As expected, within the passing week the market has taken out the High of 8844.8, and closed the open gap above (8891.3-8937.75) that held since March 2015.
The fact that the Weekly bar ended as a bearish pinbar not touching, not to mention penetrating the upper Bollinger Band is a sign of weakness. On the other hand, the fact that the market has started the week with an open gap and kept the gap opened by the end of the week, the fact that the last Daily bar didn’t close below the short term sentiment line – the 8 EMA, and even above the Weekly Open price – are all signs of strength. So, for those who look at the Weekly chart and see a potential Evening Star pattern ahead, it is currently not a quality signal for that, at least not yet.
Any upward reversal Daily bar such as a pinbar, which doesn’t close the open gap from below, and which is followed by a Daily thrust up, is a good bullish signal to challenge the Weekly High at 8968.7 once again. Notice that the Weekly bullish OKR signal mentioned in the previous review is still valid, and the target for it is around 9100.
On the bearish side, only after closing the open gap 8809.65-8848.45 it is wiser to look for some bounce and sell the follow through price action down. The target for this move shouldn’t be lower than the Weekly pinbar’s 1:1 amplitude, i.e. 8728, a clear support level.
For the longer term, we should have in mind that the market has made the Monthly reversal since March 2016 without any major correction after taking out the 2 Month LHBL at 8654.75. So a big correction on Monthly terms can be developing here, but currently, it is certainly too early to assume that.
Disclaimer: Anyone who takes action by this article does it at his own risk, and the writer won’t have any liability for any damages caused by this action.