The passing week has made a deep correction for a long time, starting the week in a relatively huge gap down, closing two open gaps from below. In the rest of the week, prices bounced upward, closing eventually on the Daily 8 EMA short term sentiment line. For the Daily timeframe, it is not a sign of strength at all.
Yet, if we look at bigger timeframes, the Weekly bar is leaning on the sloping Weekly 8 EMA, looking rather strong than weak. Besides, the Weekly bearish pinbar of the previous week that didn’t touch the upper Bollinger band, which was the only real bearish indication so far –has approximately reached its target of 1:1 with the huge gap the passing week has started its action with.
Currently, in the Daily timeframe and above, there is no any good signal for the bearish side, and there are much more chances to see the market tests the upper side of the range again, where new signs of weakness might give a clue as for the midterm direction.
Remember also that the first countertrend signals in case of strong momentum on the higher timeframe are very likely to disappoint. In this case it is always safer to wait for the second consecutive countertrend signal or some good confirmation for a real sign of weakness that the market reveals.
Look for bullish (intra range) opportunity in case the market is going to test once again the 8720-8730 area. Pay attention that the open gap from above is not closed yet, and should serve as a resistance at least once more.
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.