LunaticTrader

Investing with the Moon

Outlook May 2

Posted by Danny on May 2, 2011

Another good week for our forecasts.
As we mentioned on Twitter last Monday: “prepare for a suprise to the upside”
Markets have broken out to the upside, and with the news of Bin Laden’s death we could see some additional gains this week.

Some more lunar Green Period days are coming up, so the Nasdaq can go above 2900 and maybe up to 3000.
That being said, unexpected good news that comes after a prolonged rise in the markets has a nasty habit of marking important tops. Good news may pull in some late buyers and cause some remaining bears to cover shorts, but then where are the next buyers going to come from?

The upcoming lunar Red Period will give us some clues as to whether the markets can hold on to those gains.
Here is the current Nasdaq chart (click for larger image):

Nasdaq

As long as we stay in this uptrend channel we better go with the flow. A first sign of weakness is likely to come in the form of a peak not reaching to the upside of the channel (currently ~3050), then a break down.

Stay tuned, Danny

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