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Nasdaq Composite and Dow

16 Feb 2017 ‚óŹ 04:14 AM

The Nasdaq Composite on an Arithmetic scale now fits the following Fibonacci fractal Wave 3 is close to 161.8% of wave 1, and wave 5=1 at 5870 is a whisker away. We cant rule out a slight overshoot. Also do we have to touche the upper end of the channel? Not certainly. So we have a perfect structure now. Daily RSI is at 80, and for the Nasdaq 100 at 82. Usually there will be a negative divergence before the final high is put in place.

nasdaq-160217

This coincides with an extreme in sentiment on one more indicator. Last week the II survey was at a multi year high. Now the DSI or Daily Sentiment index as shown below just surpassed previous highs to a 3 year high. It can still rise a bit but is now getting to an overbought situation where risks are high for a near term top soon. This chart from last nights Short Term Update from Elliott Wave International shows this trend.

dsi

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