Investing with the Moon

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Posted by Dan on August 6, 2012

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

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