Equity indices are making a corrective bounce. We have not seen the lows of this downward move we are currently in that started after the result of the UK referendum. So I remain bearish expecting at least one more new lower low.
In a bearish trend since 16000 price level when it broke below the triangle. Second chance to short it was given at the bounce and back test of the broken triangle and then we had the BREXIT result of the referendum that pushed price below 15k. Price is now bouncing before its next leg down.
Shallow corrective bounce that has still not reached even the 38% Fibonacci retracement. The weekly chart remains bearish as long as we trade below the red downward sloping trend line.
Is closer to its pre-referendum levels than any other major index. Has the decrease in price of the pound helped? However technically the Inverted Head and Shoulders still holds but also price is below important cloud and trend line resistance levels.
One more new low is expected in US indices as I believe the downward move is incomplete.
A pull back is justified to push indices even lower as we are now correcting the upward move from February lows. Once this correction is over we can resume the bullish trend to new ATH.
Thank you for taking the time to catch up on my thinking….