Stocks have held up well in the recent lunar Red Period.
Can the market build on this strength?

Here is the current chart for the S&P 500 (click for larger image):


Stocks ended the week very strong and we see a pattern of higher highs and higher lows, which indicates a rising market.
We are starting a new lunar Green Period again, so normally we should see further gains. Look for the S&P to break above 1400, and resistance will appear around 1420, the highs of last March. Keeping stop-loss level around 1330.

As our chart of the week, we have a long term weekly chart for silver (click for larger image):


As you can see silver is sitting right on a long term trendline, offering support to prices. Silver is down 50% from its peak in early 2011 and is reaching the point where it will either break down below $25, or resume upwards. My momentum indicators suggest an impending move to the upside. You can buy silver (or SLV) at current levels, with a stop-loss just below $25. Or you could wait to buy silver until it breaks out above $29. You would be risking 10% with the potential to gain 50% or more. Not a bad risk/reward ratio.

Good luck, Danny

By Dan

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

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