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.
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 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...
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....
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 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
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
The Risk is based on the R44 spiral top, it's got two possibilites:-
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....
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….
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
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
First partial exit 6368, 2nd around 6388 and then hold...
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..
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..
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.
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:-
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…..
5 days of consolidating and sideway price action has sent the Euro towards the November highs.
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.
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.....
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 .....
"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....
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.
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...
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....
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….
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.
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.....
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 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
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.
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 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..
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