We got another dip last week, and once again the Nasdaq bounced back from the 2600 support level.
The lunar Red Period is about to end, and so far the market has held up pretty well, despite a lot of bad economic news.
This means the path of least resistance could be quietly turning up.
I know that sounds strange given the ongoing crisis in Europe and elsewhere.
But it is important to remember that it is not rare for the market to make the move that is least expected.
And in the current case that would mean: continue to go up.
Let’s have a look at the current chart for Nasdaq (click for larger image):
The market has been in a sideways consolidating mode for nearly a month.
With a new lunar Green Period about to start, and my Earl momentum indicator coming into buy territory, we are ready to try the upside again.
Overhead resistance level is at 2750, and a break above that would open the path towards 2850.
Important support remains at the 2600 level, so that’s where you want to keep some stop-loss.
Good luck, Danny