Markets stagnated last week, but still ended the lunar Red Period with handsome gains.
This indicates the path of least resistance is still up.
We are now entering a lunar Green Period again, favoring further gains, but how much can we expect after the recent rally?
Let’s have a look at the current chart for S&P 500 Index (click for larger image):
The S&P is coming close to last year’s highs @1370, so that may be reached in the next couple of weeks. But my Earl indicator is signalling weakness ahead, so I think we are going to make a short term top here.
We are then likely to fall back to the support trend line, currently around 1310, before making a new push higher.
So, I would use the Green Period to take some profits on ‘good news days’.