Markets have continued upwards, and some major stock indices are coming close to psychological barriers (13000 for the Dow Jones, and 3000 for the Nasdaq Composite).
With another week of lunar Green period coming up I am looking for a short term top, and thus an opportunity to take some profits. The market has had a very nice run since mid-December, but markets never continue to go up in a straight line for very long.
Let’s have a look at the current chart for the Nasdaq index (click for larger image):
Like most world markets, the Nasdaq has been in a steep up trend since mid-December. It could go on to touch 3000 this week, but I wouldn’t bet on it. My Earl momentum indicator is showing a massive bearish divergence, so a correction can start any moment.
I can only repeat last week’s advice: take some profits on “good news days”.
Some random thoughts to finish this week:
The media will try to sell the new bailout of Greece as good news, but is it?
1) This Euro 130 billion bailout amounts to Euro 12000 (~ $16000) for every person in the country. What is it going to be used for? Is it going to be “spent”? Or is it going to be put into some productive investments? If so, which ones?
2) How is it going to be payed back? By whom?
3) And what if Portugal or Spain demand similar “help”?
Be well,
Danny
LunaticTrader 