LunaticTrader

Investing with the Moon

Outlook May 9

Posted by Danny on May 9, 2011

A rather disappointing week in the US stock markets.
We gave back nearly all the gains of the previous week, so we now have potentially a failed breakout on the charts.
This also means we got a rather weak lunar Green Period, with only a 25 point gain on the Nasdaq.

Now heading into lunar Red Period again, let’s have a look at the situation in the S&P 500 index (click for larger image):

S&P500

The market still remains in the steep uptrend channel that started last summer, but we are rather close to the lower boundary while going into a Red Period. There is also a bearish divergence in my momentum indicator.
So we have increased risk of abandoning the 10 month old uptrend channel, and that would cause a drop back down to the recent March lows, if not lower.
Be prepared.
If we get through this Red Period without serious downside action, then we will be well set to move to new highs in early June. But that will be discussed in our next weekly Outlook.

Good luck, Danny

Post a comment (disagreement also welcome):

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: