A week ago I wrote: "Last week I wrote: "It looks like the market is still pushing to go for a new long term high. The index is now that close that probably this will happen." Yes, we have a new long term top. The top is exactly at a historical 261.8% Fibonacci price projection (2167) from the bottom of 02/11/2016. For me this is the small long term expected higher top. We should now expect a long term reaction down. The stochastic RSI is topping with a (very small) negative divergence. The first target will be 2120 followed by the 50, 100 and 200 simple moving average (around 2000)."
The past week was a consolidation of the Fibonacci target reached at 261.8%. There were only small moves and the index is closing the week just a fraction higher. There are a number of technical reasons why we should expect a retracement. The stochastic RSI is topping and turning down. The is a small negative divergence between the higher top in price and a smaller top in the stochastic RSI. Price is bouncing against the upper side of the volatility channel. Price is far away from the averages. Technical price downward targets are at 2120, 2040 and 1950.
Sylvain Vervoort http://stocata.org/