Weekly Index Reports now available (12th January 2008)

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FOREX GBP/USD 11th January 08 part 3

GBP rising upwards off The Quarterly lows @ 1.9504...

Nice rotation trade off those lows using 1.9504 (didn't trade it, had to go out to dinner)

But an entry and partial exit would have stopped you out on the first trade, but once back above 1.9504 and a 2nd trade would be in the money using support...

"You trade down into support, and you trade up from support..

You trade up into resistance, and you trade down from resistance....

Quarterly support 1.9504 price travels from the middle outwards, and rotates back inwards...

Next Week starts a new weekly timeframe, and we repeat the process:- trade UP and Down from channel extremes along with using the 5-day 50% level.."

FOREX GBP/USD 11th January 2008 part 2

GBP moved lower and is now into major support around 1.9504 and Friday's lows...

Don't trade longs below 1.9504

DOW E-mini Report 11th January 2008

US markets have found support around the January lows. These are valid support zones for this month, however the overall trend based on the Yearly timeframe remains bearish. And any upside moves this or next week are simply counter-trend moves within a larger bearish pattern

The first sign of validation was the bounce from Wednesday daily lows (HOOK), and then the crossover of the 5-day 50% level on Thursday and rally towards the 3-day highs.

A confirmation of the support would be a break of the Friday channel highs (3-day high cycle), with the expectation of a higher Weekly close towards the Weekly 50% level in both markets…..



Whenever the 5-day and 3-day channel come together like this, it gives a forewarning that a potential breakout is likely to happen, However it doesn’t say which direction the breakout will be.

If we subscribe to January support being valid, then the breakout would favor the upside. If it follows the overall bearish trends in the market, there is nothing stopping the market from breaking lower on Friday, and move into another downward close on Friday…

Therefore the 5-day 50% levels in both markets for Friday are going to be extremely important…because it’s going to clearly give traders an idea which direction the market is going….

And there is nothing to suggest that any breakout will happen on Friday either, and both markets consolidate on Friday and close in the middle of the range…

Scenario 1: if it bounces off the Friday 5-day 50% level and breaks higher on Friday then my expectation is that price will move into the Weekly 50% level, but rotate back down next week

Scenario 2: if it breaks Friday’s lows, let the market run it’s course and don’t LONG trade again.

Scenario3: And this is what I want to happen…

Page 63 figure 27 of the book…

A weekly close in the middle of the 5-day range has the potential to move into a ‘Weekly counter-trend’ move upwards (Next Week) :- 'Bottom-to-Top' trading week rising from the 5-day 50% level

There is less chance of a reversal back down if this happens, and there is a potential of a series of days that make higher highs into next Friday….

Let’s see how this Friday plays out…

Forex GBP/USD 11th January 2008

Weekly Trend down and whilst price is trading below the 5-day 50% level, then expectation is that price is making its way towards the Friday lows.

No High probability trades on Friday:- use the 90 pip spiral ranges to manage any trades...

SPI Trading 11th January 08 part 3

10:45am

Exitted last contract 6058

Support January lows @ 6054.....

The rest of the day is an open book....

Might: - Swing back up, or consolidate around the center of the range of the past 4 days like yesterday, or even continue down following the 5-day dynamic low pattern.. (yesterday's view (no probability patterns for rest of today)

Overall Weekly trend is down and can continue lower into Friday (high risk trading Longs below 6065)

No more trades today

SPI Trading 11th January 08 part 2

10:11

Push up early today into 6108:- spiral top and expectation of a push down...

Entry 6106 partial exit 6088 (R22 lows)

Stops 6110

looking for a continuation down into 6065.....

Exact same expectation as yesterday and the R44 spiral lows @ 6065.....

Next exit 6074.... and holding 1 lot to see how price reacts around the R44 lows @ 6065...

Any buying will come around that low and push it back above 6108 and head higher, or it's going to move into another similar price action as yesterday with further weakness into Friday....

SPI Trading 11th January 2008

9:15am

Resistance 6126 (Weekly breakout) (R87 :- 6129)

Above and expectation price is heading towards the 5-day 50% level @ 6171:- if this is going to happen I would think it would happen in the 2nd half of the day or overnight if US markets move higher on Friday (US report later)

Below Resistance and expectation that another R44 rotation will play out...(consolidating Weekly timeframe)

Keep an eye on 6060 (r44 spiral) for any 22 reversals off this level and taking out 6108.....don't short trade above 6108...

Don't go long below 6060 (below R44 lows) can't discount a lower Weekly close on Friday...

A move upwards from 6060 and break above 6108 (44 points up) has the potential to continue higher (2nd half of the day)

DOW E-mini Report 10th January 08 Part 2

Crossover and break of the 5-day 50% level is the first sign that support around the January lows has been verified.

Tomorrow ( Friday) the convergence of both the daily ranges together, gives traders a clear 'breakout' level for a continuation of the reversal back towards the Weekly 50% level...

Above that level on Friday and it's hold the longs into close....... (full report later)

If long I would partial exit around the both channel highs on Thursday

12955 on the DOW and 1438 on E-minis, and hold....... still the probability of Weekly timeframe closing around the middle of the range

FOREX GBP/USD 10th Jan 08 part 3

I dumped GBP just before rate news came out @ 1.9606

re-entered shorts @ 1.9644 stopped out @ 1.9661

Re-entered shorts @ 1.9654

partial exit 1.9623 (stops 1.9665)

Expectation that whilst price is trading below 5-day 50% level my view hasn't change.

Going to bed now, and hopefully i'll wake up happy..

looking for partial exits around 1.9580 and Thursday lows...

FOREX GBP/USD 10th January 08 part 3

Hits resistance and expectation that any follow through on the downside could move down into Thursday’s lows @ 1.9531 (not guaranteed)

Entry 1.9644 (stops 1.9661)

Partial exit 1.9611

Hopefully price remains below the 90 pip ‘spiral high’ @ 1.9630 and continues down into 90 pip lows (next exit zone)

With complete exit around Thursday lows (slightly before)

Note: reversal has moved .43 pips which often finds support, also above the Weekly channel lows @ 1.9603 which can play a support role...hopefully it doesn't.

BoE rate decision coming out today @ 12 GMT, please keep this in mind if trading GBP today, as it will go for a ride...

FOREX GBP/USD 10th January 2008 part 2

GBP has moved 90 pips off the lows back into Resistance....

If the market is going to swing back down, the 90 pip spiral top @ 1.9630 should be used...

don't look for short trading above the 5-day 50% level...

if there is going to be any reversal down it will probably come in during US trading hours, which is a few hours away....

Resistance 1.9644 (Wednesday Channel break)

DOW E-mini Report 10th Jan 2008

US markets supported around January lows, and expectation that US markets will consolidate around support for the next two days....

The overall trend is down, and my view is I can't see a major UP move in the US markets just yet.

Yesterday's push down into Wednesday lows was an important price pattern that suggests there is support around these January low's.

The 5-day 50% level is a trend guide for Thursday:- normally I would look to use this level to 'sell' down the weekly trend into lower higher timeframe levels, this might still be the case, but US markets have already completed the move into lower levels Weekly and monthly extremes.

Day traders:- trade on the side of the 5-day 50% level either way...if above traders should have a view that the Weekly timeframe could end up closing higher on Friday (my expectation in the middle of the 5-day range)

I'll get a better idea on US markets once this Weekly timeframe finishes on Friday, and where it closes will be important for the rest of this month.

Reporting season begins today in US markets..

SPI Trading 10 January 2008 part 8

14:40

Market supported around January lows @ 6054…

moved trailing stop @ 6080… (3 ticks above 22 point upswing just in case it reverses down from 6077 (22 point swing top)

After the failure of the R11 trio, I thought it was primed to move down towards the 5-day lows @ 5973, which goes close to matching the January .618 lows @ 5962…

The R11 reversal pushed the market down , but it now looks like the January lows @ 6054 is playing a support role today…..

No more trades today if stopped out… let the market run its course. (last SPI post)

SPI Trading 10th January part 7

12:30

This is my last trade:- R11 reversal entry @ 6073 (switched to shorts)

partial exit @ 6066 (R22 range) and holding into close with stops above 6084....

SPI Trading 10th January part 6

12:14pm

Re-entered longs @ 6076 partial exit 6083 & breakeven stops from entry....

This is my last 'long' today if it doesn't head higher now and moves down 11 points, upside is open to Risk.....

I think there is more chance of heading lower because of the R11 're-test' of the R11 trio, failure to break higher and then sell down into close.....following the break of 6073....

keep in mind there is no support in the market today until the next 5-day lows....

Note: there is no guarantee of any sell-off today, it could remain choppy all day, but I won't trade longs again...

FOREX GBP/USD 10th January 2008

GBP:-

Trend down and moving into a major support level around 1.9504-7, this is also matching the Thursday's low:- expectation of a channel breakout will often move towards the next channel extreme.

Resistance on Thursday:- either the Weekly lows, or Wednesday's channel break, but more likely to head down....

Don't trade longs below Support, and any upside on Thursday would be limited to around resistance levels...

SPI Trading 10th January part 5

11:50

SPI has moved down from an R44 spiral point and into a lower spiral point @ 6073.....

It has found support and moved into a 22 point counter-trend move off the lows/support....

After this 22 point upswing.... the rest of the day has a random outcome.....


I didn't trade longs off support on the first R22 reversal because of the Weekly pattern and system shorts

I moved into a 2 lot short around the 22 point upswing 6084 (coming down)

Short 6084 :- partial exit @ 6074 and 6069

Switched to Long's @ 6077 and stopped out @ 6071

No idea how the rest of the day is going to pan out:- it could remain choppy and remain in a 44 point range (Flat trading day under 6126)

Or it's going to sell down late in the day after this 22 point up swing taking out the lows and following the Weekly trend down....(basically no idea)

SPI Trading 10th January part 4

10:40

SPI coming down from a spiral top and moving into a critical level @ 6073....

Buying support (if there is any) will come in around this level...

A bearish Weekly pattern, which it looks like it's following, can continue down into the next 5-day lows @ 5973....

Don't trade longs below 6073 today

SPI Trading 10th January part 4

10:25

Stopped last on breakeven...

Even though I think the market is going to swing upwards, I can't move back into Longs because of the way price is now coming down from R44 spiral tops....

Going to let the market play it out for the time-being... (no system shorts so not shorting it either)

SPI Trading 10th January part 3

10:15

Next exit 6117 (r22 range) and holding 1 lot

Hopefully it continues much higher towards the Dilernia pivot @ 6144 and not turn down from resistance @ 6126

Personally I would have preferred this morning’s ‘report-scenario’ than this morning price action….

Resistance 6126-9 (gap closure and 87 points up from swing lows)

SPI Trading 10 January part 2

10:00am

Opened much lower than expected, but it provided a long trade on open….

Reason:- the R44 bar from yesterday has to complete @ 6112, also trading above yesterday’s 5-day low @ 6092…

Long 6102 partial exit 6111….

Random expectation now, it could swing down from the r44 highs @ 6112


Or continue higher into 6126 and keep on going…

Stops breakeven from entry after partial exit…and holding…

SPI Trading 10th January 2008

8:30

January lows:- Monthly support in a down trending market, with expectation that markets 'can' swing upwards this week, with any up-moves back towards the 3-day highs @ 6231, which also matches the Yearly balance points.

Today's higher open will complete the 'gap' closure I was looking for yesterday.

Today:- Critical level is going to be the Weekly lows @ 6126

It can be resistance today, and push the market back down....

A higher open 'spiral point' and 44 point down move will be an important level in the market for any upswing back towards the 3-day highs (back above 6126).

However:- keep an eye on 6112....

Basically:- a push down from 6126-9 into 6112 and move back above highs and price could easily continue higher... (22 points down and reversal)

The best longs will come from an R44 low, so I would like to think that price will move down into an R44 low and rise up higher:- highest probability pattern is to trade up from 'support' and 'spiral lows'

I also know that it might not play out as I would like today....

Upside swing:- 5-day 50% level @ 6173

Below 6126 and Thursday remains flat

DOW E-mini Report 9th January 08 part 2

Push down on Wednesday into dynamic lows...

Same Risk levels on Wednesday to be used on Thursday:- Weakness and expectation to follow Thursday's levels, as markets move into a lower Weekly close.

However:- Wednesday's push down into a lower low and 'swing-support', and movement back inside the Risk levels, and I'd be surprised to see further weakness in US markets this week.

Above Risk levels 12681 and 1398 and upside rotation/consolidation into the end of the Week. ...(Full report later)

FOREX EUR/USD 9th January 2008 part 2

EUR selling off on the 3rd day and moving towards the lower 'target'.... but expectation is that price is moving down into the Weekly 50% level.

Because we look at Weekly timeframes:- a 3rd day 'sell' from and higher Weekly open can come down into a lower Weekly close...(Friday- Random length)

Below Weekly close and the next level down is January 50% levels...

Note: Compare price action below on GBP and you can see that the ranges are greater, and the 'speed' of the movement is quicker than EUR.

That is why I prefer the GBP to EUR

FOREX GBP/USD 9th Jauuary 2008 part 2

GBP following the Weekly trend down towards the 1.9603...

Overall Weekly trend is down and can go down further... below 1.9603 and moving into extended lows into Thursday....

Below the channels lows on Wednesday and expectation price is moving lower into Thursday....

DOW E-mini Report 9th January 2008

US markets have moved down into January lows. These levels often provide support for a number of days before any reversal upwards... (breakout above the 3-day highs), which probably won't happen this week. At the earliest next week.

If these levels act as support, it's going to be a 3-day consolidating pattern.

Risk levels on Wednesday for both markets are...

DOW 12681 E-mini 1398

Below those levels and price will follow the daily lows down on Wednesday.

Any rotation upwards will be back towards the 5-day 50% level:- above that and the channels highs.

US begins reporting season on Thursday:- strong results and market will be back towards the Weekly 50% level.....

The Finanical sector is the biggest sector in most global markets, and this where the most concern is.... any bad news and it will send the market down even further during this quarter:-

Keep in mind Most Global Markets are trading below their Yearly balance points, so any up moves in the market is viewed as short-term counter-trend reversals within a bigger 'bearish' pattern.

Until price gets back above Monthly 50% levels, which might take weeks.

FOREX GBP/USD & EUR/USD 9th Jan 08

GBP/USD

Overall trend is down with any furthur weakness this week expectation is that price will push lower towards the Weekly lows @ 1.9063

This Week's expectation was that price would try and swing upwards towards the 3-day highs in the first couple of days. This occured yesterday, and whilst price is trading back below the 5-day 50% level, the expectation is that price will follow the overall trend down

The trend guide is the 5-day 50% level for the rest of the week, whilst price is trading in the middle of the range it can go either way:- follow the overall trend down, or follow the lower Weekly open back towards the 3-day highs. (no probability trades on GBP)

EUR/USD....

Euro is in an Up-trend, it's above all timeframe 50% level and has just completed a 2-day stalling pattern from a higher Weekly open... if the trend is going to move higher on the 3rd day, then price needs to move back above the 5-day 50% level and breakout above the high channel, and it resumes it's weekly trend upwards.

However, the close below the 3-day lows on Monday changed the cycle around to a 'Sell'.

When this occurs there is a 72% probability that the next day will move higher:- this was the case on Tuesday once it started trading above the 5-day 50% levels.

If the Euro is going to 'sell' down and move back into the Weekly 50% level, then it's going to happen on Wednesday (sell down on 3rd day higher open) push down breaking the 3-day lows...

If the EUR does sell off on Wednesday, the down day has a random length:- price rotation is towards the Weekly 50% level, below this and expectation is that price is rotating back into the January 50% level.

Personally I find EURO choppy and I hardly trade it. I much prefer GBP because of the larger ranges and seems to follow higher probability patterns (support/resistance) to the letter much more often than EUR.

SPI Trading 9th January 2008 part 6

11.55am

Sold last @ 6081..... (r 11 reversal)

a bullish price pattern would have moved above the R44 high (6086) and just kept going upwards without looking back....

it looks like the two 5-day ranges 6092 and 6044 are defining the range for Wedensday...

No more trading today..

SPI Trading 9th January 2008 part 5

11.27am

Partial exit 6075

Leaving 1 into close looking for a gap closure upside into 6126 (stops entry price)

A 44 point upswing has a random price action, it’s either going to swing back down and move into another consolidating pattern between the two 5-day ranges 6092 and 6044 and consolidate for today

or it’s going to move up a 2nd 44 point range from 6086 and into 'gap'

SPI Trading 9th January 2008 part 4

11:02 am

re-entry 6052 partial exit 6060

stops breakeven from entry..

5-day low @ 6044 is valid support looking for a 44 point rotation upwards

SPI Trading 9th January 2008 part 3

10:46

SPI pushed down into the 5-day lows @ 6044 and finding support.....

If it breaks 6044 (breakout) don't trade longs as it will probably head much lower..

Entry 6045 partial exit 6054

stops below lows (6043) hopefully it can swing back upwards (R44)

Keep in mind price is pushing down from an R87 spiral, a break of 6044 will probably send it towards 6010 (87 points)

Not trading shorts today,,,,,, if stopped out I won't trade again below 6044

SPI Trading 9th January 2008 part 2

10:15

Looking for some rotation upwards towards the Gap @ 6126 from lower spiral points on both the R44 and R87….

R11 entry @ 6078 (limit 2 contracts) Trading below Risk….

Partial exit 6089 (r22 high)

Stopped on Trailing stops @ 6079

I would need to see a matching system to trade longs again, the only worrying part is that price is trading below yesterday’s 5-day low that is capping the market @ 6092.

Not trading shorts unless it’s coming down from Spiral tops or resistance….

SPI Trading 9th January 2008

SPI Following most global markets down into the January lows for 2008.

Around these lows the expectation that price will find support, but any upside is going to be limited, and that's is going to depend on US markets reaction to their January lows on Wednesday.

US markets are into January lows, and the best that they can hope for is a 3-day consolidation pattern around these lows, with probability closing around the middle of this week's range on Friday. I'm not expecting a major 3-day reversal UPwards.

Below Those risk levels on Wednesday in the US, and it's following the Weekly Report levels back into August lows.(lower Weekly close)

SPI Risk 6084 (R87 lows)

Above and expectation is that yesterday's gap will close, below and it's following the next 5-day pattern lower.

Any rotation upwards today and risk increases around 44 spiral tops/ gap... (6126) Weekly breakout.

Gap closure and 44 point tops, and it's random price action, similiar to 6170 yesterday.

1. rising upwards from an R87 low can continue the swing rotation upwards (primary range completion)

2. a 44 point spiral top can also swing back down and follow the Weekly trend lower towards January lows & the 5-day lows @ 6044 .

Yesterday there was a high probability trade using 6210 and expectation of a reversal down into 6170 for price to move back into the 5-day range.

Today there is no clear direction on open other than using the R87 low @ 6084 as Risk...

DOW E-mini 8th January 2008 part 2

These are the critical levels (January lows) I wanted tested this week before any 2-3 day counter-trend move back towards the Weekly 50% level....(Full Report later)

Risk level for Wednesday...

DOW 12681
E-mini 1398

Forex GBP/USD 8th January 2008 prt 4

GBP pushed up into 1.9822 and now stalling....

Expectation of a reversal in the early part of this week back into the 3-day highs.... (lower Weekly open expectation of a reversal back towards the 3-day highs)

If this up move would have occured on Wednesday and 'a breakout' of the range I would look for a Weekly timeframe closing higher on Friday...

I would treat GBP as range bound for the rest of the trading week, as Wednesday's highs are now pushed upwards....

Note: Overall Trend is down with any further weakness and Weekly trend is to head back down towards the Weekly lows @ 1.9063

Trend guide for rest of the week is the 5-day 50% level

FOREX GBP/USD 8th Jauuary 2008 part 3

GBP/USD has moved up completing another 90 pip high....

This time price is above the 5-day 50% level.... you can leave 1 lot run into another double R90 pip run, or the upper blue channel highs @ 1.9822..

however, I'd be careful trading longs coming down from a .90 pip high and back under the 5-day 50% level on Tuesday, with focus on Wednesday for breakouts...

DOW E-mini Report 8th January 2008

US markets:- Trend bearish trading below all major 50% levels using higher timeframes.

Extremely bearish whilst trading below the Yearly balance points.

Expectation this week is coming into Support, before any reversal or short-term counter-trend move back towards the Weekly 50% levels...

Monday support has shifted lower and Tuesday support comes close to matching lower support levels in the Weekly and Monthly timeframes (Daily charts)

We can see Wednesday (tomorrow) on the DOW and the 3-day range drop lower to match the 5-day 50% level, which will interest traders on any reversal trades....

5-day 50% levels Risk guide on Tuesday......

the trader trading "principles of successful trading"

Book:-

"2005 I introduced and identified a ‘new’ pattern that has a statistically significant chance of price follow through. This was extremely important for short-term intra-day traders. There are a few market patterns that occur with such unbelievable regularity that you must become aware of them. No one, to my knowledge has engaged in more in-depth research (in this area).

Spiral-Points are simply support and resistance. It’s one of the most important elements of technical trading. Why? Because it eliminates most of the guesswork and allows the trader to make logical, well-supported trading decisions, rather than impulsive, emotion-driven choices.

Spiral-Points attempt to recognize such patterns by identifying entry and exit points based on True Range of the market. Spiral-Point Trading is the perfect tool for swing and momentum trading, as price moves from one point until the next.

What the Dilernia Model is for Trend trading, 'Spiral-Points' are for day trading.

What makes a spiral-point so powerful is that there will be a ‘spiral-point’ each and everyday. They are ‘probability-patterns’ that have a greater chance than 50/50 of repeating over and over again. Even though they function under ‘randomness’, it’s the Risk-Reward of the pattern that matters most.

Whenever a trader is confronted with a ‘probability-pattern’ then that individual person has to have a good grasp and understanding of what the risk and rewards are, and another trader confronted with the exact same pattern should have the exact same understanding. That is what makes a successful methodology, a method that makes consistent profit and protects capital.

Whenever a ‘spiral-point’ is formed it becomes part of a Swing trade or a Momentum trade because price has to move away the same statistical range before the next Spiral point is formed. These levels define ‘high-probability’ support and resistance, and like all support and resistance there is an expectation that price will move with the overall trend of the market defined by the Dilernia Model."

Taken from... " the trader trading "principles of successful trading"

**Above is the SPI daily chart (left) along with spiral points on the Right

SPI Trading 8th January part 6

12:25

SPI has moved down into the Weekly lows @ 6126...(Support for January is still lower)

These levels often provide support and rotation zones within the Weekly timeframe(5-days), but that is going to depend how US markets re-act to their own Weekly timeframe lows on Tuesday...(Full US report later)...

Any rotation upwards would preferably be traded on Wednesday than trying to pick lows in the market today.

FOREX GBP/USD 8th Jauuary 2008 part 2

Let's look at forward-modelling GBP/USD... (Intra-day chart of GBP aobve)

Weekly Trend is down and guided by the 5-day 50% level.

On Wednesday there are rises in the forward timeframe, this often suggets that the current timeframe (Tuesday) will have an UP bias, but that could be limited to around the 5-day 50% level.

What the interesting part is that Wednesday highs drop down, and close to the 5-day 50% level.

Therefore: - breakout traders will be looking how prices re-act to the Wednesday highs, because a breakout above would favour a Weekly timeframe that closes higher:- moves higher into Thursday range highs...

Wednesday's highs:- Resistance/ breakout..(trend defined by the 5-day 50%)

SPI Trading 8th January part 5

11.38am

Exitted last contract 6158.... (no more trades today)

Weekly trend is bearish and following the trend lower towards higher timeframe support zones