Since the beginning of 2018, the US index gained almost 2.9% however last week dived more than 4.0% but the US index continues in a bullish phase since mid-May 2017.
Last week the index dived with a wide range and closed near the low of the week, in addition managed close below the previous week low, which suggests a strong bearish momentum.
The stochastic is showing a overbought market and is displaying a strong bearish momentum.
Finally, after no corrections and very few consolidations throughout the entire year of 2017, the downward correction is here and it began with a strong note. Now the question relies on how deep it will be or if even will scare the investors’ away and inverse the prevailing trend.
Expecting a downward move to a Fibonacci retracement at 24,533 on a break below other Fibonacci retracement at 25,353 (scenario 1) although a bounce from a Fibonacci retracement at 24,533 may spark the bulls for a run up to the Fibonacci retracement at 25,353 (scenario 2).