SPI Daily 29 October 2009 recap

"SPI completes the move down into the 3-week lows, but it's too early to be looking for longs from this level until this week completes (Friday)

There are 5-day breakouts in US markets so there is an expectation that the trend will continue down.

Today:- At this stage the SPI is trading around support zones but below Thursday's 5-day lows (mixed patterns)

Resistance spiral filter @ 4615"

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SPI Weekly and 5-day pattern

SPI completes the move down into the 3-week lows, and there is still an expectation of lower prices towards 4398 by Saturday.

These 3-week levels are robust support zones in up trends, but not so much when 3-month cycles end, as I’m expecting these levels to fail and continue down towards the monthly 50% levels.

This should also be helped by 5-day breaks in US markets on Wednesday and price trading below the 5-day lows in the SPI on Thursday @ 4607

Today:-

Early rise into resistance levels @ 4615, and then confirmed with R21 spiral stops below 4607 to trade the R42 completion down into 4576 and the 3-Week cycle lows.

At the start of October if you recall, my expectation was a short term pullback into the 3-week lows for support and for a move upwards in October to complete the 3-month cycle tops as part of the breakout pattern from July and into October.


This played out precisely.

Once the 3-monthly cycle was completed (October highs), these 3-week lows are first target pullback zones, with SET-UP A favouring a move back down into the monthly 50% levels by Saturday/ Monday.

Doesn’t leave much room for another 200 point fall with 1 1/2 days remaining until the end of the month, but it can happen.


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