As the saying goes for this blog "The monthly trend will last for months to years". This trend is true to form and has closed this month on a consistently bearish note since Dec. 2015 regardless of the rally the markets has had recently. The candle has closed above its lower BB line which is not considered at an extreme, and so we should watch now the 75 month MA sitting at 1577.95, we can see that it has found the level where the 2000 and 2007 topped out. This level is now the support to consider with a possible 1600 major support by the time price meets with the moving average. I would gather that it would have to move sooner than later or the monthly moving average would be at risk to overthrow these tops as the months passes.. Below this level is the 200 month MA which sits at 1338.75 currently, so we would need to watch the 1400 level as price has found significant support / resistance here.
While the ST and PA is still biased to the upside, the risk of an acceleration down is still low but not impossible. Remember that these rallies we have in the markets is what I consider an up trend in a bearish market. We won't know how much on edge the market is in until we see the volatility become erratic. My hope is I can be able to tell you before the market makes its move. With prices still in OB territory I would say that the bulls are safe for the time being, and as some analyst have said, "this might be a good time to reduce exposure in a down turning market".
SEN: Bearish
ST: UP
PA: UP
Impressive as the down turn has been the past two days, we should not jump the gun on any short entry. We do not have a confirmed signal from the ST and PA, at least not tonight. Perhaps tomorrow might be a different story.
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