Last week I wrote:
"We have a wave 2 down correction confirmed after the bearish Harami candle pattern on Monday. Support was found after a 50% reaction down to the 50% retracement of the last up move and at the same level as the top of wave 3.14. Indicators turned down after an extended negative divergence between the indicators with a lower top and the index with a higher top. We should expect a further down move towards the 50 day moving average, the S1 pivot support and the low of the previous wave 2 around 1925."
Thursday it looked like the expected move down started, but it was practically fully retraced on Friday. We have a hidden divergence with lower bottoms in the SVESRSI indicator and the index with higher bottoms. This is basically an indication that we should expect an index above the previous top 3.15. This would be a move towards the R2 pivot resistance and the upper side of the volatility channel. So, we still can expect to reach that magical 2000 level. But be careful, that will most probably be the end of a long term target, followed by a long term correction.
Sylvain Vervoort http://stocata.org/