LunaticTrader

Investing with the Moon

Outlook for week of September 25

Posted by Danny on September 24, 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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Narrow range

Posted by Danny on September 18, 2017

The S&P 500 has climbed just above 2500, technically breaking out above its early August highs. But this doesn’t make the market any easier to read because we remain stuck in a narrowing range. Here is the updated chart:

^SP500 (Daily) 12_8_2015 - 9_15_2017

The narrowing range, as shown by the blue lines in this chart, will inevitably be abandoned sooner or later and that will probably set the direction of trading going into 2018. We remain in a lunar green period and the LT wave for September stays positive until the end of this week. So we could see 2520 in the coming days. But the Earl is peaking out, so it looks like the stage is being set for another pullback.
I wouldn’t be too aggressive with bets either way at this point. I would just wait for the breakout from narrow range and then go along with the new trending move (up or down).

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Outlook for week of September 18

Posted by Danny on September 17, 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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The Euro and the Nasdaq

Posted by Danny on September 11, 2017

Stock markets are stagnating just below their recent record highs. The Nasdaq gained 89 points in the recent lunar red period, which is the best performance in a red period since early February. Is this the start of another major rally? Or just a fake-out before a significant decline? It is hard to tell right now. Here is the current Nasdaq chart:

^COMP (Daily) 11_24_2015 - 9_8_2017

Since our previous review of Nasdaq the bearish scenario has been avoided and the long term up trend line (blue) has held. The odds of a continuing bull market have gone up, but we still don’t see a sustained breakout above 6400. So, it’s too early to bury the bearish scenario.

We are starting a new lunar green period and our LT wave for September is positive for the coming weeks. But my Earl indicator has turned down with the MoM also stagnating at high level. So, I don’t know what will happen next. Something has got to give… Another rally to new highs is certainly feasible. But a downturn with sudden acceleration on break below 6200 is equally likely. We may even see the “path of max confusion” with major indexes eking out new highs for a day or two before turning down rather sharply. I would just wait for the inevitable breakout (up or down) and keep my powder dry until the uncertainty starts clearing.

As chart of the week I have chosen a monthly EURUSD chart:

euro

The Euro has been in a long term down trend (blue channel) since 2008. We see a strong rebound since the beginning of 2017, but now the Euro is bumping into the 1.20 zone, which has been a major support-resistance level for almost 20 years. I would not expect the Euro to break above this major resistance level on its first attempt. A peak as high as 1.22 or 1.23 is possible, but I would look for a significant pullback before the Euro can possibly break higher in 2018 or later. A multi-month pause may be up next, but I think a pullback to 1.12 is the base scenario for now. What could cause the Euro to weaken versus the $US? I think the upcoming “quantitative squeezing” is a prime candidate. If the Fed starts reducing their balance sheet, as they already announced, then it will make US$ more scarce. Simple supply and demand would then push the $ higher, especially if other central banks are waiting with this QS step. I plan to do an article on this “quantitative squeezing” and what consequences it will have for stocks and bonds. The EURUSD chart is something we will have to keep an eye on.

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Outlook for week of September 11

Posted by Danny on September 10, 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 September 4

Posted by Danny on September 3, 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: , , | 2 Comments »

LT wave for September

Posted by Danny on September 1, 2017

Markets have been jumping higher in recent days and are close to new highs again. This is rather unexpected given the current lunar red period and goes against the projected weakness per our LT wave. What to make of this? Here is the current S&P 500 chart:

^SP500 (Daily) 11_3_2015 - 8_31_2017

The crucial support at 2400 has held easily and my indicators are pointing up. This paves the way for a possible test of the 2500 level in the coming weeks. But this could also be a fake-out move before a bigger downturn. If a lower high gets printed here then it will not look good and the 2400 level may get tested again.

Our LT wave was partially successful in August. Here is the projected pattern for September:

ltwaveSep2017

Expected weakness in the first half of August came right on target and the low on August 10 gave us a significant down day. But weakness continued longer than expected. The projected high on August 23rd was only a weak rebound and strength also stretched longer than expected with the best days coming at the very end of the month. So it looks as if the cycle is getting delayed by a few days. I don’t know if that will continue to be the case.
For September some mild weakness is expected until around the 9th, followed by a stronger period with an LT wave peak value on the 21st. The final week of September shows renewed weakness with a bottom value on the 28th.

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Staying alert

Posted by Danny on August 29, 2017

Markets had a rebound last week, but it lacked vigor. The lunar green period ended with a 54 point gain for Nasdaq. Not bad, but it only recovered a small portion of the 206 point loss in the preceding red period. Here is the current Nasdaq chart:

^COMP (Daily) 11_25_2015 - 8_28_2017

The Earl index (blue line) has bottomed and climbed back to neutral, but the market is not really coming along very well. The slower Earl2 (orange line) keeps going down.
Expected strength around the 23rd per LT wave for August only gave us a weak rebound rather than a new record. This suggests the path of least resistance has turned down. A drop below 6200 would confirm that scenario. If so I would look for 5500-5600 as an initial target in that “correction”.

Since the trend is still in place a continuing rally is possible too. I would give that a 30% chance right now. In that case a breakout above 6400 would probably start a rally towards 6600 and thus new records.
If the uptrend (blue line) is still in place by the end of the current lunar red period then the odds for a rally to new highs would go up considerably. We will find out soon.

I will be back later this week with the LT wave chart for September. Stay tuned.

Posted in Market Commentary | Tagged: | 4 Comments »

Outlook for week of August 28

Posted by Danny on August 27, 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 »

Did the market peak?

Posted by Danny on August 21, 2017

Stock markets remain under some pressure, but overall the pullback is still small. It is amazing how quickly investors’ talk has changed to crash predictions, which makes me think there is more upside to come before we see a more serious decline. Here is the current S&P 500 chart:

^SP500 (Daily) 11_5_2015 - 8_18_2017

The S&P 500 is currently testing major support near 2420. A drop below 2400 would definitely not look good, but as long as that doesn’t happen we better the possibility of another rally here. All my indicators are in the bottom zone but not turning up yet. If the S&P can hold above 2400 for a few more days then the Earl is likely to turn up first, with MoM following suit. But that remains to be seen, of course. We are in a lunar green period and our LT wave goes strongly positive this week. That “should” give us at least some rebound rally and if that rally is very weak then it would be a very bearish sign.

The solar eclipse over the US will gather some attention today, even on Wall Street. I wrote about this eclipse a few months ago, so you may want to check out that article. See also my older article: Eclipses and the Stock Market. Basically, the historic tendency has been for stocks to drop in the lunar red period that comes two weeks before a solar eclipse. The Nasdaq dropped 206 points in the lunar red period that ended on August 11, again confirming that idea. And then the market tends to climb in the green period containing the eclipse itself. We will find out this week if that happens again.

That wouldn’t rule out a further correction or even bear market in September or October, but I wouldn’t worry too much as long as the 2400 level holds in the S&P 500.

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