Equity Indices Monthly (Aug ’16)
The anticipated extension higher has cleared the 35.34 high of April, with prices now within reach of the 37.85, (61.8%) retracement of the 2015-2016 fall as the January rally gains traction. Any immediate break is expected to find difficulty reaching the 39.00, (50%) retracement of the broader 2011-2016 fall, however, as stochastics are already overbought, but any subsequent pullback should prove limited, as the Tension Indicator continues to improve and background studies strengthen. An unexpected break below 35.34 should stabilise above congestion around 34.00 as investors adopt a buy-into-weakness strategy. Later clearance of 39.00 will open up congestion around 40.00, with still further strength to follow.
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