the expectation that any follow through this week is down towards the November lows which also match the Weekly extended levels.

US report continues below...

Push down from the 5-day 50% level and expectation that price will go back down a re-test the 3-day lows. (blue channels)

These 3-day lows can play some support during Monday's trading, but below these 3-day lows don't look for any longs today, as price is heading towards the Weekly lows.

At this stage there are no LONG set-ups.

SPI Report 19th November part 3


This is what I wanted to see how valid any UP move in the SPI is going to be this week. The Push down from Risk levels @ 5683 and down into an R44 low will align with the 5-day 50% level.

A strong market will see some buying support come into the market around these lows and push back prices towards the highs.

A weak market will continue down into the Gap…

There are still no leads from US markets, as they are both hovering around the 5-day 50% levels, and ES is currently below it.



The November 50% level is supporting the market, and this week there is an expectation that price is rotating back towards the 3-day highs and Weekly 50% level.

These upper levels will confirm the strength of the reversal and break back above with a Daily close above it on Monday/Tuesday. Or it will deny any up move this week, and actually send the market down as it follows the trend defined by the Weekly 50% level.

These are the same patterns that have been occurring in US and Australian Markets:- Weekly lower open swings back into the Weekly 50% level before the trend continues down..

At this stage it’s too early to tell which direction it’s going to follow but the trailing support intra-day to help clarify any trades this week and help minimise Risk.

SPI Report 19th November part 2


SPI following Weekend analysis whist price is above the 5-day 50% level the expectation is that the market is heading back towards the 3-day highs.

A couple of stages that will need to see happen, a close above the Weekly 50% level 6611, will confirm part 1.

The 2nd stage would then need to see a close above the 3-day highs, and then I would think that a follow through on US markets would provide the spring board back towards 6737.

The only sad fact of today was the higher open to trade multiple contracts upwards into 6568 and then hold.

Price is hitting an Upper pivot @ 6583, but today's price action looks like it's just heading upwards...

Risk level on Monday is 6583..

SPI report 19th November 2007

If the market is rising upwards from the R87 Spiral point then the expectation is that should complete the move upwards.

Already SPI traders have a bullish set-up on Monday’s open, but where Monday opens defines the ‘risk’ trade, because a higher open leaves the BUY trade open to risk, because price can actually rotate back down and into the R44 gap after completing the 87 point range from Friday @ 6568.

So hopefully it opens closer to 6525 and provides traders with better ‘risk’ levels for a trade upwards. Traders want to trade up into that level at 6568 and then hold with hopefully the market continuing upwards. (premium report 17th November)


SPI has opened too high this morning and already completed the move to 6568. Trading longs around these highs this morning are open to RISK