A week ago I wrote: "Unfortunately I could not write a comment last week. I had a heart attack and was in hospital. A lot better for the moment, but fast feeling tired, it will take a bit more time to recover. My comment a couple of weeks ago was correct expecting a first low around 1830 for the construction of wave 3.2 down. Starting a recovery past that point. It looks like there is more room for a further up retracement. Probably to the level of the S2 pivot resistance and a bit further up to the S1 pivot level, the 100 daily average and price resistance around 2000. But there is a convergent move between the index and the stochastic indicator. This means that most probably we are now getting a correction for the last wave down, but a continuation of the down move once this correction finishes. The next longer term down target is 1740 and 1600."
As I mentioned last week: "It looks like there is more room for a further up retracement. Probably to the level of the S2 pivot resistance." This was also the level of a 50% retracement of the wave 3.2 down and the resistance of a previous gap in the index. And yes this was the point reached the past week. There is little room for a small further up move, but we should expect the coming week(s) a continuation of the move down for a wave 3.3 down. First target is 1740. The index and Stochastic RSI are building a hidden divergence with lower tops in the index and higher tops in the indicator. Generally this means we must expect a continuation of the move down once the correction wave 2 is completed.
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Sylvain Vervoort http://stocata.org/