In the first chart here (daily bars), we see that the short term up trend I showed last week has now essentially ended.  (The position of the dashed vertical purple line actually should be a bit further to the left, but the charting software won’t let me move it less than one average bar width.)  At the end of a TopFinder we expect a consolidation, and indeed here the consolidation has already begun, confirmed by those two doji candles.

In fact, we may even already be in the beginning of a new short term down trend.  The lower whisker of Thursday’s candle broke rather significantly below S4, and on Friday the new R1 successfully resisted the top of that day’s candle.  So, we’re breaking support while holding resistance, which is the classic Midas definition of a down trend.  How far down will this retracement go?  The likely places for a turnaround are S3, S2 and S1, and also the level of S2 from the weekly bars chart, the second chart here, which right now is at 1226 and rising rapidly.

On the second chart here we see that the intermediate term up trend is still in force, now about 71% complete.  How far up will it go?  To estimate a target for it, look at the third chart here, the long term monthly bars chart.  We see that during 2009 and 2010, price very nicely acknowledged the Fibonacci retracement levels.  So, I have added the uppermost 76.4% level, which is the complement of the 23.6% level.  This level is 1362, and I have copied that onto the second chart, the weekly bars chart.  This 1362 level could be a target for price once it gets to the horizontal location projected by the TopFinder, however, price would have to keep rising at a very steep rate to get to that target.

In summary, we’re expecting a down trend in price on the short term chart.  On the intermediate term chart, this will appear as a pullback, from which we will be able to launch S3 in the hierarchy of S curves that is tracking this up trend.  We’re expecting this uptrend to end at the vertical dashed purple line, which looks like it’ll take something like 6 to 8 weeks to get there.  The Fibonacci level of 1362 is an upper limit price target for this up trend.

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