Last week I wrote:
"Last week I said: "The Friday pullback is I assume the start of an up retracement for a wave 2 correction towards the 50 day SMA, a 50% retracement of the wave started from the top 3.16 and the PP pivot level". This is clearly where we are now. Have we reached the top of the wave 2 retracement? We have a hanging man reversal candlestick pattern, but we need a confirmation the coming week to be sure the reversal has started. Indicators seem to be in favor for a further up move, but that is not abnormal with a retracement in a down move. "
It looks like the indicators were right favoring a further up move. Already Monday the possible hanging man candlestick reversal was not confirmed showing a further up move towards the R1 pivot resistance of the month. Since that was the only resistance there, it was too weak to stop that move up. And believe it or not we have once more a higher top with wave 3.17. However, we are closing the week below the previous top. We also see a step down candle pattern. And we may have a nice double top reversal pattern. So, at least I expect some downward reaction now. One thing is that the move is still convergent between price and indicators, that may be an indication that the final top has not been reached yet.
Have you noticed that my BBS Band Break System used on the weekly chart, took a long trade August 17 2012 at 1418.16 and that we are closing now at 1988.44 on August 22, 2014. A profit of 570.28 or 40.2%.
Sylvain Vervoort http://stocata.org/