Last week I wrote: "Last week I mentioned: "The target for the coming week is closing the gap around 2380, possibly down to the PP pivot of the current month and the 50-day simple moving average." Tuesday the market closed a fraction higher, creating a new top. However, Wednesday the gap was closed and the index even went down a bit further closing one more gap in this daily chart reaching the low side of the volatility channel. From that point there was a pullback to the upper side. The larger move down on Wednesday created another gap in the daily chart. Possibly this one will be closed before the downward move continues down to the first target around 2325. Please read my comments on the weekly chart and monthly chart for more information regarding the longer term view."
Last week I mentioned: "The larger move down on Wednesday created another gap in the daily chart. Possibly this one will be closed before the downward move continues down to the first target around 2325." Not only this gap was closed the past week furthermore, the index made a new long term high, reaching the R1 pivot resistance of the Month. I now expect price to rise still a bit higher but on the other hand, I still am convinced we are close to a correction. It looks like the index builds a negative divergence with higher tops in price and lower tops in the Stochastic RSI indicator. Please read my comments on the weekly chart and monthly chart for more information regarding the longer term view.
Sylvain Vervoort http://stocata.org/