Last week I wrote: "It looks like we are completing a convergent move with lower index tops and a lower Stochastic RSI top. This means that the pullback of the past week is rather a correction and that the down move will continue now. The index reached the resistance of the PP pivot level of the month, the 50-day moving average resistance and previous price support and resistance. Ready to turn down continuing the down move. The first target remains as mentioned already a couple of weeks ago 2300. This is below the last low with the size of the first leg down from the top (red arrow), the 61.8% Fibonacci retrace, the low side of the volatility band and the 100-day moving average. Please read my comments on the weekly chart and monthly chart for more information regarding the longer term view."
After the first round French presidential elections it looks like most people believe Marine Le Pen will not win the second round to become the new French president. But remember few believed that the English would vote for a Brexit. The up move the past week was clearly a reaction to the result of the first round French Presidential elections. I advice to close or cover long positions because, Marine Le pen winning unexpectedly the election next week Sunday, may send a big shock through the markets! Worse than the Brexit! Business will not be as usual until after this election. It looks like it has not much sense to try to predict how the markets will look May 8, 2017 this moment in time. Pure technically I would expect that gaps will be filled with a downward move the coming week(s). The new downward target is now at 2317, close to the last bottom, the low side of the volatility band and the 50% retrace. Who knows, the direction of the normal technical move expected may be a sign what to expect May 8! Please read my comments on the weekly chart and monthly chart for more information regarding the longer term view.
Sylvain Vervoort http://stocata.org/