S&P Weekly and 5-day pattern
Thursday's break of the 3-day cycle lows followed a lower Weekly close within the 5-day range.
S&P 500 continued down in a lower Friday close, which was a random pattern.
Either Friday's lows were going to support the market, or price was going to continue down and break the lows and close around the the Weekly 50% levels.
Friday's price action has changed my view for next week.
Weekly report out later
SPI Weekly and 5-day pattern.
Price moved below 4713 and completed precise 42 point range down into Friday’s lows @ 4682
As pointed out in last Week’s report:- a choppy 5-day pattern with price moving down into the Weekly 50% level by Friday.
In theory the trend should continue upwards and follow higher highs into December.
Ideally using Monday and a Weekly open to validate the support
The only concern with Buying support on Friday and hoping the trend would rise next week is the price action in the S&P 500 and break of the 3-day cycle lows @ 1097.50
If the S&P 500 follows a similar pattern of moving down into the Weekly 50% level, then that about 200 points down, which puts the SPI around the November 50% level once again.
US markets may or may not move down on Friday.
Normally you can align the price action in the SPI with the S&P to pre-empt the move in the SPI, in this case up. However, the price action in the S&P 500 is conflicting, with yesterday’s break of the short-term support levels @ 1097.50
Whilst the DOW at this stage isn't showing signs of the same short-term weakness, which might actually see an UP day on Friday.
SPI Weekly and 5-day pattern
There are two patterns taking place this week in the trend.
1. price is rising towards the November highs
2. As pointed out previously, a 5-day consolidating pattern with a bias to drift down into a lower Friday close.
This morning’s set-up was based on rising upwards from 4766 to complete the Spiral range @ 4787.
Once price had completed the move, then it was simply a case of understanding the price action:- either price continues towards Wednesday’s highs
Or price hits resistance and reverses down as part the consolidating 5-day pattern into support.
Today was simply trying to take small chunks out of what the market was trying to do, and keeping out of trouble.
At this stage the SPI continues to remain in an UP trend but in a sideways pattern.
In last week’s US report…..
"Even though there is an expectation that price can continue higher, that might not happen next week, as there is a possibility of another 5-day sideways pattern.
The most robust pattern for any higher moves towards would be a choppy 5-day sideways pattern with the bias to drift down into the weekly 50% levels by next Friday...
And then continue higher the week after that using support"
What we are seeing is the SPI follow that price action, remaining in a tight sideways 5-day pattern, whilst US markets continue to rise.
Normally next Monday would open around the Weekly 50% levels and then continue higher using Support nito November highs and then December's highs:- 2-month wave pattern within the new 3-month cycle.
However, it’s the price action in the S&P that’s going to dictate whether the SPI follows another move upwards next week, because the S&P is now nearing my upper 4th Quarter targets.
If we starting seeing the S&P 500 moving down and the SPI below the weekly 50% levels, I’d be extremely careful with any long positions coming into the last month of the year.
S&P Weekly and 5-day pattern
SPI Weekly and 5-day pattern
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