Last time we said that a break of the 45'100 level would see the start of the next leg higher. This level will now become support and I would look to buy on dips towards that level. A break below 44'000 and we would need to reassess this current count. It is possible of a larger wave 4 correction but this will merely be a delay in the next up trend.
The correction lower we were looking for faltered at 2'786 before rallying up through the top of the channel putting the bullish view back into play. Given the divergence in the MACD it looks to me that we are currently tracing out a zigzag correction and I would look to buy now, at 3'323 and at 3'250 with stops below last weeks below at 2'786. The next leg higher should take us towards the 3'650 level initial target.
Written by Matthew Clark