From the historical point of view, two times in the past broadening wedge patterns have been broken and prices have retraced in a sharp sell kind of correction before continuing on another bull cycle. So this could happen again, considering current price action as much as macro and TA issues, this could likely happen again.Thus breaking blue trendline (broadening wedge on 2000-2013 formation. Think of it like a big monthly headfake from a charting point of view, trapping bulls on the way.
Various simple yet effective points to consider:
- Divergence on SPY showing signs of weakness
- Metals and miners are showing strength and i think, from a technical point of view, this should continue until stock market has its first drop
- 1709 price mark is a clear Fibonacci retracement from 2009 Big cycle, 2011 Medium cycle and 2013 small cycle that all arrived to completion.
-Low readings on ViX
Conclusion:
We know for sure prices are correcting on Mid and Small cycle, from a technical point of view this should break steepest green trendline 1 and 2, making prices hit target#1. On the other hand, end of big cycle has to retrace for low of trending channel (lower green trendline) and technically break in order to start again a new cycle. this target should be 1392, 1316 or 1222/1190. so between target#1 and this trendline some swings should be in the game for the incoming pattern.
Some last details :
----Targets will depend on characteristics (intensity and speed) / causes and solutions of economic issue and should not be set in stone before we see first stages of selling cycle an materialization of the underlining issue.
----Even the most extended target, 1200, looks like a moderate to aggressive sell on the monthly chart, but nothing that could make prices go deeper.
Good trading and GL
Various simple yet effective points to consider:
- Divergence on SPY showing signs of weakness
- Metals and miners are showing strength and i think, from a technical point of view, this should continue until stock market has its first drop
- 1709 price mark is a clear Fibonacci retracement from 2009 Big cycle, 2011 Medium cycle and 2013 small cycle that all arrived to completion.
-Low readings on ViX
Conclusion:
We know for sure prices are correcting on Mid and Small cycle, from a technical point of view this should break steepest green trendline 1 and 2, making prices hit target#1. On the other hand, end of big cycle has to retrace for low of trending channel (lower green trendline) and technically break in order to start again a new cycle. this target should be 1392, 1316 or 1222/1190. so between target#1 and this trendline some swings should be in the game for the incoming pattern.
Some last details :
----Targets will depend on characteristics (intensity and speed) / causes and solutions of economic issue and should not be set in stone before we see first stages of selling cycle an materialization of the underlining issue.
----Even the most extended target, 1200, looks like a moderate to aggressive sell on the monthly chart, but nothing that could make prices go deeper.
Good trading and GL