The formation above is that of a falling broadening wedge- this is a bullish formation. The current measured range is 66 points. We sit above the moving averages and momentum suggests at this time that pullbacks should be bought and upside should grind forward.
The goal of buyers will be to break the range of the wedge above. As of now, the sellers are exerting pressure but pullbacks are likely to be bought. If the chart fails 1910, we will fall back into the range of the wedge and a likely test of the 1902.25, 1897.50 region before attempting the bounce pattern again. If we fail there at 1897, we are likely to complete the edges on the wedge-1889.25, 1183.5, 1879.75, 1874.25. Failure there and we are likely to breach the lows of 1861.
If the chart holds 1922 ( breach and retest), we will stair step a move upward in a trace of the measured move formation trajectory- testing 1927.75, 1932.25, 1937.5, 1949.5, 1956.25, 1971.5 and 1988.25 would complete the measured move upward.
I suspect bullish action here but we sit in very bearish sentiment, so the trip upside will be grinding and deeper retracement likely. This is not a space to buy the breach of any levels – to do so will probably mean that your initial position will be underwater as you wait for the chart to settle into a move.
