Suspected Index Top; 50-55% Chance that the top is in
The market has not touched the EMA for 2.5 years (36 bars) and therefore is continuing its buy climax (BX). Pullbacks on the monthly chart are aggressively bought, and therefore the first deep pullback will probably test the December high. This test (T) could be a higher high (HH) or to a lower high (LH).
Two measured move projections point to the December high. One is the external retracement projection of 1.618, the other is of a MM based on the first two legs up.
The beige line on top in the channel line (CL). A bull breakout of a bull channel line is a buy climax and usually corrects down to sideways in two legs and at least 10 bars.
November, December and January have formed an ioi (inside outside inside) breakout-mode pattern with a bear signal bar, increasing the chances of sellers below the Jan low.
Any selloff will likely not be aggressive because of the prior trend's strength. In fact, I suspect the first deeper pullback to be bought and to test the all time high.
Two measured move projections point to the December high. One is the external retracement projection of 1.618, the other is of a MM based on the first two legs up.
The beige line on top in the channel line (CL). A bull breakout of a bull channel line is a buy climax and usually corrects down to sideways in two legs and at least 10 bars.
November, December and January have formed an ioi (inside outside inside) breakout-mode pattern with a bear signal bar, increasing the chances of sellers below the Jan low.
Any selloff will likely not be aggressive because of the prior trend's strength. In fact, I suspect the first deeper pullback to be bought and to test the all time high.
Note
Bulls want this year-long trading range to be a bull flag, leading to some kind of measured move up. The bears want this to transistion into a major trend reversal and begin making lower highs and lower lows.A trading range is likely to continue.
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