A 20-year look in the rear view mirror at the European 600 Stoxx Index shows the current level being one of major resistance as it has failed each of the 3 other times it reached this price. The first two times it did so, this level signified “the top” was in, the index rolled over and fell ~60% from top to bottom. The 3rd and most recent time it reached this level, price hit resistance, rolled over and fell a bit more than 25% and then found support. Since that time, n it has rallied back to the underside of the resistance line looks like it wants to breakout.
It is said, the more times price tests a level, the more chance it will eventually break through. This combined with 1) the resiliency of this bull market and the fact 2) we have not formed negative RSI divergence like the prior two instances and 3) the most recent decline was more of a minor pullback rather than a major decline (as compared to the prior falls), the higher probability move points to this index eventually breaking out to all-time highs. Either way, it would be best to exhibit patience as I expect to see a period of consolidation and indecision in order to shake out all the sellers before the index actually shows us its hand and answers the question of where to next?