SPI Daily 28th January 2008 recap

"SET-UP A:- 4th week reversal back into February's balance point
and then continues down into the lows from next week, as per Weekly
Report.

This often occurs when the market has moved 3 weeks in one direction,
the following week can often close in the opposite direction:- higher Weekly close.

SET-UP B:- There is a 3-week low breakout from last week @
3426, price has come up and is now retesting the break.

This often leads with a higher daily open and a continuation of the
down move as of TODAY, and makes it's way down towards the Weekly
lows later this week.

Wednesday:- 2 plays simply based on 3409

Trading below 3409 and bias is to continue down towards the lower
channels @ 3335, as part of Set-up B.

Above 3409 level results in a 'HOOK' pattern.

3409 becomes support and moves upwards 44 points:-continuing towards
the Weekly 50% levels"

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SPI Weekly and 5-day pattern


Today started with the higher open selling off from 3426 moving down into
44-point lows. Whilst price was below 3409 the expectation was a continuation down into 3335.

Except the market reversed off its 44 point lows and HOOKed back above 3409.

I was looking for a retest of 3409 for a move towards the highs, except
the HOOK pattern didn't pan out. That pattern would have provided
the perfect long set-up:- text book pattern.

But once price started to trade above 3426 (previous Weekly lows),
these levels became support :- confirmed with intra-day spiral lows rising
upwards into the Weekly 50% level.

We can also see the higher Weekly lows in the forward Weekly timeframe, this goes back to my view of this week rising upwards after 3 weeks of down trends.

Whenever there are higher or lower timeframe channels in the forward timeframes (Dilernia Drops), the bias is for the trend to continue in the same direction
into Friday.

However, any continuation upwards this week has to be helped by the US markets following the same pattern.

Because at this stage price has simply moved back into the Weekly 50% levels, which often occurs at the start of the new Weekly timeframe.

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