LunaticTrader

Investing with the Moon

Outlook February 14

Posted by Danny on February 14, 2011

The stock market keeps going up as if there is only one way to go.
Bad news can only take it down for one day, or sometimes even only half a day.
The Nasdaq has become as dependable as a Swiss clock.
But, this too will pass.
The last time markets went up in similar uninterrupted fashion was February-April 2010, and we know what happened next.

Another week of lunar Red Period is now coming up, let’s see what happens.
Here is a chart of the Nasdaq Composite. Two parallel trendline channels have defined a lot of turning points in this market since 2008. (click for larger image):

Nasdaq Ferbuary 2011

We are currently bumping into the ceiling of two overhead trendlines. A clear break above these levels would probably lead to an upward acceleration.
Possible? Yes.
Probable? Hmmm?…

More likely we will fall back and then build a base from which a new advance can start.
So I am not a buyer at this point.
Don’t try to board a runaway train, also don’t try to stand in front of it.

Good luck.
Danny

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