the first alarming sign has been the short dip in the beginning of the year. With this correction the dynamic in the trend has been broken.
In the following the index managed to rise to higher levels, even forming new ATH´s - but with less dynamic. The RSI signalled soon enough that there is a divergence between the price of stock index and the strength within.
I had drawn a target zone where I expected the maximum high of the index before it´ll turn. It was a result of the ascending wedge, taking the spread of the beginning of the triangle and extrapolating it to the top. It has been too bullish - the index only touched this zone and turned back before entering it.
This was signalling that there is not enough momentum for a continuation of the upside trend. The red circle shows this point of return.
The lower supports (fib retracement 100, and two swing trend lines) haven´t been strong enough to stop the downtrend until the index touched the lower limit of the very long ascending trend channel. Due to some consolidation on this level the longer positive trend hasn´t been broken yet - but it is in danger.
Taking Elliot Waves in consideration we´ve probably seen the corrective wave A and will now enter in wave B. Wave C will lead the index to ~ 2400 points. In this case the overall positive trend will be definitely finished and we will have entered the bear market.
This is no trading advice!!!!
PS: this is the longer trend
In the following the index managed to rise to higher levels, even forming new ATH´s - but with less dynamic. The RSI signalled soon enough that there is a divergence between the price of stock index and the strength within.
I had drawn a target zone where I expected the maximum high of the index before it´ll turn. It was a result of the ascending wedge, taking the spread of the beginning of the triangle and extrapolating it to the top. It has been too bullish - the index only touched this zone and turned back before entering it.
This was signalling that there is not enough momentum for a continuation of the upside trend. The red circle shows this point of return.
The lower supports (fib retracement 100, and two swing trend lines) haven´t been strong enough to stop the downtrend until the index touched the lower limit of the very long ascending trend channel. Due to some consolidation on this level the longer positive trend hasn´t been broken yet - but it is in danger.
Taking Elliot Waves in consideration we´ve probably seen the corrective wave A and will now enter in wave B. Wave C will lead the index to ~ 2400 points. In this case the overall positive trend will be definitely finished and we will have entered the bear market.
This is no trading advice!!!!
PS: this is the longer trend