After 16 consecutive weeks of closing higher than the close four weeks ago the streak has ended. What does this mean? Nothing in itself, but its a symptom of weakness from events that have been covered here previously: Failure at the TD Trend Factor target of 1079, bearish RSI/price divergence, and a qualified break of the TD Demand Line last week. That break was confirmed this week and has an open projection with it of 987.51, which is below the critical monthly chart value of 1019.95. 987.51 also coincides with a 50% retracement of the move from the TDST support line.Work on the monthly chart indicates that if 1019.95 is broken the bears will have the upper hand with an initial downside objective between 910 and 940. This zone complements the conclusion from two weeks ago when I wrote “At this point … there are no TD signals on the weekly chart. This would infer that any decline would hold above previous TDST support at 875.“
Besides 987.51, another downside target would be the medium moving average (solid blue line) which should be at about 970 next week. Below that come targets derived from the monthly charts. We should keep an eye on the market action to see how price reacts if and when it reaches the laid out targets.
Finally, there is a positive reversal in the RSI here which projects up to 1098.66. This is important because of the rule that positive reversals only verify in bull markets. A failure of the current bounce to make the target is bearish. It would be a failed retest of the high.
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