Last week I wrote: "Closing the week some one percent higher. If the index turns down now, we have another negative divergence between the index with higher tops and the Stochastic RSI indicator with lower tops. On the other hand there seems to be room for at least another 20 points up move. If that happens the negative divergence will disappear. I see different Fibonacci targets, some point to the current level and some go about 20 points higher. It looks like we have to follow up, waiting for a long term reversal. Please read my comments on the weekly chart and monthly chart for more comments and the longer term view."
A bit as expected, closing the week higher, reaching the last current Fibonacci target and the upper side of the up moving pitchfork. As I mentioned last week, we lost the negative divergence and we now have a convergent move between the SRSI indicator and the index. Basically this means we should now expect a short term reaction for the last wave up and not yet a longer term reaction. I estimate that a reaction of some 60 points can be expected, maybe after a further small move up. Please read my comments on the weekly chart and monthly chart for more comments and the longer term view.
Sylvain Vervoort http://stocata.org/