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
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