S&P Weekly and 5-day pattern
Slow trading day with a upward bias, after Thursday's HOOK pattern.
With the March contracts running at a discount to the current spot futures and next week's expiry, this can often push prices lower.
However, whilst the March contracts are trading above the Weekly 50% levels, the expectation is that prices will continue higher next week, and follow the monthly dynamics
S&P Weekly and 5-day pattern
Wednesday’s higher daily close and failure to HOOK above the 50% level @ 1098 and I would normally look for a continuation of the short-term trend: - sell resistance using the 50% levels and a higher daily open on Thursday
If the S&P had closed above 1098 on Wednesday then Yellow support is used to trade longs, however that wasn’t the case.
Jobs data came out and this sent Thursday higher, and once above the 50% levels the pattern was to continue with the overall trend of the market.
At this stage the market remains supported after the initial 2- day reversal on Monday and Tuesday, Wednesday's 1-day counter-trend, and nowThursday's higher close above 1098.
S&P 500 Weekly and 5-day pattern.
Two day reversal in US markets on Monday and Tuesday and still trading above support levels in the higher timeframes.
There was a breakout on Tuesday therefore there was an expectation that price would push down into Wednesday’s lows.
Around Wednesday lows would often ‘revert’ into a higher daily close:- 1 day counter-trend day, which can often lead to a 3-day counter-trend day if a certain pattern occurs:- 'HOOK'
And a continuation towards the December highs
That higher daily close has failed to HOOK back above the key level @ 1098.
Because of this failure to HOOK, the next 2-days become random patterns using support and resistance levels in the 5-day pattern.
SPI Weekly and 5-day pattern.
Wednesday support and now a daily close below the December and Weekly 50% levels.
After my post on the 27th November.... of this week being a potential reversal of trend pattern, along with the US markets beginning this week with 2-down days, I now favour our market slowly unwinding and moving lower in the first quarter of 2010 (larger timeframe cycles and change of trend)
There hasn't been a breakout of support in US markets, and the only way I would get short-term bullish again is if US markets have a Daily HOOK pattern on Wednesday.
Therefore the resistance levels are now the December and Weekly 50% levels that have supported the market this week.
Note:- A Daily close below the 3-day cycle lows will change the 3-day cycle into a 'Sell'
This has occurred today, with the daily close below 4754.
That means that prices can consolidate below the December 50% levels for the next 2-days and then continue lower early next week once the 3-day highs catches up with price.
However, it can also mean a 2-day counter trend back towards the highs on Thursday and Friday... but that's only going to happen if a Daily HOOK pattern occurs in the US markets on Wednesday.
DOW Weekly and 5-day pattern.
Tuesday has followed the 2nd day reversal pattern, along with a breakout of Tuesday's lows.
The DOW hasn't moved as far as support levels, but the 2nd day reversal has close below Tuesday’s 5-day lows , which often favours more downside the next day.
Even though the expectation was that the first 2-days would move down towards support, I’m beginning to feel that trends are slowly unwinding and drifting lower in the first Quarter of 2010, as per Weekly report. (Larger timeframe reversals)
As pointed out in the most recent Weekly report, the only way I would get a ‘short’ term bullish again would be to see a Daily HOOK pattern back above the 50% level:- Higher Daily close above 10341
However, because of the breakout on Tuesday, I don’t see that happening on Wednesday.
Price is still trading above the higher timeframe support levels, but at this stage I would respect the trends of the lesser timeframe 50% levels and stick with the short-term trend.
DOW Weekly and 5-day pattern
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