Last week I wrote: "Last week I wrote: " Note the negative divergence with a higher top in price but, a lower top in the Stochastic RSI indicator. I assume price will move further down the coming week." Friday the index fell to a low of 2868 finding support at the S1 pivot support, the 50 day simple moving average, the low side of the volatility band and at price support and resistance levels. There is a good chance for an up pullback the coming week but, I expect a continuation of the down move after that. First down target is around 2800. Read my updated comments here for the weekly chart and monthly chart for more information regarding the longer term view."
Last week I wrote: "Note the negative divergence with a higher top in price but, a lower top in the Stochastic RSI indicator. I assume price will move further down the coming week." Monday and Tuesday there was some pullback but, Wednesday the index passed my expected target of 2800. Thursday there was another large move down reaching a low of 2710. Friday finally there was some recovery. I think we finished the impulse wave 3 down and are now making an up correction for wave 4. The convergent bottoms in the index and the SRSI indicator confirm that there is a correction coming, not a reversal. I assume this correction will go up between 2800 a 61.8% Fibonacci retrace and the bottom of previous waves 4 and (4). This correction may go up to 2830 where there is resistance from the S2 Pivot support and the 200 bar average. After this correction I expect the index to turn back down to make lower lows.

Sylvain Vervoort http://stocata.org/