Last week I wrote:
"In this shorter 4 day trading week we got as expected a correction wave 2 up, which is not finished. The up pullback is now finding resistance at the level of the monthly PP pivot level, the upper side of the BBS band and price resistance around 1870. The spinning top on the candle pattern Thursday may be the first sign that wave 2 is topping. If the index turns back down it is forming a head and shoulder pattern. The coming week may be very important for the future. Making once more another top? I believe turning down has a good chance.".
As I expected last week, the up correction wave was not finished. The index went further up to the level of the left shoulders. Now falling back to the PP pivot level of the month, the median line of the up moving pitchfork, the support of the 50 day average and the low side of the BBS channel. Moving further down now will create a hidden divergence with lower tops in the index and higher tops in the stochastic RSI indicator. This should lead to a continuation of the previous swing down to below the last bottom in first instance. You never know, but that is what we should expect the coming week(s).
Sylvain Vervoort http://stocata.org/