Yes, this market is very , and it will remain (that is something what we have learnt in last 3-4 years as a natural side affect of ). But as everybody knows it will pull back at some point within the trend. I've been also waiting for the pull back trigger signal for some time now, so as we have a major mkt moving US NFP data today, which can influance global risk sentiment, let's see what is the picture and what are the chances now?
- setup is , no signs of exhaustion really until Price can not even come back below Tenkan Sen. No Kumo overshade either, Chikou is in open space. Kijun Sen is slowly catching up to Price.
- The more we look at it, the most likely is that we see high degree being built. These short term rising within the major tend to break eventually on the lower side, simply because as time passes, the probability of keeping the same pace of buying is decreasing. The move since January was pretty straight and vertical.
- Heikin Ashi had only one day of hesitation, followed by two green candles. The only minor signal that worths attention is the haDelta, which shows negative divergence. This means the pace of Price increase ( momentum) is decreasing, and getting less strong compared to the previous move from 3050 to 3400, when haDelta printed its top.
- setup with only minor pull backs (called as Kijun retests). Bulls won't worry, until Price holds above Kijun Sen
- Short term support and break point is now up to 3520 - 3540 area.
- DMI/ADX is still , with some minor drop in .
- Heikin Ashi signals very short term sentiment is getting tired, mkt might be ready for a minor pull back to Kijun and again. HA candles with small body, haDelta turning down.
As a basic rule, correction and counter trend has chance to start only if Price makes a lower low, and breaks some relevant supports. Looking at the 4H chart, this should take some more time, so for now just keep our eyes on the 4H supports, and on daily Tenkan Sen (3562 at moment), and most importantly on the wedge! Sooner or later the time will come.
Any short trade attempts before a real sell signal has to be considered as a top hunting. It may work, but you must know its risk-reward is lower, so play only in small if you play it at all!
This strong USD will fundamentally kill it sometimes anyway. I mean even if the general big picture remains bullish in equity mkts, US will underperform and move kind of sideaway whole year. Similar to what happened to EUSTOXX50 in last years.