Not a bad week.
The Nasdaq has gained 70 points in the lunar Green Period that just ended.
But as we mentioned last week, we are probably running into resistance at these levels, and with a new lunar Red Period now starting I expect the market to give back some of these gains.
October was one of the best months in decades, so it is unlikely that November will see a continuation of this melt-up.
Let’s take a look at the chart for Nasdaq (click for larger image);
I am looking for a downside bias in the next couple of weeks.
My Earl momentum indicator has also turned down already, indicating a consolidation phase is about to start.
The 2600 level, which has been a major support/resistance level all year long, could well come into play again.
A succesful test of that level would set us up for another move higher in the next Green Period.
So, that’s what I am keeping my eyes on for the moment.
Good luck, Danny
LunaticTrader 