A week ago I wrote: "Last week I wrote: The index will possibly close the last gap before continuing the down move for a wave 3." The gap was not closed the past week, I believe this is not a good sign. Furthermore, we had one more gap the end of the week. The index is now below the 100- and 200 day simple moving average so, maybe the last gap will be closed the coming week. I expect a small correction only. Price reached a 161.8% Fibonacci target. Here there will be some price support. Read my updated comments for the weekly chart and monthly chart for more information regarding the longer term view."
The index reached the 161.8% Fibonacci down projection and a price support I indicated last week. This was the end of a first zigzag wave-a down. From that point we saw an upward correction wave ending at the R1 pivot resistance of the current month and price resistance at the level of the top of the previous intermediate wave up. If this is the end of the up retrace, there will be a hidden divergence with a lower top in price and a higher top in the indicator. That would confirm a continuation of the move down. You can also see that the 216.8% downward Fibonacci target coincides with the wave-c having the same length as the wave-a (the red line at the right). All latest gaps are closed. Best guess is that we can expect a zigzag down now for a completion of correction wave-c. Read my updated comments for the weekly chart and monthly chart for more information regarding the longer term view.
Sylvain Vervoort http://stocata.org/
