We had an interesting price action for the passing week. The Weekly bar closed as an OKR (did make a LL and a HH), closing with a gap up on last Friday, and a Weekly High that took out the last Major High before the whole Monthly correction has started, but closed considerably weak, below the Open. It is important to look at the reversal process: Last Wednesday the market took out the Weekly Low, but on Thursday this indication was rejected immediately by a Harami bullish bar closing above the 8 EMA, hence the big jump created on last Friday’s morning.
A price action that doesn’t close the open gap 8778-8804.75, but reverses up is a clear sign of strength, and taking out the Weekly High is a signal to take out the Monthly swing High, reaching 9080 – approaching the all time High at 9119. As mentioned couple of times before, taking out the Monthly swing High is a long term, bullish signal towards 10043 (but the Stop is wide as well: below the Monthly swing Low!).
On the other hand, closing the open gap is most likely a sign that the market needs more consolidation. If the AB=CD pattern on the Daily mentioned on the last reviews is important and the market is relating to it, we should see eventually a major decline back to 8280 at least, but that, if true, most likely should take more time. Taking out the Weekly Low in this case might yield a false break down, creating a sort of a Megaphone pattern, and a probable testing of the mid range at least once more.