The support line we discussed last week that connects the major 2013 peaks proved to be important as we anticipated. I would have liked for price to close above the 75ma on the Daily chart (1789.75), but it retraced by late afternoon closing below it. This makes me believe that any movement above this might only be temporary. The next level to look for is 1800 and 1815. These are based on today's rally from the lows when projected forward would have us at (100% rally) = 1800, and (161.80% rally) = 1815. I would like to see a rally to these targets but the momentum which is bias to the downside might alter these targets. Our general trend is still DOWN. So the trade should be to the downside. Our Price Acceleration (PA) is also biased to the downside.
MT: DOWN
ST: DOWN
PA: DOWN
Our intra-day signal is to the UPSIDE, this is why I am expecting a rally to continue earliest tomorrow. Once we hit the targets or near it we should start looking to see if our trends are still to the downside. If they are, then there is a high probability of a push lower.
Todays low hit the weekly 20ma. This is a good lesson on how to look for high probability targets. The red dotted line below is resting within a few points of the weekly 20ma line, and the more indicator convergence the better the odds. The lower targets to look for if price breaks the red dotted support would be the 200 DLY ma at 1702.06 presently, which is also where the Wkly lower BB is trending towards (currently at 1682.10).
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