Price is on a short term downtrend within the longer term uptrend. The longer term trend is still assumed to be up given that there is yet clear signs that the trend has changed (chart 2 &3). However, question remains if the current move is a start of a primary or just a secondary.
A prudent view in the eyes of Rhea (point 1 & 2) on current short term downtrend is likely be a secondary:
1) Price yet to make a lower low, hence still on uptrend,
2) Both mid and small caps index too has yet to make a lower low;
3) Cycle study suggest trend is still up and possibly making a bottom soon; and
4) Hammer last Wednesday.
On the other hand, given confusing nature of most correction, there may be shout of a start of primary:
1) The two week downtrend retraced more than 61.8% rally of Dec – Jan rally,
2) Failed breakout of 1530 high; and
3) RSI yet to reach oversold level.
Therefore, should scenario 1 occur, the 1500 should hold, price trades higher this week and eventually trading above 1580; starting a new cycle and nullifying the 2-week long black candles. Otherwise, look for break of 1500 level, possibly 1470 and a weak eventual rebound, below 61.8% retracement level.
The bears may also reason with weak Jakarta, Mexico, India and resistance failure of US on Friday while others may rebutt with still unfalling JPY, AUD and regional currencies.
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