- setup is back to neutral
- The long term wide is still active. Price got close to (act. at 3125)
- Heikin-Ashi signal is swing .
- is counter , as both the convergence line and signal line are below zero.
- 3095-3150 is a strong zone, marked by , Kumo (forward Senkou B) and 100wma
- EWO is neutral too. (ticks to green, but it did the same in November 2015)
- Previous idea of possible small top did not work. setup is still
- However we have warning signals too, which suggest the risk/reward and P/L upside of long positions from this point may be limited:
1. possible formation
2. Heikin-Ashi signals some exhaustion at 3095, lower level of . Candles shrink, haDelta crosse down, today haOscillator crossed down as well
3. haOscillator also has some negative divergence compared to price action (price higher high vs haOscillator lower high)
4. EWO is , but could not post a higher high, despite price moved above previous local high. For those who like wave counts, this suggest that the 5th is done, or will soon be done.
5. is extremely low. Looking at ATR (14, ), its value is stuck below 50 points.
I don't say we have a massive sell signal to go short in big. What I say is that at this level, and in the zone above Bulls will have hard time to push further up. This is not time to buy. Rather time to reduce exposure and take profit on longs.
Market has just fallen in love with the idea of further ECB easing. Bond mkt prices another rate cut and announcement of more and extension. In fact this is something, which the EU Bank index(es) would hate at the maximum. ECB policy is completely killing banking business, if not puts the whole financial system to a huge risk of collapse! Guess what, STOXX50 is not the DAX! This index has more bank weight. What's more, it contains Spanish and Italian stocks. Do you read the news about Italy? Well, I would not be very comfortable to hold and exposure there (neither in S-Pain ;-) ) for the rest of 2016.