The bearish movement this week has caused me to adjust my medium-term perspective slightly. As I mentioned last week, I was hoping to see a swift reversal between 4170-4190 to confirm that the drop below 4200 was a false breakdown. We did experience a 70-point rally from 4180 on Monday (which coincided with my cycle low date +1 and my level). However, this move was relatively weak and stalled at 4250, leading to a relentless sell-off down to 4100. The weekly close was weak, signaling a warning for a bullish medium-term outlook. I plan to update my medium-term view (6 months to 1 year) in a few weeks as I need more confirmation. While my perspective might change slightly, I believe we are very close in terms of time and price before a substantial year-end rally. The distinction lies in that it won't be a rally from 4200/4300 to 4800, but rather from 3950/4000 to 4400-4500.
Regarding the short term, we have two months remaining in 2023, and my inclination is that we should soon witness a bounce for a year-end rally. Nevertheless, given three consecutive bearish months (August, September, and October), I anticipate a lower low in November before any significant rebound. My primary support zone at the moment is 3950-4000, with a timeframe around mid-November. Time is more critical than price to me, so I will patiently await for the structure developments.
Looking ahead to next week, I anticipate a bounce in the final two days of October, though I don’t expect a strong rally at this point. We might see only a 50-70 point move from the 4080-4100 range. The current resistance is at 4150-4180. Additionally, I expect a dip on Wednesday, November 1, followed by a more extended relief bounce lasting 5-7 days, possibly reaching a resistance level of 4250-4300 before making a lower low towards 3950-4000 in November.
For now, my focus will be on short-term market movements, as the market can exhibit rapid shifts in either direction.