LunaticTrader

Investing with the Moon

Outlook for week of July 24

Posted by Danny on July 23, 2017

Outlook for world markets with brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. Comes as a daily html file covering over 2700 stocks and ETF. To see what you get you can pick up recent free samples on this page. Instructions for use are included. Give it a try.

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Show Time

Posted by Danny on July 17, 2017

The S&P 500 has broken out to new record highs, nicely in line with what we shared last week. But the Nasdaq index has not made it to new highs yet. Here is the current chart:

^COMP (Daily) 10_13_2015 - 7_14_2017

The Earl and MoM indicators are clearly going up, with no signs of topping out yet. But the slower Earl2 (orange line) is merely flatlining below the zero line, which is exactly what I warned for in last week’s post. We need to watch carefully what happens in the next week or two. If the markets just chop around with S&P 500 stalling below 2500 and Nasdaq staying near the 6400 level, then it would indicate a very weak market with little or no fuel left. Then the Earl2 would probably continue to negate the new highs and that would be an ugly setup heading into August-September. See late September 2016 for a recent example of such an Earl2 non-confirmation. Stocks climbed to marginal new highs after a pullback, but the Earl2 stayed very weak below the zero line. A more significant second dip followed suit.

A more vigorous advance with S&P climbing above 2500 would reduce this concern. So it is show time.

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Outlook for week of July 17

Posted by Danny on July 16, 2017

Outlook for world markets with brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. Comes as a daily html file covering over 2700 stocks and ETF. To see what you get you can pick up recent free samples on this page. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Ready for 2500

Posted by Danny on July 11, 2017

In my last post I recommended caution and wanted to see how the market gets through the lunar red period. Muddling through without further damage to the longer term uptrend would set us up for another rally in July-August.
That seems to be what we have got and if the market holds up a few more days then another rally will become the base scenario. Here is the current S&P 500 chart:

^SP500 (Daily) 10_5_2015 - 7_10_2017

The 2400 support level has held up well so far. It was tested twice but didn’t break. My Earl indicator (blue line) has bottomed out, which sets the stage for another rally. But the slower Earl2 (orange line) is still headed lower just below the zero line. The MoM indicator is also turning up from the yellow neutral zone.
After an extended bull move it is not unusual for the Earl2 to negate the final rally of the move and just stay flat near the zero line. That could be exactly what we are seeing here. Another rally would probably take this index up to just below 2500 (blue circle) in August and the Earl2 might completely negate that move. If that comes to pass we will have a bearish setup that could be very dangerous for the remainder of the year.
But first things first. The setup favors another rally and we will be starting a new lunar green period. The LT wave will also improve after the middle of the week. If we get the rally I would look for 2500 in August and possibly a major peak. If the rally fails quickly and the S&P drops below 2400 then we will know a bigger decline has already started.

I also want to show you a pattern that is showing up in the S&P since the early 2016 correction lows. The first rally off those lows peaked in August (negating the two day Brexit drops as an aberration) and was followed by a 3 month sideways.
Then the markets rallied 4 months, followed by 6 weeks of sideways action. And then the market rallied another 2 months, now followed by 3 weeks of sideways action (so far).
So, the rallies have been getting shorter and weaker and the sideways patterns that follow them have become shorter as well. The moves seem to halve in length with each iteration. If this self-similar pattern continues for another round then we should now start a 1 month rally with a peak somewhere in mid August. Here is a more close-up chart:

spx

A move well above 2500 or a drop below 2400 would tell us something else is going on. So I wouldn’t bet the bank on this, just keeping my eyes open.

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Outlook for week of July 10

Posted by Danny on July 9, 2017

Outlook for world markets with brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. Comes as a daily html file covering over 2700 stocks and ETF. To see what you get you can pick up recent free samples on this page. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

LT wave for July

Posted by Danny on July 3, 2017

Investors’ resilience got tested again last week as stocks had some significant down days. The up trends in major indexes are not broken, but there is certainly reason to be cautious as I have been warning in my daily reversal levels posts and on Twitter. Here is the current Nasdaq chart:

^COMP (Daily) 10_29_2015 - 6_30_2017

All indicators are pointing down now and the Nasdaq may go for a test of the 6000 level before we see any signs of a tradeable bottom. We are in a new lunar red period and how the market gets through this period will probably be quite important. If stocks can muddle through without causing damage to the longer term up trend then another rally in late July/August would become the base scenario. A move back above 6300 would tell us that rally is on.
A sustained drop below 6000 would suggest we are in a more serious decline and then 5400 would become an initial target.

Our LT wave for June did a mediocre job. Here is the expected pattern for July:

ltwaveJul2017

Strength in the first days of June was followed by a sideways in the expected weak period, but projected strength in the final week of the month did not materialize in a convincing way.
The wave for July projects ongoing weakness until the 20th followed by a stronger week. Lowest wave values come on the 8th and the 14th with highest values expected around the 26th.

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Outlook for week of July 3

Posted by Danny on July 2, 2017

Outlook for world markets with brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. Comes as a daily html file covering over 2700 stocks and ETF. To see what you get you can pick up recent free samples on this page. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Outlook for week of June 26

Posted by Danny on June 25, 2017

Outlook for world markets with brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. Comes as a daily html file covering over 2700 stocks and ETF. To see what you get you can pick up recent free samples on this page. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Outlook for week of June 19

Posted by Danny on June 18, 2017

Outlook for world markets with brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. Comes as a daily html file covering over 2700 stocks and ETF. To see what you get you can pick up recent free samples on this page. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Get ready for the August eclipse

Posted by Danny on June 14, 2017

Despite some air pockets the US stock indexes keep looking up. The recent lunar red period produced a 35 point loss for the Nasdaq and we have started a new green period. There will be total solar eclipse over the USA in August and it will probably get plenty media attention. So, we will have a good look later on in this article but first I want to share the current S&P chart:

^SP500 (Daily) 8_31_2015 - 6_13_2017

This market stays in a nice channel since the early 2016 corrections. S&P 500 is currently in the middle of the range and trying to decide whether it wants to visit the upper or lower boundary next.
The Earl indicator (blue line) has turned down, but this has only produced a sideways pause so far. The slower Earl2 (orange line) is climbing again after some hesitation. This suggests a continuing rally until we see Earl2 top out again.

Bullish participation had been weak in recent months but is now improving:

spx

369 S&P stocks in bullish mode is the highest since early March. In healthy market advances the number of bullish stocks typically climbs above 400 (80%), like it did in February and December. If the number of bullish stocks falls back below 300 (60%) then the rally will be on hold. But as long as that doesn’t happen we better assume higher highs coming up. I keep monitoring this stat and you can find it in my weekly outlook posts on reversallevels.com every Sunday.

So what’s up with that eclipse? Well, on August 21st there will be a total solar eclipse crossing the US from coast to coast:

path-760
(source: https://www.timeanddate.com/eclipse/solar/2017-august-21)

Before you stash away extra sugar, water and canned tuna and sell all your stocks, remember that this has happened before and you would not be able to pinpoint those events on a long term chart of the markets unless you knew the dates. The most recent occasions were 26 February 1979 and 8 June 1918. Nothing unusual happened.

Historically, stocks markets actually perform slightly better than average in the weeks around a solar eclipse. See my old article: Eclipses and the stock market. So, if come August the market is still setting new records then some commentators may start pointing to this eclipse as the reason for a crash. Sure, there may be a market decline in September or October, but that doesn’t mean it would have anything to do with this eclipse.
I would rather watch this chart from 1987, exactly 30 years ago. Markets climbed in the first months of the year, then paused March to May and climbed to new highs in June to peak out in late August. The price action so far this year happens to be identical:

spx1987

If we reach a major peak in August then I would expect it to come with significant bearish divergences and new investors’ enthusiasm pushing out doomsayers.

Posted in Financial Astrology, Market Commentary | Tagged: , , | Leave a Comment »

 
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