Last week I wrote:
"Last week I concluded: I do expect a reaction down. Tuesday there was a low of 1538, close to the 61.8% Fibonacci retracement over the last move up. But for now it looks like we are in a flat correction. That makes it difficult to predict what is coming next week. I must repeat what I mentioned last week: moving up past 1576.09 we will be at the long term highest high value. Passing this level with a closing price would mean the long term up trend will continue. Turning down would mean a long term down correction is started, which could bring the index down to below 650! Watch your long term long positions! I do not want to take any position now. There is I believe a 50/50 chance for a move in either direction.".
Looking at the daily chart it looks like the only way the index can go is higher. Once more we have a higher top with wave 3.8. However, I believe the most important for now is that the index is just a few points away from the long term high of October 2007. Turning down before that level or even closing the coming month of April below that level may be the sign for a long term large correction. Keep that in mind and protect your long term long positions. The expert turned green again, but I believe it is better not to have an open position for the moment. It still can go higher, but I do consider a long position too risky with the index so close to the long term high. More comments on the WEEKLY and MONTHLY charts. The total closed profit trading the index is 128.3% from the start in March 2009. We have no open position. The expert is green.
Sylvain Vervoort http://stocata.org/