Last week I wrote:
I mentioned last week: "I would not exclude a new small higher top the coming week". And that is what happened, with an index high a fraction below the last top wave 3.22. Once more there was first a correction back to the PP pivot level of the month, but the up move from there closed the week a fraction higher. We are still in a longer term distribution trading range. Considering the long term up move, the distribution may still take more time. The index moved out of the down moving pitchfork, but should be considered normal since the index moves within a horizontal trading range. For now we should expect the index to remain in that trading range. Even a small new top is possible. However, I assume that this distribution phase will end with a larger move down. Be careful taking long positions now. I assume we will have a correction the coming week within the trading range.
The index closes the week a fraction higher, enough to create a new top wave 3.23 with only small moves the whole week. Monday, US markets are closed. Distribution is ongoing with I guess a lower index the coming week, falling back into the trading range. There will be support from the R1 pivot level, the low side of the BBS band, the 50 day average and the PP pivot level. I believe there is a good chance that this distribution phase will end with a long term move down. Looking at action/reaction, I expect a first reaction within a couple of weeks. HERE you can find my latest comments on the EURUSD forex pair.
Sylvain Vervoort http://stocata.org/