SPI Monthly and Weekly
Thursday:- more consolidation and rotation back into the 5-day 50% level.
Make no mistake about it the SPI will end up around those lower levels in 2009, and probably lower :- SET UP A
However I’m still looking for the move upwards into the First Quarterly 50% level before any new down trend continues:- SET UP B
This is simply based on price rotating back into the higher timeframe midpoints before the next trend continues lower in the new year.
For every breakout price will normally come back and test the breakout in the next Timeframe and then continue with the trend. A perfect example was October breakout and then the rotation back into the November 50% level, and then Drive down into lower lows in November.
The down trend in the 4th Quarter ceased once price moved back above the Weekly 50% level, and has moved in a tight 3-week sideways pattern, which eventually will breakout of.
As mentioned before, any up-trend won’t occur until there is a breakout of the 3-week highs.
Next Week gets interesting on the SPI as there is a divergence of the Weekly timeframes and a shift in resistance to below (brown).
Resistance drops, therefore the downtrend can continue lower next week if trading below 3526, which is part of the bigger picture.
But it also can be the spring board for the rotation upwards, which is what I’m looking to happen and complete the retest of the breakout and the rotaiton back into the higher timeframe central zones.
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