Previous analysis is updated – the price as traded as outlined and rising to levels where a secondary is likely to form. However, there is a change to the longer term outlook in that I now favor a more substantial correction to take place before the overall bull market resumes.
Daily Chart
Pattern
This move into a high is setting up both a 5 point broadening low and top formation. The broadening low formation is really just a continuation pattern with the expected secondary high a point 4 high. This pattern is not seen on the continuous contract as the point 1 low was actually below the point 3 low. But we’re working with the cash chart and the point 3 low set in April was marginally below the point 1 low.
Looking closer, we can see this last phase of the move into the secondary high is setting up a 5 point broadening top with just the point 5 high remaining. Interestingly, those who follow the intraday chart will notice a 5 point broadening top is already in place, however, I believe this will morph into an even more bearish 7 point broadening top. Also, one more high will set up a “three strikes and you’re out” top formation. So, assuming price still has one final high to go, this expected secondary top is likely to be a point 4, 5 and 7 high as well as a third strike high all at the same time.
Bollinger Bands
Price has left the upper band and I am looking for one final fling to the upside that tops out around resistance from this upper band.
As to Fibonacci – this past week I was thinking price might pull up just shy of the 88.6% retracement level at 26243. Given how things are looking currently I favor price to marginally clip this level. Let’s see. The 38.2% angle looks to be providing solid resistance and perhaps one last crack at this angle will see in the high and send price back down.
Horizontal line – This denotes the level where price rallied back to after gapping down from the high. This level stands at 26338 and I doubt price will overcome this level. So this potentially gives us a very tight range between 26243 and 26338 to nail the high. How about 26280??
