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DOW E-mini Trading 4th January part 2

US markets heading down towards the January lows.

Expectation this week of a lower Weekly close and a continuation down on Friday....

Both markets trading below their Yearly Balance points...

The highest probability pattern for this to happen was a re-test of the 5-day 50% level before heading down.

I actually though (repeating patterns) this was going to occur because it happens so often, and this week price hasn't tested the 5-day 50% level all week....same price action what occured in Forex on Friday (GBP/USD).....read below

(Full Weekly report later)

Forex GBP/USD 4th January 2008 prt 3

GBP continued upwards into the 5-day 50% level, and reversed back down following the Weekly trend down.

This was the price action I've been looking for this week, as the next high probability
pattern:- Re-test of the 5-day 50% level and continuation of the Weekly trend..

Forex GBP/USD 4th January 2008 prt 2

GBP continued down into the Friday lows and now swinging upwards towards the 5-day 50% level @ 1.9848

Donot short trade above 1.9875 (breakout)

DOW E-mini 4th January 2008

US markets:- Expectation of a lower Weekly close this week.

However, after Wednesday's continuted sell-off, the expectation that price would 'naturally' try and rotate upwards before heading down on Friday......

The rotation upwards on Thursday didn't evenutate but was an inside day, if the market is going to close lower on Friday (lower Weekly close), then price should swing up into the 5-day 50% levels and reverse back down...

Resistance 5-day 50% levels in both markets.

Note: if Friday's 50% level is breached, it can often move upwards to the previous 5-day 50% level (Thursdays) before heading lower.

No high probability patterns for position traders, that occured on Monday's sell-off and continued break-down on Wednesday.

Friday is for day traders.

SPI Trading 4th January part 5

12:50

R44 low completion and the continuation downwards.

If price breaks the 3-day lows @ 6295 again, then expectation is that is moving down into the 5-day lows @ 6245, which matches the Quarterly 50% level.

This was my morning expectation of a lower Weekly close after the failure of the 5-day 50% level...

Partial exit 6329, and exitted last contract @ 6305 to be neutral for today...

Forex GBP/USD 4th January 2008

GBP heading down following the monthly Dynamics, with the possibility of price moving down towards the January lows:- First Reference is the Quarterly .618 @ 1.9504

December support has dissapeared with the shift in Monthly timeframes.

Break of Wednesday's lows and price action is following the Daily dynamic ranges, as each day makes lower lows following the Weekly trend down.

With the expectation that price was moving lower this week, the best trade to re-capture the down-trend was a re-test of the 5-day 50% levels, and then trade down the next day, which didn't eventuate

With a lower Weekly close this week, the first expectation next week is a rotation back into the trailing 3-day highs...

SPI Trading 4th January part 4

11.18am

SPI rotating in 22 point waves above the 5-day 50% level, but i'm still looking for the rotation down of 44 points...

first trade stopped out @ my trailing stops (entry price)

re-entered @ 6354 and partial exit @ 6344 again and holding....

Breakeven stops from entry...

A break of the R22 (trio lows) @ 6336 is going to be a more valid break

SPI Trading 4th January part 3

10:37

5-day 50% level @ 6338 currently supporting the market....

Ideally I want the R44 rotation down to complete, and continue down into close...

I can't trade longs unless it's rising upwards from lower spiral points...

However, the longer it is supported above 6338, the more probability it will rise into the 3-day highs

SPI Trading January 4 2008 part 2

10:05am

SPI pushed up early completing the R87 range @ 6347...

I wasn't expecting such a push higher, but it didn't surprise me to see the 87 point range complete either.

This is the New Risk level for Today 6347:- Above and price is moving back towards the 3-day highs to close out the weekly trend higher on Friday. (also above the 5-day 50% level)


First R11 Reversal and Entry Shorts @ 6354

Partial exit 6342 (R22) (moved to breakeven stops from entry)

A higher open and move down from the R87 spiral top has the potential to move down 87 points from swing highs....

Next partial exit is double R22 and hopefully continue lower into Friday..

Note: Whilst price above the 5-day 50% level, the weekly trend has the potential to head upwards.... ideally I want to see 6341 break and head down, and not head towards the 3-day highs...

SPI Trading 4th January 2008

8:00am

Yesterday completed the 'gap' closure from the 5-day lows and into the 5-day 50% level.

Thursday's trading was a higher probability pattern using 'gaps'. As pointed out it was the first 'gap-probability' trade since November, however today isn't so clear cut on the direction and what trend Friday is going to take.

Friday is about trying to pick the direction of the Weekly trend:- often a rotation into the 5-day 50% level can send the market down into a lower Friday close.

Risk 6291

A move down early into 6291 will put price back under the 3-day lows, which can send the market down another 44 points towards the Quarterly 50% level @ 6246 , and much more.....(daily range random length)

6291:- is an each way bet, because a lower R44 spiral can often attract buyers and actually move back upwards towards the middle of the 5-day range once again, and we have a flat sideways Weekly timeframe.

In conclusion:- The first trade isn't easy becasue there is no high probability pattern to trade the open...does it move up, or does it move down to complete the 44 points @ 6291 before deciding the direction?

I would like to favour the price pattern of the 5-day 50% level failure and continuaton down into a lower Weekly close.

Don't trade longs below 6291...

DOW E-mini Report 3rd January 2008

Expectation weekly trend would push lower this week, with the 2nd break confirmed on Wednesday.

My expectation is that the Weekly trend will continue down this week, but along the way price will try and rotate upwards.

We have already seen this occur from Wednesdays lows, with the expectation that price will swing back into the 5-day 50% levels.....

Risk levels in both markets are the 5-day 50% levels.

These are my resistance levels on Thursday.

Looking at statistical patterns:- a down-trending weekly pattern can often
re-test the 5-day 50% level before resuming the downward trend

SPI Trading 3rd January 2008 part 3

15:39

A lot of consolidation around the 5-day lows today, and with the late up move expectation that 2nd gap @ 6324 should go close to filling.....

Forex GBP/USD 3rd January 2008

GBP hovering above a major drop with the 3-day lows still supporting price.

At this stage it is hard to see any major upmove occuring during this weekly timeframe, if it was going to happen yesterday was the most likely day.....

Yesterday's trading was choppy, there was some early support around the first 90 pip low where I was buying it looking for a completion of the range and move into the 5-day 50% level.

Then another push down before some more support around the next 90 pip low, and it wasn't until Support had reached and the third 90 pip lows aligned that price is now consolidating around these levels....

Each way bet on Thursday's trading:- below Wednesday support and next level down is marked, but with three 90 pip spiral lows I favour a rotation upwards into the 5-day 50% level before any 'down-trend' is going to continue this week.

Therefore:- Thursday would need to rise up into the 5-day 50% level and stall, before trading shorts down from a higher Friday open using the 5-day 50% level as resistance.

SPI Trading 3rd January 2008 part 2

10:05am

SPI opened much higher than expected.

Didn’t leave much room for any upside trades.

Pushed down early into an R22 lows (Premium report:- look for a 22 point move against the trend before any upside moves)

Push down into the 5-day range lows of 6261 (major Risk level)

Expectation now that 6295 gap will hopefully close…

Long Entry 6264 (added 6270)

Partial exit 6280

Next exit 6293 (first Gap Closure)

Holding 1 long with breakeven stops from entry.. @ 6270

SPI Trading 3rd Janaury 2008

SPI opening lower around very important levels in the market, both the Quarterly 50% level and Yearly Balance point.

We have seen US markets fail their Yearly Balance points, and have trending down days, and it's going to be a very important support zone today.


Today we have Gap trading....

It is the first time since November that there are gaps in the market using the Primary Range 87 points. This favours upside trading, with two gaps to be filled @ 6295 and 6324 (maybe tomorrow)

When traders look at the December drop last month, they would naturally think there are gaps on the downside, but when you reference the R87 range there wasn't any gaps, it was continuous 'selling' down from each Spiral point. (Described in the book)

Today is the first Gap since November and I favour trading longs.

Support 6238-46

Intra-day Resistance 6295 (44 points upside)

I won't be trading longs below 6238 if there is any sustained selling today....

Note: Price action is currently following the Dilernia Principle of a 2-monthly wave pattern lower.

The SPI hasn't been below the Yearly balance point since 2003, and it hasn't come close to this level in nearly 5 years, so it's an important level and trend guide...

DOW E-mini 2nd January 2008 part 3

Trending down day once Wednesday support failed.

DOW moving down into .618 of the monthly range @ 13054 finding some support.

If this is a trending 'down-week', then there will be some rotation upwards, but will be driven down by the 5-day 50% levels (full report later)

DOW E-mini 2nd January 2008 part 2

US markets have continued down following the Weekly trend down, confirmed with the break of Support.

DOW now moving into Yearly Balance point @ 13157, whilst S&P is below it.....

Weekly report 30th December:-

"This week’s expectation was a lower Weekly close, this was confirmed by the failure of the 3-day lows on Friday. A lower Weekly close this week, has the potential to send the market down into another lower Weekly close.

And at this stage with price trading below all higher timeframe 50% levels and the 3-day SELL cycle, my expectation is that price will be under pressure early next week.

Looking for a push down into 13304, a break of this and expectation that next Week will push much lower. There are ‘Drops’ in the forward Weekly timeframe which also favours further downside.

Note: any push down next week will see markets down towards the Yearly BP @ 13157"

Forex GBP/USD 2nd Jan 2008 part 4

GBP still trading above the 3-day lows, and my view is still for price to rise upwards towards the 5-day 50% level and hopefully to continue higher.....

My earlier trade was stopped out, but with the push down and then hook back above support I've re-entered with the expectation that price is moving higher.

Re-entry 1.9857 (stops 1.9831)

Partial exit will be the around the 90 pip high (1.9093), with stops moved to breakeven from entry and then hopefully it can continue higher..

DOW E-mini Report 2nd January 2008

S&P Cash will open right on the Yearly Balance point. (Weekly chart)

This level is extremely important for Primary Trend. It has only spent a brief period below this level in 2005.

Expectation on Monday that price would be under presure and likely path would be for both markets to head down in 13304 on the DOW and 1474 in the ES.

These levels are this week's support:- robust bullish price action would need to bounce off here and then confirm a close back above the Weekly 50% level, which matches the January 50% levels.

Until price is back above January 50% levels then the trend remains down.

High Risk trading longs below this week's support on Wednesday.

SPI Trading 2nd January part 6

15:02

Re-entry 6401

partial exit 6389 next exit 6371 to be neutral

Forex GBP/USD 2nd Jan 2008 part 3

Support @ 1.9853 failed

Entry 1.9856 (stopped out 1.9835)

Price looks to be heading down into the channels lows.. (no reverse trade- neutral position)

SPI Trading 2nd January part 5

12.05

Entry 6402 partial exit 6394

looking for R22 reversal next exit @ 6389

stops breakeven from entry..

6392 is Weekly 50% level..

If stopped out on breakeven I won't trade again today, with the expectation price is heading up into an R87 high @ 6422...

SPI Trading 2nd January part 4

11.13am

SPI pushing upwards into the January 50% level @ 6443.

Currently price is in a 3-day BUY cycle and above the Weekly 50% level @ 6392.

Personally I wasn't expecting this up move today because price was coming down from the R87 spiral top on Monday, so my expectation was that 6339 would be a valid risk level either way, but more likely to move down in the 3-day lows.

I didn't think it would move 87 points upwards (6422)

Forex GBP/USD 2nd January part 2

Extremely important support zones on GBP currently valid as it rises upwards from the 3-day lows, the blue channel support, and the 90 pip lows.

90 pips upwards and it matches the 5-day 50% level, price needs to continue above this and move into a 2nd 90 pip move for a move back to Monday's highs this week, as it rotates back towards January 50% level.

A failure around the 5-day 50% level and a 90 pip down move would put any view of rotation back up open to Risk, if it breaks the 3-day lows.

SPI Trading 2nd January part 3

10:10

Exitted @ 6366 to be neutral positions.

SPI Trading 2nd January part 2

10:05

Higher open than expected @ 6359 and looking for the market to push down and complete the 44 point range from Monday @ 6339.

1. Entry short 6344

Looking for a continuation down from 6339 and head back into the 3-day lows @ 6295

Stopped 6348

2. Reversed into long 6348 (rising upwards from R44 low and R11 reversal

Partial Exit 6356 (r22) high

Stops breakeven from entry @ 6348, next Exit 6366

Potential move down into 6295, will be a move back below 6339 today.

SPI Trading 2nd January 2008

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Welcome to the New Year, and Happy Trading....

8:20am

SPI Daily chart:- Trading below Weekly and Monthly 50% level. (Bearish)

3-day cycle BUY:- Confirmed bearish pattern will be a break of the 3-day lows
@ 6295, and first expectation will be price coming down to re-test Quarterly 50% level @ 6246

Higher Timeframe support 6246 (Quarterly 50% level, and Yearly Balance point)



Today:- I don't know where the market will open, US markets moved down on Monday, as expected...

The Risk level is going to be the R44 low from Monday @ 6339. This could be a resistance zone and then continue down following the R87 range completion @ 6296

When we look at the R87 range rotation, these patterns occur frequently throughout the year when the SPI consolidates, but it won't last when the SPI moves into its next trending pattern.

87 points down matches the 3-day lows @ 6295

Support 6295 (3-day lows and 87 points down)

The 3-day lows and 87 points down often provide a robust support zone, but this mainly occurs when price is trading above higher timeframe 50% levels.

My only expectation is that price is coming down to test the 3-day lows today, a break below and it's going to test the Higher timeframe support @ 6246

If it comes down and tests 6246 today, this support depends how US markets re-act on Wednesday because of some very important levels. (Full report later.)

Because below 6246 the expectation is the Australian Market is heading down into January lows, as it follows the Dilernia Principle of a 2-monthly wave pattern lower.

And then the potential to move back towards 5700 during this Quarter, as it follows the monthly dynamics lower in February.

The overall trend in 2008 is going to be clearly defined by the Yearly balance point of 6246

Forex GBP/USD 2nd Jan 2008

GBP moved up into the Weekly 50% level and reversed back down into the 3-day lows.

Price has held the 3-day lows, and the cycle is still a BUY.

Any UP move is going to rise from this level if it is going to move towards January 50% level.

A down move like this from the Weekly 50% level back into the 3-day lows is a repeating pattern.

Price is rising upwards from a 90 pip spiral low, 3-day cycle lows as support, and the blue channel lows.

Traders should have a very good idea on Wednesday how the overall trend is playing out.

With January pointing lower than December, and December support disappearing, GBP can go lower in this month.

Don;t trade longs below the 3-day lows..

Forex GBP/USD 31st Dec 2007

Bounce off October 50% level, rally upwards into November highs, reversed down into November 50% level, sell-off from December 50% level down into December lows, and now a rotation back upwards towards January 50% level before the next monthly trend develops.


Ideally I would like price to still come down into the 5-day 50% level before the next trend upwards develops, as it rotates back towards the monthly 50% level.

Daily Resistance 2.004

intra-day Risk the 90 pip spiral top @ 1.999

No high probability trades for Monday.

SPI Trading 31st Dec 2007 part 3

11:52

Market Reversing down and into an R44 low from the Higher open today (Risk 6373)

Price is trading below all higher timeframe 50% levels, the only thing that will confirm further weakness is a break below the 3-day lows, taking out last Week's lows.

If this is the case then the expectation is price is coming down into the Yearly balance point, as described in the Weekly report.

Exited last contract @ 6338.

Random price action after an R44 completion:- it can swing back up, or continue down into another range, similar to last Monday.

Normally I would look to BUY the R44 spiral point lows, but not today…

Happy New Year….

SPI Trading 31st Dec 2007 part 2

10:20

SPI coming down from Friday’s R44 spiral top @ 6373.

Reversal expectation could move down 44 points, or be supported around 6353 (Weekly BP)

1. Entry 6365 R11 reversal Stopped 6371

SPI then moved back up re-tested 6373 (risk)

2. Entry 6367 Partial Exit 6357

Leaving 1 lot open with breakeven stops from entry, Exit 40 points down from swing highs

If stopped out I won’t trade again today, early NYE… it won’t surprise me to see 6353 and 22 points down find buying support…

SPI Trading 31st Dec 2007

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

Please read the SPI Weekly Report before proceeding...

Last Trading day of the year, and today's closing price will confirm all the levels shown in the Weekly Report.

Last week my expectation was that the market would stall and come down for 2-days before heading higher on the 3rd day.

This was because of 3 things:-

1. change of the 3-day cycle will often come back down and re-test the break
2. A higher Weekly open will often reverse-stall down for 2-days
3. the Weekly 50% level @ 6377 was resistance.

This week only 1 of those things could push price down, and that is the Weekly 50% level @ 6392.

Today there is no high probability trade other than using the R44 high @ 6373 as a Risk level.

Below and expectation market is moving down into a small range day.

Above and it's heading upwards, which aligns with a continuation of the trend from the 3rd day BUY from Friday.