Weekly Index Reports now available (22nd December 2007)

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Next post will be on Thursday 27th Dec 2007

Merry Christmas, Happy holidays, and good trading.


Thank you for your support.

Frank Dilernia


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E-mini 21st Dec 2007 part 2

E-mini and DOW have moved higher on Friday, breaking the 3-day highs and rotating back towards the December 50% levels.

Even after 3-days of sideways price action, and Wednesday's lower close, there was a forewarning that a move higher was more likely into Friday.

I've have described the 'RISES' in the forward weekly timeframe in the book, along with the 'DROPS'.

So what happens when markets break the 3-day cycle?

The Expectation is that price will rotate back down into the break and/or the 3-day lows again. This reversal pattern has even more reason to reverse back down:- higher Weekly close will rotate back down for 2-days.......

Full Weekly report out later

DOW E-mini Trading 21st Dec 2007

US markets opening around their 3-day highs.

My expectation this week was an UP weekly BAR followed by a down weekly BAR the following week.

I didn't think it was going to happen, but with a break of the 3-day highs today it will certainly be a higher close on Friday.

What is important on any higher close on Friday is the shift in the Weekly 50% level on Monday

(full Weekly report tomorrow)

3-day highs can often form a resistance zone, and this could be possible early on Friday, but any push down would be defined by the price reaction around the 5-day 50% levels.

This is the trend guide:- support

A break of the 3-day highs and rotation is towards the December 50% levels to close out Friday...

SPI Trading 21st Dec 2007 part5

15:20

SPI rotating upwards after 3-day consolidation around the December lows, back into the 5-day 50% levels...

I had a hunch this was going to happen today, but for me to be trading longs I needed to see 'gap' closure, or trade up from 44 point lows...

Full Weekly report tomorrow..




16:13

44 point reversal late in the day

5. re-entered on longs @ 6275 & 77

Partial exit 6293 and 6302

Forex GBP/USD 21st Dec 2007

Expectation that GBP is heading down towards the December lows based on the Weekly trends @ 1.9746

Around December lows, and expectation that price will be supported and will look for a rotation back upwards towards the January 50% levels in 2008.

This week I wanted to trade the trend down into the December lows using the 5-day 50% level, but this week hasn't seen a reversal back into those levels.

A couple of times I used support as BUY swings points, but after some support on both occassions it failed, and has continued down towards December lows.

We have the same pattern as before:- a breakout of the support and expectation that price will move down into next support, which also happens to match the December lows.

Previous support 1.9889 can often become resistance....

In conclusion:-

I would like GBP to head down on Friday, find suport and then swing upwards towards the 5-day 50% level.

There are two matching support levels around 1.9746-9, which I think can provide a robust swing point for a major reversal upwards.

For any move down I would like to see the R90 'spiral-top' and then come down back under yesterday's support.

Trading shorts above 1.9899 is open to risk. (R90 spiral and yesterday's support)

No positions as yet.

SPI Trading 21st Dec 2007 part4

4. 1 more short trade on R11 reversal @ 6241, partial exit on R22 lows, and stopped on breakeven entry once again.

R22 systems now long, so no more trades today, i'll see how the day closes.

There still seems a lot of resistance around 6251 and the Quarterly 50% level

Note: Potential to move higher on last day as it retraces the Weekly range into the 5-day 50% level, and previous Weekly break of 6351.

SPI Trading 21st Dec 2007 part3

10:50

partial exit @ 6231 R22 range (+15)

Holding into r44 completion @ 6209

Stops breakeven from entry..

SPI Trading 21st Dec 2007 part2

10:45

Higher open and looking for gap closure on the down-side:- ideally from 6245 and into 6202

Bias was to ‘short’ trade on open…

1. Short R11 reversal Entry 6228 partial exit 6221 (+7)

Stopped 6235 $dollar breakeven (-7)

2. Short Re-entry R11 reversal 6229 partial exit 6221 (+8)

covered shorts on R11 reversal @ 6229 (-0)

Market moved down 22 points, bounced reversed upwards into Risk level 6245.

3. Short entry @ 6246 (stops 54)

The longer it hangs above 6245, the more reason it has to move higher as part the rotation towards the 5-day 50% level…..

SPI Trading 21st December 2007

8:00am

Major support around the December lows.

Major resistance around the Quarterly 50% level @ 6251.

3-day cycles are 'sell', and last day of the trading week.


Risk 6245


There is a lot of resistance around these highs today, and a higher open favours trading short’s on open.

Once again I’m only looking for 22-44 point moves in the market down to the previous gap (last R44 high @ 6202)

After that move, the market can remain with the downward Weekly bias and consolidate around December lows to close out the trading weekly timeframe.

Note:- I can’t discount a move higher on the last day, as it retraces the Weekly timeframe and closes around the 5-day 50% level (6303) therefore breaking the 3-day highs

Two Scenarios:-

1. a lower open or push down into 6202 and expectation that R87 points has to complete @ 6245, and then 'could'???? continue higher later in the day, as it retraces the Weekly timeframe.

2. a higher open and trading longs around 6245 is open to risk first thing on Friday, as I have an expectation that there is a potential of 'gap' closure or around 44 point reversal, before market decides how it wants to play out Friday and the Weekly timeframe close.

Note: Trading shorts above the 3-day highs today is high 'risk' @ 6269

Forex GBP/USD 20th Dec 2007 prt 3

90 pip completed and exit.

Hit support and reversed into longs:- repeat the partial exit on 40 pip from swing lows, and

hopefully get some upside follow through back towards the Weekly break lows...

looking for 90 pip upswing and hopefully a move back towards the Weekly channel lows @ 2.0041

Stops below today's low, if stopped out won't trade again (going to bed)

Forex GBP/USD 20th Dec 2007 prt 2

Expectation price is coming down into channel lows.

Wednesday continued down, but the previous 90 pip low from Wednesday has ended up being a resistance zone on Thursday.

I was watching the reaction to the trio, and took a 'short' position because the 90 pip bar has to complete, which goes close to alignment with the Daily channel lows.

partial exit 40 pips again and holding into 90 pip completion with stops above 'trio' high...

DOW E-mini Report 20th Dec 2007

Below December 50% level:- bearish

Below Weekly 50% level:- bearish with expectation that any continued down-trend would be towards Weekly lows.

3-day cycles 'Sell'

When we look at this week's price action, the market is drifting lower, but it is being heavily influenced by the 5-day 50% levels, and also the 5-day range lows..



Traders simply have to monitor the trend using the 5-day 50% level in both markets, any further down move would be towards the lower channels, which may or may not support price on Thursday.

Is up to traders to use discretion on whether trading longs around the lows, or if trading longs above the 5-day 50% level.

SPI Trading 20th Dec part 5

11:40

This is what I wanted to see, and swing down 44 points into 6210 for me to trade any more longs today.

Entry 6211 & 6214

Partial exit 6221 (+7)

and holding for a double R22 upside, with stops @ 6209.

I’m not sure how the rest of the day is going to play out…

6251 is playing a major resistance zone on any UP moves in the SPI this week.

If stopped out on this trade, I won’t trade again today (trading below R22 cycle lows)...

Forex GBP/USD 20th Dec 2007

3rd day sell-off on Weekly timeframe:- breaking support and trending down.

Market path is to move towards the December lows....

Wednesday's trading was mapped out because price was trading around support, it was either going to swing back upwards, or break...

Thursday isn't any where near support or resistance, it has to move in either direction for the next trade.

Whenever the market breaks a 3-day range, it often moves to the extremes of the next days range. If that is going to happen then it's going to continue down into 1.9889

If it's going to swing upwards, then this is the 'best' Risk zone for any UP swing.

I wouldn't be trading any longs during this week unless it is near dynamic support.

Up swing would be back towards the 5-day 50% level, but the Weekly lows might resist price for the rest of the week...2.0041.

Therefore around this level would be exit zones, and could play resistance for the rest of this week...

SPI Trading 20th Dec part 4

10:15

Trailing stop taken out @ 6231 my last contract.....(+43)

Nice price action in the first 20 minutues of trading.

I still expect the market to rise 87 point upwards, and I will look for 1 more long trade again today, but if it doesn't align I won't trade again.

Personally I would like to see a 44 point down swing, to get another R44 spiral bottom and trade upwards again....

SPI Trading 20th Dec part 3

9:58

SPI comes down to 6182, bounces perfectly

Switched to longs

entry 6183 & 6188

partial exit 6200 (+17)

next partial exit 6224 (R44)

holding for R44 and then hopefully I get some follow through today and moves up 87 points

SPI Trading 20th Dec part 2

9:51

Expectation market coming down into 6182...

Perfect short set-up on higher open on March contracts with the R22 high and coming down into an R44 low...

Short 6216 exit all @ 6199... (+17)

Now look for market to settle with 6182 as important risk level today

SPI Trading 20th Dec 2007

9:00am

Looking at the Weekly price action and analysing the Market’s re-action to certain levels in December, things are starting to look like it's unwinding major trends and cycles.

The up swing and failure around the Week cycle highs @ 6647, and collapse into December lows is something that often occurs in Quarterly timeframes, however the re-action to 6251 and failure to remain above this level, is a worrying sign for major trends, and it’s beginning to look worse for any new uptrends to develop.

US markets don't look like there is going to be a higher close on Friday, and in the Australian market it looks like it’s consolidating around the December lows for the rest of this week.

Full Report (Weekly) on Major Trends this weekend


Thursday: Risk 6182.

R87 lows…

Consolidating price action with a ‘ Weekly down’ bias.

At this stage I’m only looking for 22 and 44 point moves today, with a Thursday Up bias:- because of lower Range Spiral points.

Don’t trade longs below 6182…

Note:- A rise upwards from lower R87 spiral point and expectation that 1-2 day upswing would move minimum 87 points.

DOW E-mini Report 19th Dec 2007 part 2

5-day 50% level is defining the Weekly trend, and it will be a guide for the rest of the week.

Looking at current 3-day price action in US markets, the next set-up won't be until this week closes, and the next Weekly timeframe begins.


Full US report later

Forex GBP/USD 19th Dec 2007 part 4

GBP following the Weekly trend down into December lows.

Break down of support today and trending day, as it follows the Weekly trend down.

Ideally, I was hoping for this to happen from the 5-day 50% level and 'short' sell on Thursday from a higher open.

Break of support today and expectation that price remains outside the channel until the next day begins, that's why trading longs below support is open to high risk.

Forex GBP/USD 19th Dec 2007 part 3

GBP:- moved up .44 pips (partial exitted)from early swing lows.

Reversed down took out my stops, and then moved up 90 pips before reversing back down from the spiral top, breaking support, and now following the Weekly trend down, as it heads towards December lows.

Once my stop was taken I went out to dinner, but the follow through into the 90 pip range was what I was looking for....

Forex GBP/USD 18th Dec 2007 part 2

Push down to complete the 90 pip bar and confirmed support off lower channels

Entry 2.0105 + 2.0101

looking to Partial exit around 40 pips from swing lows...

Stops moved to below 2.0101

Now looking for a 90 pip move and hopefully a 2nd 90 pip move as it heads back towards the 5-day 50% level.

Being Wednesday the potential to head down and break low is still a possibility…..

DOW E-mini Report 19th Dec 2007

US markets 'hook' Tuesday.

This is a high probability pattern that often will send the market higher into Friday. I don't expect large gains, it will probably be back into the December 50% levels, with first target the 3-day highs

This pattern has been shown throughout the book, but what makes this pattern so robust is where it occurs in relation to the Monthly 50% levels. When it is trading above the Monthly 50% levels then I can safely say it's going higher.

This time it is not, it is occurring below the Monthly 50% level, and the break of the previous 3-day lows. (less probability)


Every Weekly sell-off normally occurs around the 5-day 50% level.

So Price is trading around the 5-day 50% level and pushing down.

Traders will know which way the market is going by the 5-day 50% level.

Back below the Weekly 50% level and it's heading down and following the overall Monthly trends.

Above and it moves slowly upwards towards the Blue channels, and probably higher into Friday.

Forex GBP/USD 19th Dec 2007

GBP:- Monthly trend bearish, Weekly trend bearish, and 3-day 'sell' cycle.

Expectation that any further moves down this week on break of support would be towards December lows.

Today:- 2-day sideways movement and 3-day cycle has caught up with price, this can send the market down on Wednesday.

Do not trade longs below support.

A bounce off support today would be a swing back to the 3-day highs and 5-day 50% level, and easily continue higher.

A bearish weekly pattern would need to stall and consolidate below on Wednesday (5-day 50% level), and then sell down on Thursday and follow the trend down into Friday.

When we look at support and the 90 pip low, they both match around 2.0105.

This is a perfect Risk level:- because you will know the trend, you'll know whether you are right or wrong whichever way the market goes.

It's the best entry because it is closest to your stop loss point.

SPI Trading 19th Dec part 4

11.40

SPI following the rotate back towards the 5-day 50% level

There was a 3-pattern 44 point rotaton in the market today, and the last bar continuation upwards of the spiral point @ 6233 is following the Wednesday expectation of UP rotation.

This is the price action I wanted to see continue from the first bar and into a double 44 point UP move, which looks like it's occuring now.

I haven't traded any longs again because my intra-day systems have been short, but I'm not shorting if I have an expectation of further upside rotation.

Next trade tomorrow.

SPI Trading 19th Dec part 3

10:12am

R44 high and reversal:- Increased Risk of trading longs around these highs.

Potential of further moves down...

Trailing stop taken out @ 6226.

I won't trade again today, but if you are short, there is a good potential down move to continue the trend back into the December lows on further weakness.

Risk now R44 low @ 6206

SPI Trading 19th Dec part 2

10:01

This is what I wanted to see, a push down lower into yesterday’s last spiral point @ 6214 and trade up into 6246 and 44 point upwards and hopefully continue higher.

Entry 6218 Partial exit 6231 (+13)

Stops moved to 6212

Looking for 44 completion and hopefully continue higher and not turn down.

Next partial exit double R22-44 @ 6239

holding last into close or 5-day 50% level.

Risk increases around R44 high, so not surprised to see a reversal down either.

SPI Trading 19th December 2007

8:40

SPI has moved down into December support, with yesterday swinging upwards from the 5-day lows @ 6119 closing Monday's gap.

The Quarterly 50% level (6251) is going to have a bearing on the direction of this week's trend:- above and expectation market is moving upwards back into the 5-day 50% level and break of the 3-week lows @ 6351.

Below, and the market is drifting back down into a consolidating pattern around December lows.

This week's modeling patterns were Down day on Monday, UP day on Tuesday, and hopefully another UP day on Wednesday and it swings back towards central zones within the Weekly timeframe.



Wednesday:- Risk 6247 (R44 high)

Above and market is moving higher...

Below and market is down 44 points, and could move more.

Ideally the best risk level to be trading longs would be around the R44 lows, because it's hard to be buying the R44 high today, because it matches the R87 spiral top which often pushes prices back down.

There is no high probability set-up today, even though I'm looking for a move towards the 5-day 50% +, the higher open today still has risk attached to it trying to BUY the top.

The swing down on Tuesday from highs into the R44 lows (last bar of Tuesday), and this range bar needs to complete on Wednesday for the first risk level @ 6247 to be formed.

I'd like to see a lower open so that I can trade upto 6247, and then hope it can break higher...

Once again the R44 spiral point on open and expectation is that it will move a minimum 44 points in either direction.

US markets look supported after 'hook' days playing out on Tuesday. (full report later)

DOW E-mini Trading 18th Dec 2007 part 2

This is the price action that I wanted to see on Tuesday, a test of lower support and 5-day range, and see how Tuesday closes.

A 'hook' inside the Weekly 50% levels, and I favour a move higher into Friday, with most probable continuation of downtrend next week.

A failure to close above and....full report later.

DOW E-mini Report 18th Dec 2007

December 50% level is the trend guide :- Bearish

3-week cycles and 3-day cycles:- SELL

Weekly trend:- continued weakness will move down into the lows, as shown.

Tuesday's trading is going to set-up the direction of the rest of the Week.

Weekly report:- " highest probability pattern would be to see lower prices on Monday, break below the Weekly 50% levels, but the next day 'hooks' back inside, this then becomes support and prices rise higher into Friday"

There is a push lower on Monday:- DOW is back inside support @ 13299 (not a 'hook')

E-mini is still trading below Weekly 50% level. (potential 'hook')

Price action today is important because a failure to close back inside will probably send US markets down the next day.

Trading below Weekly 50% levels is bearish, and there is no reason for any 'Hook' day to occur, but if it does, then it becomes support on Wednesday and expectation of higher prices on Friday.

If this occurs then there is a good reason for Aussie market to continue upwards and back towards higher levels.

Forex GBP/USD 18th Dec 2007

GBP moving into a 2-day counter-trend move upwards towards the 5-day 50% levels.

No probability trades on Tuesday, I need to see it move to either extreme before trading again.

The only probabilty trade was Monday's swing point but it failed to reach entry levels.

SPI Trading 18th Dec 2007 part 4

12:35

Market breaks December 50% levels and moves straight down into December low support.

Weekly pattern is bearish, but there is a gap on the upside that needs to be closed.

That closure is only going to happen if US markets have follow through on the UP side, or from a lower open next week, as it rise upwards from support and back into January 50% levels in 2008.

The exact same pattern when US markets reversed off November lows.

At this stage December lows are valid areas of support.

Tuesday has an UP bias with a random length.

Island reversal anyone?

Only if US markets ‘hook’ back inside Weekly 50% levels on Tuesday

SPI Trading 18th Dec 2007 part 3

11:50

Stopped at breakeven @ 6135 on 6th trade

7. re-entry R11 reversal @ 6146 Partial exit 6165 (+10) exit 6172 (+16) Next r44 high


2nd upside 44 range completed for today @ 6174.

Tuesday can go much higher, as part of a reversal day, or its going to consolidate around the December lows of 6171 for rest of today.

No more trades today.

SPI Trading 18th Dec 2007 part 2

11:00

Market continues down into the December low;- following the breakout out of the 5-day range yesterday @ 6394 and into the 5-day lows today @ 6119.

Today I'm look for counter-trend move but it doesn't look that way, even around December lows.



First entry based on the open of the trading day and R11 system:- looking for a counter-trend move upwards

1. Spiral point 6217 (r44)

Entry 6219 (stopped 6212) (-7)

Market reverses down into first Support zone of 6171 (December lows)

2. Entry R11 reversal @ 6176 (stopped 6169) (-7)

3. Entry R11 reversal @ 6120 Partial exit 6126 & 31 (+6 +11) breakeven stop 6120 (0)

4. Entry R11 Reversal @ 6115 Partial exit 6120 (+5) breakeven stop 6114 (-1)

5. Entry R11 Reversal @ 6118 Partial exit 6127 (+9) exit 6143….(+25) R44 high)

6. Entry R22 reversal @ 6135 Partial exit @ 6150 (+15)

(breakeven stop) now looking for next R44 range or double R22


The intra-day cycle has turned around, so hopefully any up swing can continued, using cycle as re-test and support, for any more trades today….

I was looking for a 44 point move today, and I got it with the reversal upwards today, but I did it the hard way.

Hopefully market continues upwards as part of the Tuesday reversal....

When I analyse my Trades today:- the first 5 were against the trend, and I was lucky that some had at least a 10 point follow through.

The best trade was the last one because it aligned with a change of intra-day cycles and a 22 point reversal for entry.

SPI Trading 18th December

9:20

Monthly support disappeared with the close of the Weekly timeframe last week, and it has headed straight down towards the December lows.

Monday's expectation was a potential of a down day, with an UP day on Tuesday. The expected move was down into 6394 and then reverse back upwards.

However, once the 5-day range lows @ 6394 broke, the market moved into a trending day (breakout random trading length as it move from one higher timeframe level into the next), much further than I expected to move over 1 day.

Ideally, any reversal back upwards this week would be towards the Weekly low breakout of 6351, but that is going to be heavily influenced by what occurs in US markets.

Today:-

There was no ‘gap’ trading on Monday, as the R87 was still moving down from Friday.

Today there is a ‘slight’ gap. That is enough for me to look for counter-trend moves upwards today, based on the R87 and R44 spiral points.

But it’s not anywhere near support. The first support zone is 6171 (December lows)

There are no high probability trades other than using today’s open as a Risk level, and trading either side of it, and hopefully get some follow through either way of a minimum 44 points+

Note:- Important Quarterly level @ 6251 (50%), which often provides major support/trend guide in the SPI (my version of the 200 day M/A)

E-mini DOW trading 17th Dec part 4

Early support @ 1467, but failure around the previous Weekly 50% level @ 1476, and reversal.

With prices below 1467, then the market path for the Weekly trend is to head down towards the lows, as shown.

The only way this is not going to happen, is if Tuesday 'hooks' back inside and closes above 1467.

Full report later...

E-mini trading 17th Dec part 3

Entry 1467 partial exit @ 1473 and moving stops to below todays lows.

Next exit 1485... (going to bed)

E-mini trading 17th Dec part 2

ES has moved down into Critical support (Weekly 50% levels @ 1467)

Above and expectation of a reversal back towards the 5-day 50% levels.

Below and markets are heading lower and following Weekly trends below December 50% levels.

Note: previous Weekly 50% level is going to be a trend guide (1476) today. If 'long' look to partial exit around 1475-76 and move stops below lows, with the expectation of price heading up.

Reversal and break of 1467:- bearish pattern trading below (blue channels) 1464.5