We got another upswing, and the S&P 500 index has reached the 1400 level. Now what next?
Longer term I think the market will go higher, but for the near term I am becoming less optimistic now.
Let’s have a look at a somewhat longer term chart for the Nasdaq index (click for larger image):
The Nasdaq has been in a gradually rising trend channel for several years. It has also been in a steeper trend channel since last summer. By reaching 3050, the Nasdaq has now reached the ceiling of both channels. Despite last week’s rally, my Earl momentum indicator continues to weaken compared to recent peaks, signalling weakness ahead.
We remain in lunar Green Period this week, so this is the perfect time window to mark some top in the market.
I think we are ready to get in a sideways pattern that could easily last for a few months.
The likely range is between 2900 and 3100.
Good luck, Danny