Last week I wrote:
"Last week I wrote: "It looks like the S&P 500 wants to agree with my 1850 target I was predicting for a long time and that the 1849.44 we reached the previous week was not yet 1850 and so it made 1850.84 this week. This makes a nice double top and with a small higher high a new wave 3.9. For now I would consider this high as the upper side of a trading range where 1815 is the low side. If the turn down from top 3.9 is confirmed the coming week, we also have a divergence between a higher top in the index and lower tops in the indicators. So, again we may be at the start of a longer term down move, possibly confirmed in the weekly chart also. A lower index is expected the coming week. US markets are closed on Monday for Martin Luther King Jr. Day.".
As expected we got a lower index. The past week the double top was confirmed with lower prices with large downward candles on Thursday and Friday. The upper side of a new downward pitchfork formed resistance. A historical downward Fibonacci projection between top wave 3.9 and the wave 2 correction before, gave a 161.8% target at 1793. This level, also the S1 pivot support level was reached on Friday. The expert turned black. We have a new downward wave 1. For now there is room for a further move down towards the lower side of the up moving pitchfork, the 100 day simple moving average and the 261.8% Fibonacci target. Watch your open long positions, this may be the start of a long term correction.
Sylvain Vervoort http://stocata.org/