Last week I wrote:
In my last week comment I wrote: "The index went with the lows on Monday and Tuesday a fraction lower, close to the 50 day average and the PP pivot support of the month. But that was it. Tuesday and the rest of the week was an up move, with a new up wave creating top wave 3.18. The nineteenth top in a row. Where will it end? We must now expect a further move up to the upper side of the volatility channel, the upper side of the up moving pitchfork and the R1 pivot resistance level of the month. Targets are 2030 to 2050. It looks like the long term reaction down is again postponed".
Is the start of the long term down reaction already back? The spinning top on Friday of the week before was confirmed on Monday with a larger negative candle. The index was falling back to the level of the PP pivot of the month, the 50 day average, the median line of the up moving pitchfork and the previous 161.8% Fibonacci target now giving support. What we can expect is a further move down to the 100 day average and the low side of the volatility channel. If there is a further down move, we must expect the index to move to 1900, the 200 day average, in about 3 weeks time. Friday brought an up correction closing the week above the 50 day average. This may be a logical correction because the index reached the 50% retracement since the start of wave 3.17. We are still in a long term uptrend, meaning we should not exclude a new higher high top wave 3.19. Fibonacci projections point to 2050 as the most expected value. Better wait and see what is coming next week before doing any trades.
Sylvain Vervoort http://stocata.org/