Last week I wrote:
As I wrote last week "From that point, an up correction towards the upper side of the pitchfork and the upper side of the BBS band was started. I assume this is the end of this short time reaction...". That was a correct assumption with the S&P 500 moving down the past week from Monday till Thursday. Friday created a pullback from the support of the S1 pivot reference of the month. A first wave 3 (3.1) down has been created. Logical now would be some more pull-up towards the upper side of the down moving pitchfork and the upper side of the BBS channel. After that correction, I believe there will be a further move down towards the 200 day moving average around 1960 and next the S2 pivot level and the 161.8% Fibonacci target at 1920.
As expected, there was a further correction move up to the upper side of the BBS channel, with a first reaction down on Friday. We have a retracement for wave 3.1 between 38.2% and 23.6%. This is a large retracement. More than this there is a good chance that a new top will be created. For a further down move, there better will be no more up move the coming week. If the index moves down the coming week, we should expect a further move down towards the 100 and 200 day moving average around 1960 and next the S2 pivot level and the 161.8% Fibonacci target at 1920 the coming weeks.
Sylvain Vervoort http://stocata.org/