Some interesting moves last week.
As we have been telling for weeks, the market is ready for some sideways action after the recent rally.
Let’s have a look at the current chart for S&P 500 (click for larger image):
The steepest trend channel is being abandoned, which means the downside is opening up and we should start looking for likely support levels.
We have a few more lunar Red Period days to go, so we could get some temporary bottom soon. My first target remains at 1340, and if that level is given up then we can start looking for 1300 by early June.
My Earl momentum indicator is nowhere near bottom territory, so this is a time to be patient.
A few readers have been asking about the recent performance of our lunar Red and Green periods.
We have gone through 8 periods so far this year, in the 4 Green Periods the Nasdaq has risen 190 points, in the 4 Red Periods the Nasdaq has gained 148 points. So we can see that the lunar Green Periods continue to perform better than Red Periods, as they have been doing for years. See: Performance