A week ago I wrote: "Closing the week a fraction higher. Last week I mentioned: "With lower lows both in the index and the SRSI indicator we have a convergent move. Basically this means that price is making a correction. If this is the case we are probably finishing a B-wave and now expecting the C-Wave down. A and C waves are generally about the same size. If this will be the case here, the index can go down to 2400 to finish the C-wave" But, perhaps I overlooked the other possibility meaning, the index is not making a first ABC correction but, a 5-impulse wave down for a longer term wave A correction. If that is the case the index now makes the wave 2 correction. Since a wave 2 correction can retrace up to 100% of wave 1, the index may go further up to the last top. That will be confusing because you will be thinking that the up move is continuing. If the index moves further up now, the chance that we are making a correction wave 2 becomes more lightly. Looking at the Elliott count in the weekly chart, even making a higher top is not impossible. All rather confusing for the moment. A close follow up is needed! Read my comments here on the weekly chart and monthly chart for more information regarding the longer term view."
As expected last week the index finished the wave B up correction on Tuesday and started the move down for Correction wave C. As I already mentioned with the weekly chart, the B retrace is rather large which possibly means the the correction is not a B-wave but, rather an impulse wave 2 correction. For now I just leave the current annotation because, both expect a further move down. The first target is 2450. If it is a wave 3 that is coming, the first target will be lower to around 2380. Note the negative divergence (1) higher tops in price and lower tops in the SRSI indicator that announced the first move down from top . Next there is a convergent move (2) that made us expect a correction wave B up. And now another convergent move with lower tops or a hidden divergent move that informs us to expect a continuation of the previous down move. There is resistance for an up move with static price resistance and resistance of the PP-Pivot level of the month. Better be prepared for a continuation of the downtrend. Read my updated comments here for the weekly chart and monthly chart for more information regarding the longer term view.
Sylvain Vervoort https://stocata.org/