Last week I wrote: "Last week I wrote: "The week closed higher, but failed to break resistance. Possibly the index will hit this resistance once more before continuing the move down for the creation of wave 3.3.". This expected up move happened the first half of the week, followed by the move down the end of the week. Finally closing the week slightly lower. We now have a 123 correction wave with a confirmed bearish harami candle pattern. This up correction is most probably an extended wave 2 correction for the large move down end of August. We now must expect a further move down for wave 3.3. The minimum target is around 1850, this is the S1 pivot support of the month, the previous low wave 3.2 and a Fibonacci target. The stochastic RSI is making a convergent move, basically indicating a further move down after the up correction.".
The (mainly Eastern) bulls were fighting to keep the index at high levels, but lost again the past week with a lower index. The only up closing day was on Monday. Thursday the index reached a previous low level, a Fibonacci target and the low side of the BBS channel. With the support from previous lows, the Fibonacci target and the low side of the BBS channel, a trading channel is formed. This may force a move up inside this channel before a new low for wave 3.3 is formed. However we must expect a further move down to the S1 support pivot target of the month, the low side of the volatility channel and the 1850 Fibonacci target the coming week(s).
Sylvain Vervoort http://stocata.org/