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Weekly
With a new high this week at 15,709.58 we got the word, that the rally from March 2009 was still intact, but for how long?
Last week we saw a Shooting Star candle, which could indicate that a top could be in place, however one candle is never enough to confirm a top or a bottom, so to confirm that a possible top could be in place we need a confirming candle down-candle the next week. That said only a break below support at 14,762.35 will confirm, that wave D of the major expanding triangle is in place and wave E lower is about to take over for a major decline towards 5,500 long term.
As long as Important support at 14,762.35 stays intact we could still see a move higher towards the long term resistance near 16,000.
An important top could be in place with last weeks top at 77.45. The impressive rally from 7.06 in November 2008 saw a wave 1 from 7.06 to 28.50, followed by a very shallow wave 2, which only corrected 23.6% of wave 1.
From the wave 2 low at 22.50 we saw an extended rally in wave 3 to 62.00, which was between 1.618 and 2 times the length of wave 1.
Wave 4 corrected almost perfectly 50 % of wave 3 at 43.04 (the perfect 50% correction would have been at 42.50.
Finally we have just seen wave 5, which has exceeded the 61.8% target of the distance from the beginning of wave 1 to the top of wave 3 at 76.99.
However to confirm, that wave 5 is in place we need a break below 70.11, which would call for a decline down to 43.04 as the first long term target.
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