If the next session closes on its lows, but not necessarily below the Weekly 50% levels, then the next day might be the start of the market continuing down.
Monday: public Holiday in the US
SPI Weekly and 5-day pattern.
Even though I’m bearish on the market, based on where price was opening on Friday (above the 50% level) @ 4887, I viewed Friday as a 2nd day stall with the next leg down potentially beginning next week.
No set-up to trade shorts on open as price didn’t match intra-day resistance levels or a spiral top until around 4912-19
“I won't discount the SPI actually moving upwards and completing a R42 high.
More often than not a down trend will continue from a R42 high and also resistance.
That resistance is now the 5-day 50% levels (4882-87).
Therefore a R42 point rise can match resistance levels.”…...Intra-day report 12:00 pm
Short-term buying support after 3pm and swing back into the 50% levels (R42 points up.@ 4881)....
And Friday ends up a 2nd day stall pattern, and above the Weekly 50% levels.
The potential next leg down will be based on the price action in the US markets coming into the long weekend.
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S&P Weekly and 5-day pattern
US markets remain supported but currently around resistance levels, and at this stage the market is choppy around these highs in January within the daily range.
I’ll have a fair idea if there is going to be a reversal pattern next week by the price action on Friday.
SPI Weekly and 5-day pattern
First day of a 1-2 day counter-trend, remaining in a tight trading range between the levels in the 5-day pattern @ 4878 & 4909.
Price action is above the Weekly 50% levels, below the January highs, and currently in a 3-day sell cycle
As this stage this is viewed as a short-term up move and a 'stall pattern', with the potential of more weakness if certain patterns align in the US markets align over the next 2-days.
S&P Weekly and 5-day pattern
SPI Weekly and 5-day pattern
2-day reversal has completed in the 5-day lows on Tuesday.
As per my Weekly post, my expectation was to begin this week with a short-term reversal pattern (2-day) with the first confirming pattern a move below the 5-day 50% level.
This occurred on the 2nd day @ 4919
2nd confirming tool on a potential reversal pattern will be a close below the cycle lows @ 4880, but this has seen support Tueday.
SPI Monthly and Weekly
As per my end of year post around 4956-68 is a major resistance level in the Aussie market in 2010, and I have a view of a larger trend reversal other than the usual medium term monthly reversals we normally see each Quarter.
Resistance was tested overnight in Sycom and subsquent 2-day reversal back down.
Around these upper levels in the market I just can’t be bullish, unless the market begins to consolidate above 4956 for a number of weeks. Therefore the view during this Quarter is to make its way back towards the 50% levels in January
The reversal pattern in the S&P 500 isn’t as robust as a normal reversal pattern goes, because the confirming pattern on Monday found support on the 5-day 50% level when it should have closed below:- break and continue on Tuesday
Anyway, the initial view was a 2-day reversal, and 2-days doesn’t make a major reversal but it can lead to a potential continuation of my view over the next 5-days.
A R42 down move would have placed it below the 5-day 50% level, as part of the first confirming pattern, but once the S&P 500 in the US started to push above 1142 during Sunday hours the SPI followed the same price action into Monday's highs.
Even though I respect the trend around these upper levels in the market, I can't trade longs around resistance levels.
If US markets continue to move higher (above 1142), then the SPI will try and make its way towards 5018.
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