If you move this parallel down, you get a lower channel resistance, again with perfect matches 20/Jan/2016 and 11/Febr/2016 lows.
The pattern repeat is just something really amazing. Remember my "W"endetta call last year? (see linke below) It happened again, with only difference in second low, which was a slightly higher low compared to Sept/2015 higher low of the pattern.
As I have warned in last few weeks, amarket may seem to be overbought, or valuation look "unreasonably" too hig , but until you have a proper setup to sell, it is just guessing and top hunting. And for a proper high probability sell we need minimum one thing: Kijun Sen to catch up closer to price.
let's see the details of the setup and support levels:
- setup is , with obviously no corrective wave at all (!) during this so far 15 % rally from the bottom! Same as in October 2015. It had looked overbought for a while, just like now. Price has been too far above Kijun for some time now, but instead of retracing, market is making new highs, which makes Kijun Sen slowly catching up.
- Heikin-Ashi candles are with no doubt. But watch how massive negative divergence haDelta has built!
- EWO is also , but it is again back to an extreme high level, and most likely it will make either a , or a lower high compared to the 18/March peak.
- is only 1 %+ from current level.
- Supports: 2053 (Tenkan) / 2000 (Kijun) / 1975 (100WMA) / 1947 (Kumo - spot and also forward Senkou B)
Looking at the divergences and the fact SP500 is approaching a very important resistance ar 2090-2100, I don't think this pace is sustainable. Market for sure will not collapse, but could pull back to 2000+... funny thing is, that would mean a possible repeat continuation of the past pattern seen in November/2011.
- is , with lower Key support at 2053.
- Heikin-Ashi candle pattern shows short term momentum loss is possible.
- EWO has built a massive negative divergence. Wave momentums are less powerful, while Price is making higher highs (as I read elswhere, also is quite low).
It is time to get prepared for a counter short. Size should not be bigger than 1 risk adjusted trade unit.
When to sell? Simply use daily Tenkan = 4H support = 2053 as an entry trigger.
acceleration expected below 2045.
Braves can try some small top hunting here with 0,5 unit. Not more risk!!! Remember: "Markets can stay irrational for longer, than you can stay solvent!" Trading is all about risk management, and odds provided by setups!