Hesitating but not breaking

Markets remain stuck near major psychological levels, but so far we do not see much downside action.
With another week of lunar Red Period to go, I am still looking for a dip this week.
Let’s have a look at the Nasdaq chart again (click for larger image):


The Nasdaq briefly touched the 3000 level, before coming back down. How much fuel is left in the tank here?
The rise that started in December is very steep and clearly unsustainable in the longer term.
The market would have to keep rising 200 points per month to keep this momentum, is not going to happen.
Once a real correction starts, we are likely to fall back to one of the more sustainable trend lines.
A possible target becomes 2850, next 2750.
I am not selling my stocks, just keeping a few protective put options at this point.
As soon as we drop 100 or 200 points, new buyers may come in very quickly.

Stay tuned, Danny

By Dan

Author of LunaticTrader and Reversal Levels method. Stock market forecasts based on proprietary indicators, seasonal patterns and moon cycles.


  1. Danny
    There is a large ongoing solar storm and this indicates that there may be a significant market downturn next week even though it would be a green period. Do you agree?

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