Where expected that the index would hold the shoulderline as support, we saw today a break of the shoulderlevel and a retest of the head.
This means that we have to be very cautious at this moment. The inverse head and shoulder could very easily flip to a head and shoulder pattern, initiating bearish continuation. For now the bullish pattern is still valid, but when the index hits the 0.618 again and gets rejected there, time to be cautious.
If we take the Fibonacci retracement of the inverse head and shoulder, we can see that we have two take profit points. The first is situated on the fib level -0.27/3.99T. The second one is situated on the fib level -0.68/4.13T, just below the daily shoulder level of the head and shoulder pattern.
Continue to act with caution : we are still in a bearish trend. If somewhere down the line there is a lack of confidence in the market, price may reverse quickly. Remark : the index did not correct the one impulsive bearish candle yet, not even after 14 days. Bulls try, but are not convincing yet.
