- setup is not , it is just neutral. This market has suffered a serious damage on the long term chart.
Price is back to the Kumo cloud, and trades above Kijun Sen and Senkou B (equilibrium level appr at 1985), but Tenkan (9 weeks average) still points down and is below Kijun. Also Chikou Span is still below past candles.
- Multiple resistances above price: spot Senkou A, horizontal resistance ard 2060+, and the previously broken uptrend line.
Theoretically the "W"endetta (W-shaped whatever... should we call it recovery, or denial ???) move still has some room left, so Price can spik a bit more to the pattern's measured tgt , which is again around 2060+, but this upswing action will likely start to lose its momentum in coming weeks.
- So far Heikin Ashi signal is , but haDelta/SMA3 may deliver a warning signal by the end of this week that Bulls face some headwind.
In fact to call this market strategic again, price should break back above 2100... well, everything is possible, never say never. However the probability of a turn down and a start of a real bear market is also relevant
I already wrote about the details in the complex analysis before. To add few more thoughts:
- This setup is NOT confirmed , just because Price is above the Kumo! It is biased, but might be only a counter trend (correction) against the weekly chart! For a sustainable setup and to validate a Kumo breakout, Price should move above 2085 - 2100 (previous highs), which would also deliver a Chikou cross above past candles.
- 2045-2060 may act as strong resistance ahead of Bulls. Looking at this cluster of possible downtrend line, top and horizontal supp/res line, I started to call this area as "Roof Top" resistance. I think Bulls may sniff into this loft, but I doubt they will find too much long term value there. The question is if and when market will sell this roof?
- To repeat: Heikin Ashi is still , but smoothed haDelta below already shows serious negative divergence compared to price.
We are reaching a point where long term players should really start to think about their equity exposure, and where Bears may start to prepare for action again.
I am slowly turning and looking for more signs of exhaustion and reversal. Be cautious, as we never know what market will really do!